Civil Law and UAE – Simple Construction Dispute Basics

Construction disputes are disagreements arising from a construction contract between parties such as:

Employer/owner

Main contractor

Subcontractor

Consultant

Engineer

Developer

Supplier

Typical disputes concern delay, payment, defective work, variations, extensions of time, termination, retention money, performance guarantees and damages.

A major current-law point is that Federal Decree-Law No. 25 of 2025 (new Civil Transactions Law) has applied from 1 June 2026, replacing Federal Law No. 5 of 1985. The new law contains updated construction-contract provisions, including Articles 812 onward. (lexismiddleeast.com)

1. Simple Construction Dispute Formula

Remember:

Construction Contract → Work → Delay/Defect/Non-payment → Evidence → Expert → Liability → Remedy

This is the basic structure of most construction disputes.

2. Main Types of UAE Construction Disputes

3. Construction Contract

Under Article 812 of the current Civil Transactions Law, a construction contract is essentially an agreement under which one party undertakes to make something or perform work for consideration promised by the other party. The contractor may undertake to provide work alone or work together with materials. (lexismiddleeast.com)

Simple example

A developer contracts with B to construct a building for AED 20 million.

A = Employer

B = Contractor

AED 20 million = Contract price

Building = Subject of work

Completion date = Time obligation

If B fails to complete the building according to the contract, a dispute may arise.

4. Important Documents

In a construction dispute, the court or tribunal may examine:

Main construction contract

Drawings

Specifications

Bill of quantities

Programme

Payment certificates

Variation orders

Site instructions

Completion certificates

Correspondence

Notices

Expert reports

Invoices

Progress reports

Meeting minutes

Photographs

Testing reports

Performance guarantees

Easy rule

Construction disputes are usually document-heavy disputes.

5. Payment Disputes

One of the simplest construction disputes is:

"The contractor completed the work, but the employer has not paid."

The contractor may produce:

Contract

Invoices

Payment certificates

Delivery documents

Completion certificates

Correspondence

Expert calculations

The employer may respond:

Work was incomplete

Work was defective

Payment was conditional

Contractor caused delay

Set-off is available

Required documents were not supplied

The court may appoint an expert to calculate the actual amount due.

6. Delay Disputes

Delay is one of the most common construction disputes.

Example

Contract:

Completion date = 1 January 2026

Actual completion:

1 June 2026

The employer claims five months of delay.

The contractor responds:

"The delay was caused by the employer."

The court therefore asks:

What caused the delay?

Who controlled the relevant activity?

Were drawings supplied on time?

Was the site available?

Were variations ordered?

Was there a force-majeure event?

Was an extension of time available?

Did the contractor give required notices?

7. Employer-Caused Delay

Examples include:

Late possession of site

Late drawings

Late approvals

Late instructions

Delayed payments

Changes to design

Failure to provide required information

If the employer caused the delay, the contractor may have grounds for an extension of time and/or financial relief, depending on the contract and applicable law.

8. Contractor-Caused Delay

Examples:

Insufficient labour

Poor planning

Lack of equipment

Late procurement

Poor supervision

Defective work requiring rework

Failure to follow the approved programme

The employer may potentially claim contractual delay damages if the relevant contractual and legal requirements are satisfied.

9. Extension of Time

An Extension of Time (EOT) means additional contractual time for completion.

Common causes:

Employer variations

Late information

Unforeseen site conditions

Force majeure

Authority delays

Other contractual extension events

Simple formula

Original Completion Date + Valid EOT = Revised Completion Date

The contractor normally needs to establish the contractual and factual basis for the extension.

10. Defective Construction

A defect occurs when completed work does not comply with:

Contract

Specifications

Approved drawings

Applicable technical requirements

Required quality standards

Examples

Cracks

Water leakage

Structural problems

Incorrect materials

Poor waterproofing

Electrical defects

Inadequate finishing

The court may need technical expert evidence to determine:

What is the defect? → Who caused it? → What is the cost of correction?

11. Variation Claims

A variation is a change to the originally agreed work.

Example

Original contract:

Construct 10 floors.

Employer later instructs:

Add two additional floors.

The contractor may claim:

Additional price

Additional time

Associated costs

The major question becomes:

Was the additional work properly authorised and what is its value?

12. Subcontractor Disputes

A main contractor may hire a subcontractor.

Example

Developer → Main Contractor → Electrical Subcontractor

If the subcontractor completes AED 5 million of work but receives only AED 3 million, a payment dispute can arise.

The subcontractor may rely on:

Subcontract

Purchase orders

Invoices

Progress certificates

Delivery records

Completion certificates

Expert calculations

13. Construction Expert

Construction cases frequently require technical expertise.

An expert may examine:

Contract

Programme

Drawings

Site records

Payment certificates

Quantity calculations

Defects

Delays

Variations

A Dubai Court of Cassation construction decision illustrates that assessment of contractual performance and the adequacy of expert evidence can fall within the trial court's fact-finding function where the expert's conclusions have adequate support in the record. (Dubai Culture)

Important

An expert does not normally decide the ultimate legal question.

The expert provides technical findings; the court determines the legal consequences.

14. Construction Arbitration

Many construction contracts contain arbitration clauses.

A dispute may therefore proceed to:

Negotiation → Engineer/Consultant determination → Mediation → Arbitration

or another contractual sequence.

However, the exact clause matters.

In a Dubai Court of Cassation construction-related dispute, the court examined wording stating that disputes could be referred to arbitration while also preserving the jurisdiction of Dubai courts; the court treated the wording as allowing the parties to choose between the stated routes rather than automatically excluding the courts. (Dubai Culture)

Lesson

Never assume that a clause containing the word "arbitration" automatically excludes court proceedings.

The entire clause must be interpreted.

15. FIDIC Contracts

FIDIC forms are frequently used in construction projects.

A dispute may involve:

Engineer's decisions

Variations

EOT

Delay damages

Payment

Defects

Claims

Dispute boards

Arbitration

But FIDIC does not operate independently of the governing law.

Important principle

Contract terms + UAE mandatory law + governing law + procedural law

must be considered together.

16. Liquidated Damages / Delay Damages

Suppose a contract provides:

AED 50,000 for each day of delay.

The employer may seek the contractual amount.

But the legal treatment of agreed compensation must be examined under the applicable law and contract.

The new Civil Transactions Law has updated the framework concerning agreed compensation and delay damages, making the transition from the 1985 regime particularly important for current construction disputes. (lexismiddleeast.com)

Exam point

Do not simply write:

"The contractor automatically owes the stated amount."

Instead examine:

Contract clause

Actual breach

Responsibility for delay

Applicable statutory rules

Any contractual limitation

Judicial adjustment rules where applicable

17. Termination of Construction Contract

A construction contract may be terminated because of:

Serious contractor breach

Persistent delay

Non-payment

Abandonment

Insolvency

Fundamental failure of performance

Contractual termination provisions

Example

Contractor stops work for several months without lawful justification.

Employer seeks termination.

The court may need to determine:

Was there a breach?

Was it sufficiently serious?

Was notice required?

Was termination contractually permitted?

What compensation follows?

18. Construction Guarantee and Defects

Construction law also deals with liability for serious building defects.

This area is particularly important because UAE law historically contained special rules concerning major structural defects and contractor/engineer responsibility.

Under the new Civil Transactions Law, construction provisions have been updated, including provisions corresponding to the traditional UAE rules on contractor and engineer liability. (lexismiddleeast.com)

Simple idea

Construction completed → Defect appears → Responsibility investigated → Statutory/contractual liability considered

19. Force Majeure

Construction projects can be affected by events outside the parties' reasonable control.

Examples may include:

Natural disasters

Government restrictions

Major supply-chain disruption

War-related disruption

Extraordinary events

But merely saying "force majeure" is not enough.

The parties must examine:

Contract clause

Applicable law

Actual event

Causation

Notice

Impact on performance

Mitigation

Current UAE construction commentary specifically identifies force-majeure and risk-allocation provisions as important issues under construction contracts. (lexismiddleeast.com)

20. Construction Dispute and Evidence

The most useful evidence includes:

Contract evidence

Signed contract

Addenda

Specifications

Performance evidence

Daily reports

Site photographs

Progress reports

Financial evidence

Invoices

Payment certificates

Bank records

Delay evidence

Project programme

Updated schedules

Notices

Correspondence

Technical evidence

Engineering reports

Testing reports

Expert reports

Digital evidence

Emails

WhatsApp

Project-management systems

Electronic approvals

21. Six Important UAE Construction Case Laws

Case 1 – UAE Supreme Court, Appeal No. 226/2007

Facts

The dispute involved a building construction contract. The contractor faced obstacles at the site and the employer subsequently withdrew the work and prevented the contractor from continuing.

Issue

The dispute concerned responsibility for delay and whether the construction contract could be cancelled because of slow progress.

Principle

The case demonstrates that a court must examine the actual causes of delay, including whether site conditions or actions attributable to the employer contributed to the delay.

Importance

Remember:

Delay → Identify cause → Identify responsible party → Determine contractual consequence. (lexismiddleeast.com)

Case 2 – Dubai Court of Cassation, Commercial Appeal No. 893/2017

Facts

A subcontractor claimed approximately AED 1.87 million for construction-related work on a hotel and residential project.

A jurisdictional objection based on an arbitration clause was raised.

Principle

The Dubai Court of Cassation held that a jurisdiction issue concerning arbitration could be independently appealed in the circumstances of the case and remitted the matter for reconsideration.

Importance

This case shows that dispute-resolution clauses can become a preliminary and decisive issue in construction litigation. (Dubai Culture)

Case 3 – Dubai Court of Cassation, Appeal No. 23/2021

Facts

The dispute involved contractual work and payment, with technical issues requiring an expert.

Principle

The Dubai Court of Cassation emphasised that the trial court has authority to evaluate evidence and expert reports and to determine whether each party performed its contractual obligations, provided the reasoning is supported by the record.

Importance

This is particularly useful for construction disputes because courts frequently rely on expert evidence concerning:

Quantity

Quality

Completion

Delay

Payment

Contract compliance. (Dubai Culture)

Case 4 – Dubai Court of Cassation, Case No. 51/2026

Facts

This recent case concerned three subcontracting agreements and a claim for approximately AED 4.69 million.

The subcontractor said that the work had been completed and accepted through completion certificates and that an outstanding balance remained.

The dispute also involved limitation, expert findings, delay penalties and set-off.

Principle

The case illustrates the importance of:

Completion certificates

Subcontract documentation

Expert calculations

Limitation

Delay claims

Set-off

Importance

It is a useful modern example of how a construction payment dispute can contain several interconnected legal issues. (lexismiddleeast.com)

Case 5 – Dubai Court of Cassation, Case No. 1402/2024

Facts

The dispute involved unpaid amounts under a subcontract/purchase-order relationship. The claimant relied on invoices and delivery documents showing receipt of the relevant materials/services.

Principle

The case considered whether the evidence supported the payment claim and whether an alleged arbitration clause was sufficient to prevent court litigation.

Importance

It demonstrates two common construction-dispute questions:

Was the work/material supplied?

and

Was the contractual dispute-resolution mechanism properly agreed? (lexismiddleeast.com)

Case 6 – Dubai Court of Cassation, Case No. 51/2026

Additional Construction-Law Importance

This case is particularly useful for understanding subcontractor claims.

The court considered the relationship between:

Contractual entitlement

Completion

Payment

Expert evidence

Delay penalties

Set-off

Limitation

Revision point

A contractor or subcontractor cannot simply prove:

"I performed work."

The dispute may require proof of:

Contract → Scope → Performance → Certification → Amount Due → Defences → Final Balance. (lexismiddleeast.com)

22. Important Construction Case-Law Principle

The cases demonstrate several recurring principles:

Principle 1 – Contract matters

The court starts with the construction contract and its documents.

Principle 2 – Delay requires causation

Simply proving that the project was late does not necessarily establish who is legally responsible.

Principle 3 – Experts are important

Technical questions frequently require expert analysis.

Principle 4 – Arbitration clauses must be read carefully

The exact wording can determine whether court proceedings remain available.

Principle 5 – Completion certificates matter

They can provide important evidence of performance and payment entitlement.

Principle 6 – Subcontractors must prove entitlement

Invoices alone may not answer questions concerning scope, completion, variations or set-off.

23. Current UAE Construction-Law Framework

For current disputes, remember these major instruments:

1. Civil Transactions Law

Federal Decree-Law No. 25 of 2025

Current central civil-law framework from 1 June 2026. Construction-contract provisions begin around Article 812. (lexismiddleeast.com)

2. Arbitration Law

Federal Law No. 6 of 2018

Relevant where the construction contract contains a valid arbitration agreement.

3. Evidence Law

Federal Decree-Law No. 35 of 2022

Relevant to proving contractual performance, delay, defects and payments.

4. Civil Procedure Code

Federal Decree-Law No. 42 of 2022

Relevant to court proceedings, appeals and enforcement.

5. Dubai Contracting Regulation

Dubai has also introduced Dubai Law No. 7 of 2025 concerning the Regulation of Contracting Activities, providing a dedicated regulatory framework for contracting activities in Dubai. (lexismiddleeast.com)

24. Simple Construction Dispute Problem

Facts

Developer A hires Contractor B to construct a building for AED 30 million.

Contract completion date:

31 December 2026

Actual completion:

30 June 2027

Developer claims:

"B owes delay damages."

Contractor replies:

"The developer gave drawings four months late."

Legal analysis

Step 1 – Check contract

What does the contract say about EOT and delay?

Step 2 – Check evidence

When were drawings actually provided?

Step 3 – Check causation

Did the late drawings actually delay the critical construction activities?

Step 4 – Check notices

Did B give contractual notices?

Step 5 – Calculate delay

How many days were attributable to each party?

Step 6 – Determine remedy

Possible EOT, damages, payment adjustment or other relief depending on the contract and law.

25. Construction Dispute Checklist

Before answering any construction-law problem, ask:

Contract

What contract was signed?

What law governs it?

Is there a FIDIC form?

What are the contractual procedures?

Delay

What was the original completion date?

What caused the delay?

Who was responsible?

Was EOT available?

Payment

What amount was agreed?

What was certified?

What was actually paid?

Is there a set-off?

Defects

What defect exists?

When was it discovered?

Who caused it?

What does the expert say?

Variations

Was additional work instructed?

Was it authorised?

What is its value?

Procedure

Court or arbitration?

What dispute-resolution clause applies?

Was the required notice given?

Remedy

Payment?

EOT?

Damages?

Repair?

Termination?

Declaration?

Enforcement?

26. Quick Exam Revision

Remember these 12 construction dispute topics:

Contract formation

Payment

Delay

Extension of time

Liquidated/delay damages

Defective work

Variations

Termination

Subcontractor claims

Expert evidence

Arbitration

Construction guarantees/defects liability

One-line formula

Construction Dispute = Contract + Work + Delay/Defect/Payment + Evidence + Expert + Causation + Remedy.

Final takeaway

The easiest way to understand a UAE construction dispute is to divide it into four questions:

What did the contract require?
What actually happened?
Who caused the problem?
What remedy follows?

For current UAE construction disputes, also remember the 1 June 2026 transition to Federal Decree-Law No. 25 of 2025, because older construction cases often refer to the repealed 1985 Civil Transactions Law and must be read in their historical statutory context. (lexismiddleeast.com)