What are the Key Concepts of UAE Construction Laws?

Posted by Awatif Mohammad Shoqi Advocates & Legal Consultancy on June 30th, 2021

The construction industry in the United Arab Emirates (UAE) principally embraces and follows worldwide accepted procedures for development contracts administered by UAE law or executed in the UAE. These agreements are vigorously demonstrated on International Federation of Consulting Engineers (Fédération Internationale Des Ingénieurs-Conseils) (FIDIC) types of agreements. In any case, local law contemplations ought not be overlooked. The facts demonstrate that, on a fundamental level, the UAE courts perceive and acknowledge the standard terms and conditions set out in the FIDIC contracts. In any case, there are a few UAE law rules that host an immediate effect on the parties’ legally binding terms and prevail on those conditions in several cases. The Construction Lawyers of Dubai will herein discuss the major concepts of UAE construction laws and what shall the construction contractors considered before signing any construction contract in the country.

The Basics

UAE is a civil law jurisdiction, wherein the commercial principles are directed by Civil Transaction Law 5 of 1985 as amended by Federal Law No. 1 of 1987 (Civil Code) and in the Commercial Transactions Law No. 13 of 1993 (Commercial Code).

All the more explicitly, development contracts are managed by Articles 872 to 896 of the Civil Code highlighting the provisions of Muqawala Contracts (Building Contracts) and other general standards of UAE law systematized in the Civil Code and the Commercial Code.

A portion of these provisions are basic or boiler plates, which implies that they are default arrangements and that parties should unequivocally insert these clauses in the contract. Different arrangements are rules of public request, which implies that parties can’t contract out of these standards when they look for enforcement in the UAE, even where a foreign law is relevant to their agreement or potentially a foreign court or intervention council is able to entertain the dispute emerging from the agreement. Accordingly, deciding on the use of a foreign law to a construction contract  or adopting a foreign court or an arbitration institute to resolve the disputes between the parties will not prevent or immune the parties for adhering UAE construction laws and regulations.

Resolving Disputes

Disputes are regular in the construction business. Debates emerge because of differences between any of the contracting parties. Questions devastatingly affect development ventures, as they may bring about cost overwhelms, postponements, and loss of efficiency. It is imperative to comprehend the reasons for disputes to finish a construction project within the prescribed time limit. Construction claims sway development goals and strain connections between contracting parties. A debate in construction ventures is viewed as a hindrance to the completion of a construction project. Nevertheless, to overcome such issues, the UAE offers many alternative dispute resolution mechanisms to resolve such disputes and achieve an amicable or favourable solution for both parties. For instance, the parties can either resolve the issue through negotiation, mediation, arbitration or litigation. Dubai Top Lawyers have often guided construction contractors or other parties to effectively scrutinize the available options and opt for the best solution to prevent the unnecessary delay in the projects and to maximize their profit accordingly.