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Continuing our series on similar legal considerations to doing business around the world, Gerard Moore and Bruno Savoie offer an update on the UAE.
Home to nearly 10 million people, the UAE provides perfect opportunities for foreign structure companies with an interest in real estate development, oil and fuel projects, infrastructure investment, and an overall economic expansion and prospects forged.
The UAE has the highest percentage in the world (99%) of its population fully vaccinated and has had few covid restrictions since 2020 that directly affect its structural industry. There are still some restrictions in Abu Dhabi, where testing will have to be carried out in normal periods to access public places, but there are none in Dubai.
The country is investing heavily in its infrastructure. In September 2021, to mark the nation’s 50th anniversary, the UAE government announced its “50 projects”, adding the £12. 1 billion Etihad rail programme. It is also investing in energy, with projects such as the 2050 Energy Strategy. the first country in the Gulf Cooperation Council region to dedicate itself to achieving carbon neutrality by 2050 and plans to spend £145 billion on renewable energy over the next 3 decades. There are also plans to invest £15. 7 billion in the Emirati housing programme in Dubai through 2041, which is expected to boost the well-established asset market.
Abu Dhabi Airport’s central terminal is an example of a recent £2700 million megaproject that is nearing completion as part of the Abu Dhabi government’s plan to increase the number of tourists visiting the UAE. There is a growing presence of Chinese traders in the UAE. , operating a wide variety of primary projects, adding Etihad Rail, the Hassyan coal-fired power plant and the Mohammed bin Rashid Solar Park.
The UAE has the most evolved arbitration formula in the region, with arbitration being the preferred mode of dispute resolution for construction. In the UAE, arbitrations can take place on land, such as in Dubai or Abu Dhabi, or in single zones such as Dubai International Financial Centre or Abu Dhabi Global Market. This applies at the level of enforcement of arbitral awards. While terrestrial civil courts operate in Arabic, offshore flexible zone courts operate according to the common law formula, hear instances in English and are noted as more favorable to arbitration and therefore preferable to foreign entrepreneurs.
>> Read also: Scale and ambition in the MENA region
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Dubai, one of the 10 most sensible arbitration seats in the world in 2021, surpassing well-known venues such as Vienna and Washington. The UAE’s most important arbitration establishment is the Dubai International Arbitration Centre, which recently underwent a major refurbishment aimed at modernising it and bringing more in line with other first-class arbitration establishments.
However, there are some key legal issues to be aware of. Awards rendered through arbitral tribunals would likely be set aside for reasons, adding when the award conflicts with UAE public policy. In addition, since some foreign contractors have had difficulty enforcing awards of court-based on land, i. e. in the case of a public entity, it might be preferable for the contract to provide that the seat of arbitration be located in an impartial jurisdiction outside the United Arab Emirates.
Contractors deserve to be aware of several vital features of UAE law regarding structure disputes. Mandatory situations prior to the graduation of arbitration (such as the need to provide notice of dispute or attempt a settlement) may be strictly enforced and therefore advisable to ensure compliance with all situations contrary to arbitration. Courts applying UAE law have the strength to adjust liquidated damage clauses, rather than awarding damages for the actual loss suffered, which can also, in theory, be higher or lower. Another key difference with the English law is the remedy of termination for convenience.
Ten-year liability is also a key feature of design contracts in the UAE, as in several other countries in the region. It refers to a 10-year liability imposed on contractors, engineers and architects under UAE law for any design intended to last 10 years. years or more. Ten-year liability is a “strict” liability for defects that affect the stability or protection of a design or for the total or partial collapse of the design, and the expected reimbursement to be paid can be incredibly high. know that, being a mandatory provision of the Civil Code of the United Arab Emirates, contractors cannot incur ten-year liability.
Finally, structured contracts stipulate that the applicable law shall be UAE law. Since the UAE is a civil law jurisdiction, it is imperative that foreign sellers are familiar with the main concepts of civil law, in specific intelligent religion, which plays a vital role. Underlying role in the interpretation of contractual obligations and rights, and which differs specifically in its scope from the narrower duty of intelligent religion under English law.
Gerard Moore is an older spouse and Bruno Savoie is a Dubai spouse of global law firm Mayer Brown.
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