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Overview: Basis of claims in the construction industry in the UAE

Published on : 06 Oct 2021

Basis of claims in the construction industry in the UAE

Disputes are widespread in the construction sector. Disputes develop owing to conflicts between any of the parties to the contract. Disputes may be detrimental to construction projects, causing enormous costs, disruptions, & reduced productivity. To execute a construction project on schedule and within budget, it is critical to understand the reasons for disagreements. Construction disputes have an influence on project goals& strain relations amongst parties to the contract. A construction conflict is seen as a hindrance to the effective execution of the project. Disputes are time-consuming, disagreeable, and costly & the workflow is disrupted by conflicts, as a result of which there will be higher expenditures, delays, and other undesirable consequences. These issues may result in construction lawsuits and conflicts.

  • Disputes Concerning Designers

If there is not enough time to develop, the proposal/design might lose exact elements & precision. Poorly designed situations happen whenever a layout is unusable, contains missing pieces, and fails to suit users' needs. Poor & insufficient technical planning & requirements may lead to building bottlenecks. Alteration in material conditions and the following approval procedure may take time & may result in disagreements over the higher price of the new materials and delays due to shipment and trouble obtaining the equipment. All of this costs the owner and designer money, which leads to disagreements. 

  • Ownership Disputes

One of the most prevalent reasons for disagreements is the owner's sluggish decision-making progress. The owner spends a long time making decisions, causing the development time to be delayed. Inadequate project planning leads to disagreements and higher costs for the owner. To minimize disagreements and excessive expenditures, careful early preparation is essential. Owners' failure to issue interim awards on-time extension & payment is a regular practice. This might lead to even more difficult-to-resolve disagreements at the end of the project.

Leaving conflicts till the conclusion of the project makes them more difficult and expensive to resolve. Owners may seek changes such as adding or subtracting from the previously agreed-upon scope, leading to disagreements & disputes because specific changes may result in more time and money. If the owner is unable to fund the project on time, the development will be delayed, and the project may be halted for a period of time until the owner is ready to finance the project, resulting in disputes. 

  • Disputes Concerning Contractors

Inadequate contractor funding during construction causes delays, job interruptions, and poor quality of subcontractors' work. If the contractor is short on labor, the construction process is delayed, leading to disagreements. Low productivity might result in conflict. Inadequate site inspection might lead to a slew of disagreements. A sort of contractor conflict is a poorly specified scope of work. Accidents and delays in the construction phase might occur due to the contractor's poor monitoring & project execution. The contractor's site management is a crucial issue in construction conflicts. Similarly, an improper leadership style from the construction/project manager occurs when an inept individual with insufficient credentials is in charge of construction/project management, making poor judgments throughout construction. Contractors may be requested to halt the construction process if they cannot continue making progress on the project. 

  • .Contractual Disputes

A poorly worded contract leads to diverse interpretations of the same issue, leading to an argument, eventually leading to a disagreement. Furthermore, differential site conditions are regarded as a contractual conflict. This occurs when the contractor discovers unexpected physical circumstances of an unusual character that differ considerably from those commonly experienced and widely acknowledged as inherent in the work at the project's site. The most common basis for claims is different site circumstances. When the parties desire to change the terms of a preexisting signed contract, they employ contract modifications. When there is contradictory and faulty information in the contract document, the contract must be highly accurate and updated before an agreement between the parties is reached. The contract's words should not contradict the scope of work and should be adequately discussed between the parties. 

  • Other Disputes

Other reasons would include the- 

  1. Orders for Change or Variation
  2. Owner-caused delay
  3. Owner's oral alteration instructions
  4. Owner's payment delay
  5. Contract price is low owing to great competition.
  6. Variations in material and labor prices
  7. Personality of the owner
  8. Quantity variations
  9. Issues with subcontracting
  10. Contractor's delay 
  11. Contractor's lack of organization
  12. Financial issues with the contractor
  13. Poor workmanship by the contractor

Similarly, inclement weather can create delays and cost overruns, which can lead to disagreements. The absence of coordination and communication among both parties during construction causes conflict and uncertainty of the scope of the project, so this creates social conflicts.

  • Settlement Methods To Resolve Claims 
  1. Bargaining and deliberation

Discussions between conflicting parties, typically the owner's agent & the contractor, may help resolve a dispute swiftly. Landlords frequently devote extensive time to researching charges, and any corrective action is frequently delayed. If no agreement is achieved, the case is moved out of the conversational participants' control & referred to alternative dispute resolution like arbitration & mediation.

  1. Mediation

The disputing parties can resolve the dispute through the use of mediators if negotiations feel. Attempts are made to find a solution to solve the disagreement. The mediator's function is to bring opposing sides to a common agreeable point. He/she can elucidate and explain the points of contention, which enables each party to grasp the other party's stance. He/she could also give ideas & sometimes even offer a final settlement. 

On the other hand, the mediator lacks the authority to make a final, binding judgment. As a result, disputing parties are not obligated to accept the mediator's conclusion.

  1. Arbitration

The conflicting parties may resort to arbitration If parties are unable to settle the dispute through mediation or dialogue. Even though the parties are hesitant to employ the process of arbitration to settle conflicts, it often is an inescapable option. Following the appointment of an arbitrator, each party attempts to persuade the arbitrator of the validity of his/her stance, & the session is not concluded until each party has had a complete chance to state their case. Following the session, the arbitrator renders a final & enforceable arbitral award.

  1. Litigation

If the disputants have not settled on the arbitrators if one or more arbitrators opted to refrain from the task, nor if there was an impediment to proceeding with it and there was no agreement between the parties in this respect, the parties may move to court. Although disagreeing parties dislike going to court to settle their differences, it may be their only and ultimate option. A decision, in this case, is final and binding, and it cannot be appealed. 


At present, the UAE is one of the most vibrant countries in the construction sector. In terms of the construction business, the UAE is now one of the most dynamic countries. As a result, it is dealing with a slew of challenges, including many building conflicts. In terms of frequency of occurrence, this report examines the primary reasons for disagreements in the UAE. Furthermore, the report analyzes the critical disagreement avoidance and resolution approaches and compares their efficacy. Based on their origin, the disputes are split into five distinct groupings. There are five of them: owner, contractor, design, contractual, & others. Owner-related issues are shown to be the most prevalent since changes and adjustments in the scope of the project and the time it takes them to make choices frequently constitute reasons for conflict. Mitigation strategies are explored in three stages of a building project depending on their suitability and efficacy. There are three of them: early resolution, late resolution & avoidance.


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