Strategies for Resolving Construction Disputes in the UAE

07 March 2025

Josleen Deeb

The UAE’s booming construction sector is a cornerstone of national growth—but disputes over delays, defects or payment can derail projects, inflate costs and strain key relationships.

Dubai: Proactive dispute-resolution measures help stakeholders preserve time, budgets and reputations. Below are six proven strategies to navigate and resolve construction conflicts in the UAE.

Master the Legal Framework

• UAE courts follow a civil-law system, but parties may opt into arbitration under Federal Decree-Law No. 6 of 2018 (Arbitration Law).

• Identify your governing law clause: UAE Federal Law, local emirate bylaws or a specific free-zone regime (e.g., DIFC-LCIA).

• Align your dispute-resolution clause (court vs. arbitration, seat, language, applicable rules) with your risk profile and project scale.

Intervene Early Through Negotiation & Mediation

• Escalating a dispute to litigation or arbitration magnifies cost and delay.

• Launch informal settlement talks at the first sign of disagreement—seek common ground on scope changes, unforeseen site conditions or payment shortfalls.

• If direct talks stall, appoint a neutral mediator (judicial-center or private) to facilitate a binding or non-binding settlement.

Draft Clear, Unambiguous Contracts

• Define roles, deliverables, quality benchmarks, milestone dates and payment triggers in subcontract agreements, project-management contracts and OEM supply deals.

• Stipulate change-order procedures, liquidated-damages formulas and dispute-notice requirements to avoid procedural pitfalls.

• Specify your preferred dispute forum, applicable law, expert-determination rights and fast-track adjudication options.

Maintain Meticulous Project Records

• Retain daily site logs, progress photographs, meeting minutes, correspondence (including WhatsApp/Teams chats) and approved design revisions.

• Centralize document control with a shared online repository, ensuring time-stamped entries and version audits.

• Well-organized records bolster your negotiating position and provide compelling evidence in court or tribunal

Adopt a Collaborative Problem-Solving Mindset

• Assemble a joint claims-management team, including project managers, legal counsel, QS experts and HR, to diagnose root causes.

• Host regular “dispute-avoidance” workshops to discuss emerging risks—foster transparency and mutual trust.

• Where appropriate, engage a neutral technical adviser or delay-analysis expert to co-author a mutually agreed claim assessment.

Embrace Tailored Alternative Dispute Resolution (ADR)

• Mediation: Cost-effective facilitation can salvage stakeholder relationships and deliver a speedy settlement.

• Arbitration: Choose a reputable arbitral institution (DIAC, ADCCAC, DIAC-LCIA, ICC or DIFC-LCIA) and seat your proceeding in a neutral venue.

• Adjudication or expert determination: Some UAE contracts permit interim, binder decisions on quantum or technical issues—useful for fast-tracking payment relief.

Next Steps

·       Audit Your Contracts: Review dispute-resolution clauses and harmonize them with your commercial objectives.

·       Train Your Teams: Equip project managers and onsite engineers with basic mediation skills and early-warning protocols.

·       Streamline Record-Keeping: Deploy a secure, cloud-based document-management system with audit trails.

·       Select Trusted ADR Partners: Pre-qualify mediators, arbitrators and technical experts familiar with UAE construction norms.

ALKETBI TOUCH

Our Construction & Infrastructure team assists developers, contractors and consultants across the UAE to Draft bulletproof contracts with bespoke ADR pathways; Implement early-dispute-resolution programs, including mediation training; Manage complex claims—investigations, remediations and negotiations; and Represent you in arbitration, expert determination and court proceedings. To safeguard your next project from costly delays and disputes, contact our arbitration specialists for a tailored risk-mitigation plan.