Professional Documents
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Construction
Law UAE
Introduction
This, the first edition of Construction Law UAE, looks at three
issues which have emerged from the white heat of the UAEs
construction market.
First, is the market too hot for traditional lump sum
turnkey procurement? With most mega-schemes
half-completed before the design and specification
are finalised, could the market benefit from a move
towards cost reimbursable guaranteed maximum price
contracting? We look at some of the pros and cons of this
approach in UAE: Time for GMP Contracting?
Second, claims. The FIDIC Fourth Edition remains the contract
form of choice in the UAE. One of its advantages, of course,
is the flexibility it allows for instructing and valuing scope
changes and the consequential re-scheduling. On the other
hand, its antiquated and obscure language can make the
meaning of key provisions hard to pin down. This is particularly
the case where notice procedures are to be complied with
as a precursor to claims for additional time and money. How
should these sometimes imprecise and conflicting provisions
be understood, particularly when read in the light of relevant
articles of the UAE Civil Code? In I thought youd never notice:
The UAE Civil Code and Claims under the Red Book we
suggest some answers.
Entitlement to Claim
The Red Book provides that in certain circumstances a
Contractors entitlement to claim may be lost if he fails to give
notice of his intention to claim or fails to provide detailed
claim particulars within the timescales prescribed. There
are two provisions of the Red Book which state that a failure
to comply with the specified notice or particularisation
procedures for making a claim will justify the rejection of the
claim.
First, Clause 44.2, which is concerned with applications for
extensions of time. This clause provides that in case of noncompliance with the time limit to provide notice and/or to
provide detailed claim particulars, the Engineer is not bound
to make any determination of a claim for an extension of
time. The Engineer, therefore, has a discretion not to make
a determination if either the time limit for notice or for
particularisation is not met.
Second, Clause 52.2, which applies to applications for payment
for variations. This clause states that the varied work will not
be valued unless notice of an intention to claim extra payment
is made within 14 days of the date of the instruction. Strictly
construed, this clause allows for a claim to be disallowed if the
14 day time limit is not complied with.
Clauses which expressly provide procedures for claim notification and
particularisation are:
Comment
This article highlights only a few examples of how the Red
Book, when read in the context of the applicable provisions
of the Civil Code, might not have the meaning, or at least the
effect, suggested by the express words used. There are, of
course, numerous other provisions of the Civil Code which are
likely to be relevant and must be considered when advising
So, does the UAEs accession to the Convention offer any real
benefits to the UAE construction industry at all? The answer,
perversely, may be yes, but only if the UAE construction
industry is prepared to consider opting for foreign arbitration
venues. These would then generate foreign awards. The
obvious benefit is that the Convention would then apply.
Enforcing a foreign award in the UAE under the Convention
may be considerably easier and quicker than enforcing a
domestic award. Moreover, a party with the benefit of a
UAE award may find it easier to take that award to another
Convention state than to face the hurdles and uncertainties
associated with enforcement in the UAE.
These are peculiar and, presumably, unintended
consequences.
2006 Denton Wilde Sapte, unless otherwise indicated. All information correct as at time of printing. Consistent with our policy when giving advice on a nonspecific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of a specific problem we recommend that you seek
professional advice.
With effect from 1 November 2006 any references to Denton Wilde Sapte should be taken as referring to Denton Wilde Sapte LLP.
The term partner is used to refer to a member of Denton Wilde Sapte LLP or an employee or consultant with equivalent standing and qualifications.
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