As instability in the Middle East raises the risk of supply chain disruptions and contract disputes for overseas energy and infrastructure projects, Barun Law LLC held a seminar titled "Middle East geopolitical risks and defense strategies for project contracts" on the 15th at the Barun Building in Gangnam District, Seoul.
The seminar was jointly organized by Barun, the Overseas Construction Expert Forum, the International Contractors Association of Korea, the Korean Society of Civil Engineers, and the Korean Institute of Construction Engineering and Management. Representatives from domestic power generation public corporations and EPC construction companies, overseas energy investors, financial institutions, insurers, and associations attended to discuss war, sanctions, and supply chain risks that may arise during Middle East project execution, along with contractual response measures.
The Middle East is a market where domestic corporations participate in power and infrastructure projects in various ways, including equity investment, EPC works, and equipment supply. Recently, wars and maritime blockades, drone and missile attacks, and cyberattacks targeting energy infrastructure have pushed project delays, expense increases, and financing instability to the forefront as practical issues.
Foreign attorney Lee Seung-gyo delivered the first presentation, explaining key issues in core contracts for overseas power and infrastructure projects, including PPP concession agreements, power purchase agreements (PPA), and long-term purchase contracts (offtake agreements). Lee reviewed, clause by clause, how geopolitical risks affect project profitability, feasibility, and financing stability.
Special committee member Je Jey-yong presented on supply chain risks under EPC contracts. Je focused on new types of risks that existing international standard contracts did not fully anticipate and explained force majeure provisions, schedule extensions, expense recovery, liability limitations, and response measures for supply chain disruptions.
A central question at the seminar was whether force majeure clauses in existing international standard contracts can adequately cover modern geopolitical risks. Presenters said that for new projects, the risk allocation structure must be clarified from the initial contract design stage, and for ongoing projects, the applicability and limits of existing contract clauses should be reviewed in advance.
During the Q&A, participants discussed the allocation of responsibility between the client and the contractor when supply chain disruptions occur, the possibility of insurance coverage for war risks, and the criteria used by financial institutions to assess risk.
A Barun representative said, "Geopolitical uncertainty in the Middle East has become a key risk that directly affects contract structures, financing, and overall supply chain management in overseas power and infrastructure projects," adding, "We will support domestic corporations in stably executing overseas projects by assisting with contract reviews, risk allocation, and dispute prevention strategies."