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Construction Law in the United Arab Emirates and the Gulf

ISBN: 978-1-119-08595-9
424 pages
March 2016
Construction Law in the United Arab Emirates and the Gulf (1119085950) cover image

Description

Construction Law in the United Arab Emirates and the Gulf is an authoritative guide to construction law in the United Arab Emirates and the Gulf. The principal theme is the contrast between construction law in an Islamic civil law jurisdiction and construction law in a common law jurisdiction. the first authoritative text on the application of the laws of the UAE extensive extracts from the region's applicable laws, all translated from Arabic, and hundreds of judgments of the most senior courts used to back up the analysis provided
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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 Sharíah 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

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Author Information

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.
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Reviews

Al-ḥamdu 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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