UAE Construction Law

8/11/2019 UAE Construction Law

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UAE CONSTRUCTION LAW AND DISPUTE RESOLUTION

INTRODUCTION

Construction contracts form an integral part of the economy and development ofmany countries including the United Arab Emirates (UAE). It is essential that suchcontracts should be undertaken on conditions that hold a fair balance between theinterests of the employer and the contractor and which reflect the role ofindependent consulting engineers. Construction disputes are generally complexwith many interwoven issues involving multiple claims and counter claims whicharise mainly because of the uniqueness of the construction contract itself.Construction disputes normally involve large sums of money and this results in theparties attempts to pursue vigorously all issues and engage in extensive legalarguments to overcome technical shortcomings. The number of constructionprojects and related contracts has increased substantially in the UAE over the lastdecade. This has inevitably given rise to significant numbers of claims either

between contractors and owners / employers or between contractors and sub-contractors. These disputes are resolved either by way of conciliation or arbitrationpredominantly held in the English language, with specialist arbitrators appointeddue to the technical nature of the aspects involved

Litigation is a less preferred mode of dispute resolution in the constructionindustry, although there are a number of Court rulings on important aspects ofconstruction law. As a consequence of this, focus on construction law is increasing.We address below some of the most often encountered issues in construction lawrelated disputes.

1. WHAT IS THE SUBSTANTIVE AND PROCEDURAL LEGAL FRAMEWORK RELEVANT TO

CONSTRUCTION DISPUTES IN THE UAE?

Articles 870 to 896 of the UAE Civil Law No. 2 of 1987 (the Civil Code) relatingto construction works, as well as general maxims and principles set out in thesame law, form the basis of the legal framework relating to construction.

In addition, the provisions of the UAE Commercial Transactions Law No. 18 of1993, (the CTL) would also apply to the extent that the parties to aconstruction claim can be defined as traders carrying out commercial businessin accordance with Articles 6 and 11 of the CTL.

Specialised laws and Decrees - such as Law No. 6 of 1997 relating to contracts

with Government Departments in the Emirate of Dubai. Articles 203 - 219 of the Civil Procedure Law (Law No. 11 of 1992) (the CPL)

relating to Arbitration and appointment of arbitrators as well as authenticationof arbitral awards.

Various Rules of Arbitration and Conciliation as promulgated by Abu Dhabi,Dubai or Sharjah Chambers of Commerce & Industry, Dubai or otherMunicipalities, International Chamber of Commerce, etc.

There are discussions for the promulgation of a Federal Construction Lawimplementing a building code the absence of which has been identified as amajor handicap within the local construction industry.

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2. WHAT IS THE FORM OF A CONSTRUCTION CONTRACT ?

Construction contracts are usually set out in FIDIC (Federation Internationale desIngenieurs Conseils - International Federation of Consulting Engineers) forms.

These are standard forms of contract that are periodically revised (e.g. the FIDIC1998 Conditions) tailored to broad areas of construction (such as Mechanical Works,Electrical works, Subcontracting etc). They are usually amended to suit the morespecific needs of the parties, or the peculiarities of a specific project or legalframework of a certain jurisdiction. FIDIC contracts also contain appendixes for theparties to complete (such as dates, names of parties, arbitration clause, percentageof performance bonds, rates etc). In general FIDIC forms are set in Parts I and II:Part I of the conditions is intended to provide a general framework for theConstruction Contract. Part II contains blank sections for the parties to fill inaccordance with the particular requirements of the work. Part II also contains thespecific details of any modifications required by the parties to the generalprovisions of Part I. For the avoidance of any doubt in the interpretation of the

parties intentions, the contract should also provide that in the event of a conflictbetween the provisions of Part I and Part II, those of Part II are to prevail.

In addition, construction contracts can also have the form of one partys standardterms and conditions (for example, the Dubai Municipalitys Conditions ofContract). Whatever the form of the construction contract, it is important for theparties to factor in all aspects of the UAE construction industry and of thegoverning law of the contract in addition to all the procedural details of the disputeresolution method chosen by them.

3. IS THE ENGINEER A PARTY TO A CONSTRUCTION CONTRACT ?

Although the role of the Engineer is very critical throughout the duration of aconstruction contract (he supervises and authorises the works carried out, issuescertificates that officially confirm the fulfillment of various stages, considersvalidity of claims, variation orders, etc.) it is not in fact a party to the constructioncontract, which is usually an agreement exclusively between a contractor and anemployer (owner of the project in question). The engineer is only a party to acontract it has entered into with the employer. The engineer operates as arepresentative of the employer throughout the construction contract and thereforeany actions he carries out are, in law, considered as those of the Employer. To theextent the Engineer has acted beyond the scope of his contract with the Employer,it is the Employer who has a cause of action against the Engineer and not theContractor. However, it is possible, although relatively rare, to have multi partyarbitration proceedings where all relevant parties are present in an all embracingdispute resolution process.

4. IS THE CONTRACTUALLY AGREED DURATION OF A DEFECTS LIABILITY PERIODBINDING UNDER UAE LAW?

It is important when signing a FIDIC based or other construction contract to alwaysbe fully aware of the potentially relevant mandatory UAE law provisions, as theywill override anything in the contract that contravenes them.

Defects liability periods under most standard form contracts are usually consideredas extension of contract periods and are for one to two years. However, Article 880

of the UAE Civil Code states that the Contractor and the Engineer (if the plans were

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produced by it) will be jointly liable for a period of 10 years to compensate theEmployer for any total or partial collapse of the works to the extent these relate toa building or other fixed installation. This period of time can be extended bycontract but cannot be reduced. The provision does not apply to installations that

are intended to remain in place for a period of less than 10 years. This liability ofthe Contractor is unconditional and can not be circumvented even if it is provedthat the defect or collapse of the construction in question arose as a result of thedefect in the land or even as a result of the Employers consent to the constructionof defective buildings or installations.

5. WHAT IS THECONTRACTOR ENTITLED TO CLAIM IF A PROJECT OF WORKS IS NOT COMPLETED ?

If the cause of preventing the works from being completed is not attributable to theContractor, Article 894 of the UAE Civil Code states that the Contractor will beentitled to the value of the work which it has completed and the expenses it hasincurred in the performance of that work up to the amount of the benefit that the

Employer has derived from that work.

6. WHAT IS THE TIME LIMIT FOR BRINGING A CLAIM AGAINST THECONTRACTOR FOR DEFEETS

DISCOVERED OR COLLAPSE OF A BUILDING OR FIXED INSTALLATION?

Article 883 of the UAE Civil Code states that the time limit for this type of claim willbe three years from the date of the collapse or discovery of the defects.

7. WOULD A CLAUSE SETTING OUT A TIME LIMIT TO ISSUE ARBITRATIONPROCEEDINGS BAR A CONTRACTOR FROM COMMENCING THESE PROCEEDINGSAGAINST THE EMPLOYER AFTER THE PASSAGE OF THAT TIME BAR?

Breach of a procedure set out in a clause of the contract would normally not bar theContractor from instituting arbitration proceedings under UAE law. The time barsthat relate to the bringing of legal actions (before the UAE Courts or a UAE basedArbitral Tribunal) are set out by Federal Laws and the parties cannot normallycontract out of them to the extent that such time bars constitute mandatory UAElaw.

8. HOW SOON SHOULD A CLAIM ARISING OUT OF A CONSTRUCTION CONTRACT BELODGED AND WHAT IS THE TIME LIMIT FOR DOING SO UNDER UAE LAW ?

Most construction contracts specifically state that the Contractor/Subcontractor cannot suspend its obligations under the contract, simply because a claim has arisen.

Therefore, in practice, most Court actions and arbitration proceedings commenceafter completion of works and it is very rare to see a dispute resolution processtaking place before the Courts or the arbitrators whilst works are still in progress.

There are various time limits involved from the date a claim is formed until it isfiled in the form of arbitration proceedings or a Court action. Most FIDIC formcontracts include an elaborate procedure for submission of claims before theEngineer within a specific number of days. The Engineer would normally considerthe merit of those claims and will then issue his decision accordingly. If one of theparties is not satisfied with the Engineers decision within a further prescribednumber of days the concerned party is free to submit a notice for arbitration.

The UAE Commercial Transactions Law (CTL) under Article 95 specifies a timelimit of ten years for an action to be commenced in relation to obligations of one



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13. ARE CONSTRUCTION DISPUTES REFERRED TO ARBITRATION IN THE UAE?

Arbitration is gradually becoming a popular construction dispute resolution modein the UAE. An important factor influencing parties decision to opt for arbitration,

as a dispute resolution process is the fact that English is the widely accepted andagreed language of conducting arbitration proceedings. The benefits arising out ofthis factor are substantial: not only do parties save costs in translating voluminousdocumentation but, more importantly, specialised English speaking experts fromvarious fields of the construction industry are appointed as arbitrators. They areusually very familiar with the technical aspects of a construction dispute and theypossess a wealth of experience on the basic principles of construction disputeresolution. This, together with the time limit of six months (subject to extension bymutual agreement) for issuing an award provided for in Article 210 of the UAECivil Procedures Law renders arbitration an increasingly preferred option forconstruction dispute resolution.

14. CAN AN ARBITRAL AWARD RESOLVING A CONSTRUCTION DISPUTE BECHALLENGED OR NULLIFIED BEFORE THE UAE COURTS AT THE REQUEST OF THELOSING PARTY?

It is possible to challenge an arbitral award but only on specific proceduralgrounds. These are set out in Article 216 of the UAE Civil Procedures Law, whichstates that:

ARTICLE - 216

1. In the following instances, the opposing parties may apply for the annulment ofan Arbitrators ruling when the court is examining whether to validate it:

(a) If given without a deed of arbitration or if based on an invalid deed, or iflapsed through prescription, or if the arbitrators have exceeded the limits ofthe deed.

(b) If the ruling has been given by arbitrators not appointed according to the law,or if given by some of them without being so empowered in the absence ofthe others, or if given under deed of arbitration in which the subject of thedispute is not stated, or if given by someone not competent to agree toarbitration or by an arbitrator who does not fulfill the legal requirements.

(c) If there is something invalid in the ruling or in the procedures affecting the

ruling.2. Acceptance of invalidity shall not be inhibited by the opposing party

abandoning his right thereto before the Arbitrators ruling is issued.

Ultimately, the award will take the form of a judgment and as such it is imperativeto ensure that it is as legally sound as possible so that its nullification by the UAECourts is avoided and that throughout the Arbitration procedure (in fact from thestage of drafting the arbitration clause or arbitration agreement) attention isfocused on the ultimate validity of the arbitration award.



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15. WHAT ARE THE MOST IMPORTANT ASPECTS OF AN ARBITRATION CLAUSE IN ACONSTRUCTION CONTRACT OR SUBCONTRACT?

The Claimant needs to ensure that the arbitration award, when issued, will

survive any attempt made by the Defendant through the three tiers of the UAEjudicial system (Court of First Instance, Court of Appeal, Court of Cassation) tonullify it on the basis of lapse of procedure or breach of a mandatory provision ofUAE law.

Some of the basic points that the parties should bear in mind in this respect, includethe following:

Jurisdiction of Arbitration

As the UAE have not yet signed the 1958 New York Convention on mutualenforcement of arbitration awards, it is important for a party potentially interestedin enforcing an arbitration award on UAE based entity/security, to avoid agreeing

a foreign (i.e., non-GCC) arbitration clause. However, there are some bilateralagreements with certain countries (e.g. France) making enforcement of arbitrationawards issued in those countries possible.

Clear Arbitration Clause - Arbitration Agreement

The arbitration clause or agreement should specify the rules under which anydispute resolution by way of arbitration should be conducted. These may be theRules of the Dubai Chamber of Commerce & Industry, Dubai Municipality Rules,UNCITRAL, ICC etc. For a more effective supervision and conduct of arbitrationproceedings held in the UAE it is advisable to agree to local (as opposed tointernational) rules. This will facilitate the certification of the award by the

supervising body and subsequently its authentication through the UAE Courts. Inaddition, it is preferable that the parties to the dispute, rather than their lawyers,sign any arbitration agreement. This is because in most cases, although a Power ofAttorney gives a lawyer rights to conduct an arbitration on behalf of his client,occasionally it may not include an express right for the lawyer to sign bindingarbitration agreements.

Determination of whether the dispute will be resolved by one or three Arbitrators.

Very often this issue is left unclear in arbitration clauses or agreements that are partof a Construction contract or Subcontract and becomes the object of a separatedispute. The options available are essentially three:

either one Arbitrator appointed by mutual agreement of the parties or by aneutral entity (such as a Chamber of Commerce & Industry) or

three Arbitrators, one appointed by each party and the third appointed by thetwo arbitrators or a neutral entity, the majority of whom will determine thedispute or finally

two Arbitrators one appointed from each party and an Umpire who will onlydetermine the dispute if the two Arbitrators disagree on their findings.



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It is important that the Claimant always focuses on this issue and ensures that if itbecomes obvious that the arbitration award will not be issued within the prescribedtime limit, an agreement for extension is obtained as soon as possible.

18. HOW CAN AN ARBITRAL AWARD RESOLVING A CONSTRUCTION DISPUTE BEENFORCED ON THE LOOSING PARTYS ASSETS?

As in most jurisdictions, an award needs the authentication of the local courts for itto be equivalent to a Court judgment and to be enforceable against the Defendantsassets. This involves an application to the Court of First Instance, the judgment ofwhich is then appealable within 30 days before the Court of Appeal. Thereafter, theCourt of Appeal judgment can be appealed within 30 days before the Court ofCassation, the judgment of which is final. During the process of this authentication,the UAE courts cannot consider the merits of the arbitrators findings. This isclearly stated in paragraph 1 of Article 217 of the UAE Civil Procedure Code, whichstates that arbitrators rulings may not be contested in any way. There have also

been a number of Dubai and Abu Dhabi Court of Cassation rulings confirming thatappeals against the merits of arbitrators awards are not permissible.

19. ARE LEGAL COSTS AND RELEVANT EXPENSES INCURRED IN ARBITRATION

PROCEEDINGS RECOVERABLE BY THE SUCCESSFUL PARTY TO A CONSTRUCTION DISPUTE?

Although legal costs are not generally recoverable by the successful party underUAE Law, in some cases, the successful party will be awarded a greater portion ofits actual expenses and legal costs than it would have done had it resolved itsdispute through litigation. For example, Article 48 of the Dubai Chamber ofCommerce & Industry Rules for Arbitration and Conciliation states that:

The costs of conciliation or arbitration shall include charges of the Chamber,

remuneration and actual expenses of the conciliators or arbitrators, fees andexpenses of the experts and the translators if any, normal expenses incurred by theparties in preparation of their pleadings, any administrative expenses relating tomeeting-rooms rentals, typing, recording, photocopying and others incurred in thecourse of the conciliation or arbitration proceedings.

In addition, it is possible for both parties at the beginning of the Arbitration to agreeon bearing their own legal costs or that these will be borne by the losing party. Thehigher costs that are generally involved in arbitration coupled by the inevitablelegal and court fees of the subsequent litigation (for authentication of the arbitrationaward) can mean that the ultimate cost exposure to the successful party inarbitration may be substantially greater than in litigation.

20. CAN ONE OF THE PARTIES GO TO COURT IN A DISPUTE ON A CONSTRUCTIONCONTRACT WITH AN ARBITRATION CLAUSE?

The claiming party may file a case with the court even where the contract containsan Arbitration clause, but this will be subject to the Defendant expressly referringto the Arbitration clause at the first court hearing in accordance with Article (203/5)of the Civil Procedures Law. Upon the Defendant so doing, the Court will refer thematter to Arbitration. Conversely, if the Defendant fails to object and refer to theArbitration clause at the first court hearing, the Court will assume that thearbitration clause has been waived by both parties and will continue with theresolution of the dispute through litigation. The Plaintiff in such approach should

bear in mind that it may lose the court fees and advocacy charges if the Defendantsuccessfully raises the Arbitration clause defence at the first hearing.



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ANNEX A: MODEL CLAUSES OF CONCILIATION AND ARBITRATION

The DCCI Centre for Commercial Conciliation & Arbitration recommends theparties wishing to resolve their disputes under the DCCI Rules of Commercial

Conciliation and Arbitration include in their contracts one of the following clausesaccording to their choice of dispute resolution mode:

Conciliation Clause:

Any dispute arising from this contract shall be referred to conciliation inaccordance with the provisions set forth in the Rules of Commercial Conciliationand Arbitration of the Dubai Chamber of Commerce & Industry.

Arbitration Clause :

Any dispute connected with the formation, performance, interpretation,nullification, termination or invalidation of this contract or arising therefrom or

related thereto in any manner whatsoever shall be referred to arbitration inaccordance with the provisions set forth in the Rules of Commercial Conciliationand Arbitration of the Dubai Chamber of Commerce & Industry.

Conciliation and Arbitration Clause:

Any dispute connected with the formation, performance, interpretation,nullification, termination or invalidation of this contract or arising therefrom orrelated thereto in any manner whatsoever shall be referred to conciliation inaccordance with the provisions set forth in the Rules of Commercial Conciliationand Arbitration of the Dubai Chamber of Commerce & Industry.

If the Dispute is not settled by conciliation, it shall be referred to arbitration in

accordance with the provisions set forth in the said Rules.

ANNEX B: EXAMPLE OF PERFORMANCE GUARANTEE FORM

THIS AGREEMENT is made on the ........ day of ....... 20...........................

BETWEEN: (1) ................................... ....... [name of bank surety or insurancecompany] of .................................... [address] (hereinafter calledthe Guarantor); and

(2) .................................................. [ name of Employer]

of ............................................... [address] (hereinafter called theEmployer).

WHEREAS:

A. This agreement is supplemental to a contract (hereinafter called the Contract)made between (1) the Employer and (2) [name of Contractor] of....................[address of Contractor] (hereinafter called the Contractor)whereby the Contractor agreed and undertook to design and execute andcomplete and remedy any defects in the Works of ........................................ [nameof Contract and brief description of the works] for the sum of ........................[amount in Contract currency] being the Contract Price ; and

B. The Guarantor has agreed to guarantee the due performance of the Contract inthe manner hereinafter appearing.



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IT IS HEREBY AGREED as follows:

1. Subject to Clause 2 if the Contractor (unless relieved from the performance byany clause of the Contract or by statute or by the decision of a tribunal ofcompetent jurisdiction) shall in any respect fail to execute the Contract orcommit any breach of his obligations thereunder then the Guarantor willindemnify and pay the Employer the damages sustained by him as aconsequence of such failure or breach not exceeding the aggregate sum of .........[amount of guarantee] ............ [in words], such sums being payable in the typesand proportions of currencies in which the Contract Price is payable.

2. The payment by the Guarantor will only be made if, prior to the earlier of thedate of issue of the Performance Certificate or .......................(the End Date), theGuarantor has received:

(a) Written notice from both the Employer and the Contractor that the amountof damages payable to the Employer is agreed between the Employer and theContractor; or

(b) A copy of a notice of arbitration issued by either the Employer or theContractor under the Contract which is subsequently followed (whetherbefore or after the End date) by a legally certified copy of an award issued inarbitration proceedings carried out in conformity with the Contract that theamount of the damages is payable to the Employer; or

(c) a legally certified copy of a decision of the Dispute Adjudication Board underthe Contract in respect of which no notice of dissatisfaction has been givenby either the Employer or the Contractor within twenty eight days of thedecision under the Contract stating an amount due to the Employer.

3. The Guarantor shall not be discharged or released from his Guarantee by an

arrangement between the Contractor and the Employer, with or without theconsent of the Guarantor, or by any forbearance on the part of the Employer,whether as to payment, time, performance or otherwise, and any notice to theGuarantor of any such arrangement, alteration or forbearance is herebyexpressly waived.

4. This Guarantee shall not be assignable by the Employer and upon it ceasing tobe in full force and effect the Employer shall return the same to the Guarantorwithin 14 days.

5. Words and expressions defined in the Contract shall so far as the context admitsbear the same meaning in this Guarantee.

6. This Guarantee shall be governed by the laws of ................

Signed by .................................... Signed by ....................................

For and on behalf of ...................... For and on behalf of ......................

On (date) .................................. On (date) ..................................

in the capacity of ......................... in the capacity of .........................

and in the presence of .................... and in the presence of ....................

Seal (where applicable) Seal (where applicable)



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ANNEX C: EXAMPLE OF SURETY BOND FOR PERFORMANCE FORM

By this Bond..................................................[name and address of Contractor] asPrincipal (hereinafter called the Contractor) and ........................... [ name, legal

title and address of surety, bonding company or insurance company] as Surety(hereinafter called the Surety), are held and firmly bound unto..............................[name and address of Employer] as Obligee (hereinafter calledthe Employer) in the amount of ...... [amount of Bond]..................................................[in words], for the payment of which sum well andtruly to be made in the types and proportions of currencies in which the ContractPrice is payable, the Contractor and the Surety bind themselves, their heirs,executors, administrators, successors and assigns, jointly and severally, firmly bythese presents.

WHEREAS the Contractor has entered into a written Agreement with the Employerdated the ...... day of ...19.... for ......[name of Contract] in accordance with the

documents listed therein, which are by reference made part hereof and arehereinafter referred to as the Contract.

NOW, THEREFORE, the Condition of this Obligation is such that, if the Contractorshall promptly and faithfully perform the said Contract (including anyamendments thereto) then this obligation shall be null and void; otherwise it shallremain in full force and effect. Whenever the Contractor shall be, and declared bythe Employer to be, in default under the Contract, the Employer having performedthe Employers obligations thereunder, the Surety may promptly remedy thedefault, or shall promptly:

(1) complete the Contract in accordance with its terms and conditions; or

(2) obtain a tender or tenders from qualified tenderers for submission to theEmployer for completing the Contract in accordance with its terms andconditions, and upon determination by the Employer and the Surety of thelowest responsive tenderer, arrange for a Contract between such tenderer andEmployer and make available as work progresses (even though there should bea default or a succession of defaults under the Contract or Contracts ofcompletion arranged under this paragraph) sufficient funds to pay the cost ofcompletion less the Balance of the Contract Price; but not exceeding, includingother costs and damages for which the Surety may be liable hereunder, theamount set forth in the first paragraph hereof. The term Balance of the ContractPrice, as used in this paragraph, shall mean the total amount payable by

Employer to Contractor under the Contract, less the amount properly paid byEmployer to Contractor;

(3) Pay the Employer the amount required by Employer to complete the Contract inaccordance with its terms and conditions up to a total not exceeding the amountof this Bond.

The Surety shall not be liable for a greater sum than the specified penalty of thisBond.

Any suit under this Bond must be instituted before the issue of the PerformanceCertificate.

No right of action shall accrue on this Bond to or for the use of any person or



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corporation other than the Employer named herein or their heirs, executors,administrators, successors and assigns of the Employer.

In testimony whereof, the Contractor has hereunto set his hand and affixed his seal,

and the Surety has caused these presents to be sealed with his corporate seal dulyattested by the signature of his legal representative, this ........ day of ....... .

Signed by .................................. Signed by ....................................

For and on behalf of ..................... For and on behalf of ......................

On (date). ................................. On (date) ..................................

In the capacity of ......................... In the capacity of .........................

and in the presence of .................... and in the presence of ....................

Seal (where applicable) Seal (where applicable)

ANNEX D: EXAMPLE OF GUARANTEE FOR ADVANCE PAYMENT FORM

To:....................................... [name of Employer]

................................................ [address of Employer]

............................................. [name of Contract]

Gentlemen:

In accordance with the provisions of the Conditions of Contract, Sub-Clause 13.2

(Advance Payments) of the above mentioned Contract, ..............[name andaddress of Contractor] (hereinafter called the Contractor) shall deposit with.....................[name of Employer] a bank guarantee to guarantee his proper andfaithful performance under the said Clause of the Contract in an amount of................. ..........[amount of guarantee] ...........[in words].

We, the ..........................[bank or financial institution], as instructed by theContractor, agree unconditionally and irrevocably to guarantee as primary obligorand not as Surety merely, the payment to ..........................[Name of Employer] on hisfirst demand without whatsoever right of objection on our part and without his firstclaim to the Contractor, in the amount not exceeding ........................[amount ofguarantee] ..................................[in words].

We further agree that no change or addition to or other modification of the terms ofthe Contract or of Works to be performed thereunder or of any of the Contractdocuments which may be made between ........[name of Employer] and theContractor, shall in any way release us from any liability under this guarantee, andwe hereby waive notice of any such change, addition or modification.

No claim may be made by you under this guarantee until we have received noticein writing from you specifying the amount of each advance payment which hasbeen paid to the Contractor pursuant to the Contract.

Our outstanding liability under this guarantee will reduce by such amounts as maybe notified to us in your authorised writing and stated to be the reduction of thisguarantee required to be made in accordance with the Contract by reason of the



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If our Tender is accepted, we will provide the specified performance security,commence the Works as soon as reasonably possible after receiving the EmployersRepresentatives notice to commence, and complete the Works in accordance withthe above-named documents within the time stated in the Appendix to Tender.

Unless and until a formal Agreement is prepared and executed this Tender, togetherwith your written acceptance thereof, shall constitute a binding contract betweenus.

We understand that you are not bound to accept the lowest or any tender you mayreceive.

Yours faithfully

Signature ............................................. in the capacity of ............................

Duly authorized to sign tenders for and on behalf of .............................................

......................................................................................................

Address .......................................................................................................

......................................................................................................

Date ............................................

* If the Tenderer does not accept, this paragraph may be deleted and replaced by:

We do not accept your suggestions for the appointment of the Dispute AdjudicationBoard, and propose that we jointly agree upon the appointment after the EffectiveDate (unless previously agreed) in accordance with Sub-Clause 20.3 of theConditions of Contract. [OPTIONAL: Our Proposal includes our suggestions forthis appointment, but these suggestions are not conditions of this Tender.]



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APPENDIX TO TENDER

[Note: with the exception of the items for which the Employers requirements havebeen inserted, the following information must be completed before the Tender is

submitted]Sub-Clause

Employers name and address ......... 1.1.2.1 ............................................

& 1.8 ............................................

Contractors name and address ........ 1.1.2.2 ............................................

& 1.8 ............................................

Name and address of 1.1.2.3 ............................................

The Employers Representative ....... & 1.8 ............................................

Time for notice to commence ......... 8.1 ...................................... days

Time for completion of the Works .... 1.1.3.4 ...................................... days

If Sub-Clause 13.15 does not apply:

Foreign Currency / Currencies ......... 1.1.5.3 as named in the TENDER

Law of Contract ......................... 1.4 ..............................................

Ruling language ......................... 1.4 .............................................

Language for communications......... 1.4 .............................................

Electronic transmission systems ...... 1.8 .............................................

Confidential details ..................... 1.12 .............................................



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Percentage of retention ................... 13.3 ..........................................%

Limit of Retention Money................ 13.3 .................% of the Contract Price

If Sub-Clause 13.5 applies: 13.5 ....................................[list]

Plant and Materials for payment

When delivered to the Site.......

Minimum amount of Interim 13.6 ................% of the Contract Price.

Payment Certificates.......................

If Sub-Clause 13.15 applies: 1.1.5.3

&

Payments in local and Foreign Currencies. 13.15

Currency Unit Percentage payable in Rate of exchange: number

such Currency of Local per unit of Foreign

Local: ____________[name] _____________________ 1.000

Foreign: __________[name] _____________________ _____________________

___________[name] _____________________ _____________________

If there are Provisional Sums:

Percentage for adjustment of 14.5(b) ...........................................%Provisional Sums ..........................

Amount of insurance for design......... 18.1 ..............................................

Amount of third party insurance......... 18.3 ..............................................



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Periods of submission of insurance: 18.5

(a) evidence of insurance ...... .................................. days

(b) relevant policies ............ ................................... days

Number of members of

Dispute adjudication Board .............. 20.3 ...........................................

Member of Dispute Adjudication Board The President of FIDIC or a person

(if not agreed) to be nominated by....... 20.3 appointed by such President

Arbitration rules ........................... 20.6 ..............................................

Number of arbitrators...................... 20.6 ..............................................

Language of arbitration.................... 20.6 ..............................................

Place of arbitration......................... 20.6 ..............................................

If ICC rules are NOT to apply - Either:

Arbitration rules to be 20.6 ..............................................

administered by, Or: Arbitrator

(if not agreed) to be nominated by

Description Value (percentage of Time for completion Liquidated Damages

(Sub-Clause 1.1.6.9) Contract Price) * (Sub-Clause 1.1.3.4) (Sub-Clause 8.6)

_____________ _____________ _____________ _____________

_____________ _____________ _____________ _____________

_____________ _____________ _____________ _____________

* These percentages shall also be applied to the first half of the Retention Moneyunder Sub-Clause 13.9

Initials of signatory of Tender ____________________________________________



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ANNEX F: MAIN CONTRACT AGREEMENT

This Agreement made the ................................day of ..........................................19 ......

Between .............................of............................(hereinafter called the Employer) ofthe one part, and ....................of ......................(hereinafter called the Contractor) ofthe other part.

Whereas the Employer desires that the Works known as ..................... should bedesigned and executed by the Contractor, and has accepted a Tender by theContractor for the design, execution and completion of such Works and theremedying of any defects therein,

The Employer and the Contractor agree as follows:

1. In this Agreement words and expressions shall have the same meaning as arerespectively assigned to them in the Conditions of Contract hereinafter referredto.

2. The following documents shall be deemed to be for and be read and construedas part of this Agreement:

(a) The Letter of Acceptance dated ............

(b) The Employers Requirements

(c) The Tender dated ...........

(d) The Conditions of Contract (Parts I and II)

(e) The Addenda nos.............

(f) The completed Schedules, and

(g) The Contractors Proposal.

3. In consideration of the payments to be made by the Employer to the Contractoras hereinafter mentioned, the Contractor hereby covenants with the Employer to

design, execute and complete the Works and remedy any defects therein, fit forpurpose in conformity with the provisions of the contract.

4. The Employer hereby covenants to pay the Contractor, in consideration of thedesign, execution and completion of the Works and remedying of defectstherein, the Contract Price or such other sum as may become payable under theprovisions of the Contract at the times and in the manner prescribed by theContract.

In witness whereof the parties hereto have caused this Agreement to be executedthe day and year first before written in accordance with their respective laws.



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Authorised signature Authorised signature

Seal of Employer Seal of Contractor

(if any) (if any)

In the presence of: In the presence of:

Name ______________ Name ______________

Signature____________ Signature____________

Address ____________ Address ____________



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ANNEX G: SUBCONTRACT AGREEMENT

This Subcontract Agreement made the ............ .................. .................. .........

day of .................................................... 19 ..........................................

Between ...............................................................................................

Of ......................................................................................................

.....................................(hereinafter called the Contractor) of the one part and

.................................................. of ......................................................

(hereinafter called the Subcontractor) of the other part

Whereas the Contractor is desirous that certain Subcontract Works should beexecuted by the Subcontractor, viz ....................................... and has accepted a

Subcontractors Offer for the execution and completion of such Subcontract Worksand the remedying of any defects therein.

Now this Subcontract Agreement witnesseth as follows:

1. In this Subcontract Agreement words and expressions shall have the samemeanings as are respectively assigned to them in the Conditions ofSubcontract hereinafter referred to.

2. The following documents shall be deemed to form and be read andconstrued as part of this Subcontract Agreement, viz:

(a) The Contractors Letter of Acceptance;

(b) The Subcontractors Offer;

(c) The Conditions of Subcontract (Parts I and II):

(d) The Subcontract Specification;

(e) The Subcontract Drawings: and

(f) The Subcontract Bill of Quantities

(3) In consideration of the payments to be made by the Contractor to theSubcontractor as hereinafter mentioned the Subcontractor herebycovenants with the Contractor to execute and complete the Subcontractworks and remedy any defects therein in conformity in all respects with

the provisions of the Subcontract.(4) The Contractor hereby covenants to pay the Subcontractor in

consideration of the execution and completion of the Subcontract Worksand the remedying of any defects therein the Subcontract Price or suchother sum as may become payable under the provisions of theSubcontract the times and in the manner prescribed by the Subcontract.

Seal In witness whereof the parties hereto have caused this Subcontract

if Agreement to be executed the day and year first written in

any accordance with their respective laws.

The common Seal of ............................................................................................



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.................................................................................................................................

was hereunto affixed in the presence of :

or

Seal Signed Sealed and Delivered by the

if said .............................................................................................

any in the presence of:

APPENDIX TO SUBCONTRACTORS OFFER

Sub-Clause

Amount of security (if any) .................... 2.2 ______________percent

of the Sub contract Price

Time for issue of notice to commence ......... 7.1 _________ days

Subcontractors Time for Completion ......... 7.1 _________ days

Percentage of invoice value of listed 16.1(c) _______ per cent

materials and plant ...............................Percentage of Retention ......................... 16.3 _______ per cent

Minimum amount of Statement ................ 16.3 (a) ______________

Initials of Signatory of Offer ...................

(Notes: All details in the list above shall be inserted before issue of Offerdocuments. Where a number of days is to be inserted, it is desirable. For consistencywith the Conditions of Subcontract that the number should be a multiple of seven.

[Additional entries are necessary where provision is included in the Subcontractfor:

(a) completion of Sections

(b) liquidated damages

(c) a bonus

(d) an advance payment



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ANNEX H:

Rules of Commercial Conciliation and Arbitration of the Dubai Chamber of Commerce &Industry :

Table of Chambers Administrative fees and Arbitrators remunerations

Up to 500 1,000 3,000 7.5% of the amount subject of dispute

Dhs.200,000 (Maximum amount shall be 15,000)

From 200,001 1,000 2,000 3,000 + 1.5% of the amount 15000 + 6% of the amount exceedingupto 500,000 exceeding 200,000 200,000

From 500,001 1,500 3,500 7,500 + 1% of the amount 33,000 + 4% of the amount exceeding

upto 1,000,000 exceeding 500,000 500,000

From 1,000,001 2,000 5,000 12,500 + 0.5% of the amount 53,000 + 2% of the amount

upto 2,500,000 exceeding 1,000,000 exceeding 1,000,000

From 2,500,001 3,000 10,000 20,000 + 0.3% of the 83,000 + 1.5% of the amount

upto 5,000,000 amount exceeding 2,500,000 exceeding 2,500,000

From 5,000,001 4,000 15,000 27,500 + 0.2% of the 120,500 + 0.8% of the amount


From 10,000,001 5,000 20,000 37,500 + 0.1 % of the 160,000 + 0.4% of the amount


20,000,001 7,500 25,000 47,500 + 0.5% of the amount 200,000 + 0.2% of the amount

upto 50,000,000 exceeding 20,000,000 exceeding 20,000,000

More than 10,000 30,000 62,500 + 0.02% of the amount 260,000 + 0.1% of the amount

50,000,000 exceeding 50,000,000 exceeding 50,000,000

The DisputedAmount

In Dirhams Conciliation Arbitration Minimum Amount Maximum Amount

The Chambers *Administration Fees

Arbitrators Remunerations in Dirhams andin Percentage

* Registration Fee for conciliation and arbitration claims is Dhs.200 non-refundable

UAE Construction Law

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Transcript of UAE Construction Law