How the Pandemic Reshaped Construction Law in APAC

The Asia-Pacific construction sector faces legal complexities and project delays due to the pandemic, which necessitates a risk-aware approach and adaptation to the "new normal."

FREMONT, CA: The onset of the pandemic reverberated across global industries, impacting the construction sector within the Asia-Pacific (APAC) region as well. Beyond the initial health-related challenges, the pandemic instigated a series of legal complexities that persist today.

Several significant issues have emerged, warranting careful consideration in the region:

One primary concern pertains to contract performance Issues, where the meticulous planning of projects was disrupted by unforeseen circumstances such as lockdowns, border restrictions, and labor shortages. The resultant logistical challenges in acquiring essential materials exacerbated delays and cost overruns, leading to disputes regarding contractual obligations.

Another pivotal aspect is interpreting and applying force majeure clauses intended to absolve parties from obligations due to unforeseeable events. The onset of the pandemic prompted legal deliberations across various APAC jurisdictions on whether it constituted force majeure and to what extent it relieved contractual obligations. Recent cases underscore the necessity for precise and comprehensive drafting to mitigate ambiguity.

Moreover, government responses played a crucial role, as APAC governments recognized the significance of the construction sector and implemented diverse measures to bolster it. These measures ranged from deadline extensions and financial assistance packages to simplified permit acquisition procedures. However, the effectiveness of these interventions varied, with certain companies needing help accessing requisite support. Hence, navigating the evolving landscape of construction law in APAC necessitates adept legal analysis and proactive adaptation to emerging regulatory frameworks.