Buried Truths: Uncovering Groundwater Liability in Site Sales

Brief

After acquiring a water treatment facility in the Middle East, the new owner discovered extensive groundwater contamination. The buyer alleged that the seller had not disclosed important environmental liabilities before the transaction, leading to an arbitration claim valued at circa US$15 million. Demonstrating that the contamination was concealed and that the environmental risks were greater than disclosed proved challenging. The complexity was heightened by the large volume of environmental data, which was spread across several hundred files in various formats and of inconsistent quality, making it difficult to extract reliable insights.

What we did

To investigate the seller’s position for the court, HKA provided a multidisciplinary team of experts. Groundwater specialists compiled, processed and evaluated tens of thousands of lines of environmental data from before the site acquisition to clarify the extent of contamination and identify appropriate remediation options. Additionally, quantum experts delivered detailed, evidence-based analysis to assess the reasonableness of the associated costs.

Outcomes

This case demonstrates HKA’s ability to integrate environmental expertise with regulatory and cost analysis, supporting clients in complex, high-value arbitration proceedings.