The number of property and construction disputes heard at the Dubai International Arbitration Centre (DIAC) more than doubled last year as the financial crisis took hold.
The centre handled 206 cases last year arising from the property and construction sectors, compared with 100 in 2008.
Of last year's disputes, 126 were property-related and principally between large commercial investors and developers of overdue projects. The remaining 80 cases were from the construction sector.
DIAC's workload is expected to increase further this year as the fallout from the financial crisis continues to be felt, said Fathi Kemicha, an executive committee member at DIAC, which is part of the Dubai Chamber of Commerce and Industry. "The latest indications are that it will not slow," he said. "On the contrary, when you have a crisis, there are more disputes."
Meanwhile, DIAC also handled 81 cases last year that revolved around "breaches in commercial contracts" across all sectors, while just five cases related to the insurance and shipping sectors.
Arbitration is a legal process in which disputes are resolved by a third party without recourse to litigation, which can be expensive and time-consuming.
"You don't need to go to court if you have an enforcement of a decision from DIAC," Mr Kemicha said. "The final award is final and that's it."
Most of the property disputes involved late or non-delivery of projects, while contractors were chasing compensation for cancelled projects or late payments from developers. Other cases involved subcontractors seeking payments from main contractors.
A slowdown in the emirate's formerly thriving construction sector since the onset of the economic downturn has led to the rise in disputes.
About 240 projects have been cancelled or are indefinitely on hold in Dubai, according to Proleads, an industry auditing company based in the emirate.
A construction lawyer in Dubai, who asked not to be named, said most of the disputes were caused by a "lack of attention" to contract details when they were signed, mainly because developers and contractors were "caught up in the boom".
One of the biggest cases to emerge last year was between Arabtec Holding, the UAE's largest construction company, and Meydan Group, the developer behind the Meydan Racecourse in Dubai.
Arabtec and its joint-venture partner, Malaysia's WCT Engineering, are seeking Dh1.6bn (US$435.5 million) in compensation after a Dh4.77bn deal to build the recently opened racecourse was cancelled half-way through construction in January last year. Arbitration continues in the case.
Over the past year, DIAC has had to hire more legal experts to handle the backlog of cases and is seeking more experts, added Mr Kemicha. "We handle some huge cases and you need to have experienced arbitrators."
Law firms have also seen a rise in demand for their services over the past year, although the number of construction-related cases has fallen slightly in recent months, said Philip Punwar, a partner at Fulbright and Jaworski in Dubai. "Things have settled down a bit," he said.
"I think people have overcome the shock at the onset of the financial crisis and many have worked out some way forward for themselves. Companies are also reluctant to commit their resources to arbitration and hope they can reach an amicable solution."
Meanwhile, he said, disputes between investors in property and developers of projects that are late currently make up the largest number of cases.
"It's mainly for commercial property, say an investor who bought 15 units in a building that is way beyond schedule. But every now and then you will come across a case that might be about a single villa, for example."
@Email:agiuffrida@thenational.ae
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
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AT4 Ultimate, as tested
Engine: 6.2-litre V8
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How green is the expo nursery?
Some 400,000 shrubs and 13,000 trees in the on-site nursery
An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo
Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery
Approximately 340 species of shrubs and trees selected for diverse landscape
The nursery team works exclusively with organic fertilisers and pesticides
All shrubs and trees supplied by Dubai Municipality
Most sourced from farms, nurseries across the country
Plants and trees are re-potted when they arrive at nursery to give them room to grow
Some mature trees are in open areas or planted within the expo site
Green waste is recycled as compost
Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs
Construction workforce peaked at 40,000 workers
About 65,000 people have signed up to volunteer
Main themes of expo is ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.
Expo 2020 Dubai to open in October 2020 and run for six months
The specs
Engine: Four electric motors, one at each wheel
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The%20specs
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THE BIO
Favourite place to go to in the UAE: The desert sand dunes, just after some rain
Who inspires you: Anybody with new and smart ideas, challenging questions, an open mind and a positive attitude
Where would you like to retire: Most probably in my home country, Hungary, but with frequent returns to the UAE
Favorite book: A book by Transilvanian author, Albert Wass, entitled ‘Sword and Reap’ (Kard es Kasza) - not really known internationally
Favourite subjects in school: Mathematics and science
Zayed Sustainability Prize
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
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- Specialist robotics and science laboratories
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- Disruption Lab and Research Centre for developing entrepreneurial skills
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
NO OTHER LAND
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In numbers: PKK’s money network in Europe
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Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
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Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Company%20Profile
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