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Construction Law in the United Arab Emirates and the Gulf
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Table of Contents

About the Author xi Preface xiii 1 Overview 1 1.1 Basis of government 2 1.2 Division of powers in the UAE 2 1.3 Islamic Shariah 4 1.4 Civil law 6 1.5 Domestic courts 8 1.6 Financial free zones 10 2 Construction Law 13 2.1 Muqawala 14 2.2 Commercial and civil contracts 15 2.3 Delict (tort) 18 2.4 Public procurement 20 2.5 Administrative contracts 23 3 Contract Formation 25 3.1 Components of a valid contract 25 3.2 Offer and acceptance 26 3.3 Certainty 28 3.4 Mutual intentions 32 3.5 Capacity 33 4 Interpretation 35 4.1 Statutory maxims 35 4.2 Intentions 36 4.3 Resolution of ambiguity 39 4.4 Absence of express terms 39 5 Contractual Principles 41 5.1 Binding obligations 41 5.2 Mandatory obligations 43 5.3 Third parties 46 5.4 Subcontractors 48 5.5 Good faith 49 5.6 Related obligations 50 5.7 Abuse of rights 52 5.8 Unfair contract terms 53 5.9 Unforeseen circumstances 54 6 Health, Safety and Welfare 59 6.1 Construction safety 59 6.2 Design and management responsibilities 65 6.3 Welfare 66 6.4 International Labour Organisation 68 6.5 Inspection and reporting 69 6.6 Sanctions and penalties 71 7 Design and Supervision 81 7.1 Duty of care 82 7.2 Obligation of result 84 7.3 Standard of care 87 7.4 Defences 88 7.5 Statutory duties 89 7.6 Compensation 91 7.7 Joint liability 91 8 Defects 95 8.1 Materials 95 8.2 Workmanship 97 8.3 Statutory duties 98 8.4 Remedies 100 9 Decennial Liability 103 9.1 Statutory sources 104 9.2 Strict liability 106 9.3 Contractual status 107 9.4 Compensation 109 9.5 Mitigating decennial liability 110 9.6 Public projects 112 10 Physical Damage and Personal Injury 115 10.1 Delict 115 10.2 Criminal damage 116 10.3 Presumed liability for property damage 117 10.4 Inherent danger (nuisance) 118 10.5 Service lines and public utilities 120 11 Time for Completion 123 11.1 Agreement 123 11.2 Extension of time 125 11.3 Assessment of entitlement 125 11.4 Time at large 129 11.5 Concurrent delay 130 11.6 Prolongation costs 135 12 Delay Damages and Other Remedies 137 12.1 Termination for delay 137 12.2 Reducing delay damages 138 12.3 Increasing delay damages 142 12.4 Administrative contracts 143 13 Price 147 13.1 Formation of a contract 147 13.2 Fair remuneration: Contractor 148 13.3 Fair remuneration: Consultant 150 13.4 Supply contracts 151 13.5 Lump sum and remeasure contracts 151 13.6 Variations 152 13.7 Subcontracts 153 13.8 Public procurement in the UAE 154 14 Payment 157 14.1 Payment on delivery 157 14.2 Payment certificates 159 14.3 Subcontracts 159 14.4 Conditional payment clauses 160 14.5 Bank guarantee 163 14.6 Cheque 165 15 Interest 167 15.1 Riba and usury 167 15.2 Statutory right 169 15.3 Fixed or crystallised debt 170 15.4 Interest in the UAE 172 15.5 Interest under the FIDIC Conditions 172 15.6 Financing charges 173 16 Suspension 175 16.1 FIDIC Conditions 175 16.2 Statutory right of suspension 176 16.3 Excluding the right of suspension 177 16.4 Formalities 178 17 Termination 179 17.1 Termination of an innominate contract 179 17.2 Termination of a muqawala: Employer 183 17.3 Termination of a muqawala: Contractor 184 17.4 Consequences of termination 187 17.5 Impossibility and force majeure 188 18 Self -help Remedies 191 18.1 Retention of ownership 191 18.2 Possessory lien 193 18.3 Priority right 196 18.4 Direct payment 197 18.5 Set off 198 19 Damages 201 19.1 Performance by compulsion 201 19.2 Entitlement to damages 203 19.3 Assessment of damages 204 19.4 Global claims 206 19.5 Loss of profit 207 19.6 Consequential and indirect loss 209 19.7 Mitigation 211 19.8 Limitation of liability 212 20 Evidence 215 20.1 Burden of proof 215 20.2 Documents 216 20.3 Disclosure and production 216 20.4 Witness testimony 218 20.5 Court appointed experts 219 20.6 Conclusive findings of fact 221 21 Prescription 223 21.1 Islamic Shari'ah 223 21.2 Commercial obligations 224 21.3 Civil obligations 225 21.4 Restriction on amendment 226 22 Litigation 229 22.1 Court structure 229 22.2 International jurisdiction 233 22.3 Jurisdiction between emirates 234 22.4 Commencement of proceedings 235 22.5 Proceedings against the government 237 22.6 Summary actions 238 22.7 Mediation and adjudication 242 23 Enforcement 245 23.1 Procedure 245 23.2 Appeal 247 23.3 Enforcement outside the jurisdiction 248 24 Arbitration 253 24.1 Right to arbitrate 253 24.2 Treaty arbitration 256 24.3 Validity of an arbitration agreement 257 24.4 Capacity to agree 260 24.5 Jurisdiction and powers 264 24.6 Procedures and formalities 267 24.7 Challenging an arbitrator 272 24.8 Enforcement of domestic awards 273 24.9 Enforcement of foreign awards 278 24.10 New York Convention 280 25 Key Features and Differences 285 25.1 Key features of Islamic civil law 285 25.2 FIDIC Conditions 288 25.3 Gulf states contrasted 289 Commentary: FIDIC Conditions 293 Glossary 387 Index 391

About the Author

Michael Grose obtained a law degree in the UK before completing his legal training in 1993 with an international law firm in the City of London. He relocated to Dubai in 1998 where he is the head of the regional construction and projects practice of a global law firm. As a veteran of the Gulf, Michael has extensive knowledge not only of the region's laws but also the application of these laws to construction contracts and disputes. Michael frequently reviews, advises on and prepares construction contracts for major projects, bringing him into frequent contact with the FIDIC suite of contract conditions. He has drafted amendments to these conditions to adapt them for use in the Gulf and to address the most commonly arising issues. Michael has also been involved in many of the region's largest and most high profile construction and engineering disputes. As a result, he has considerable experience of conducting arbitration in the Gulf, including as an arbitrator appointed by the Dubai International Arbitration Centre. Working with licensed local advocates he has acted on numerous occasions for clients in the Gulf's domestic courts. This has included taking cases through all stages of the court proceedings, from obtaining freezing orders against bank guarantees, attending court appointed experts' meetings through to the execution of final judgments. He is also familiar with proceedings the Dubai International Financial Centre Courts having, amongst other things, acted for a main contractor in the first construction case to come to trial in the DIFC Courts. Michael has also presented at numerous conferences, including the Commercial Law Conference in Bahrain (organised by the United States Department of Commerce) for members of the region's judiciary, the inaugural international conference of the Society of Construction Law held in Singapore and the inaugural conference of the Gulf branch of the Society of Construction Law. He is recommended in the top tier of all the leading independent legal directories including Who's Who Legal, Chambers Global and Legal 500.

Reviews

Al-?amdu lillah - finally, a proper book on construction law in the Gulf region... Michael Grose's book is an indispensable guide to anyone with an interest in the law relating to construction contracts in the Gulf region. It is practical, sensible, and based on unrivalled research. Like certain provisions of the Civil Codes, this book is mandatory -Richard Harding QC, in Construction Law International

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