Adjudication In The Middle East

Author:Mr Nicholas Gould
Profession:Fenwick Elliott LLP

Adjudication is now a dispute resolution process that most in the UK construction industry are familiar with. The process was introduced by the Housing Grants, Construction and Regeneration Act 1996, which became effective from May 1998. We have therefore lived with it for almost 15 years. Adjudication is included in all of the standard form contracts, but in any event will be implied, as we all now know, into any contract that meets with the definition of "construction contract" under the Act.

Other common law countries have followed suit. All of the states in Australia now have security of payment legislation, which introduces a right to adjudication. New Zealand is the same. Singapore also introduced a Security of Payment Act which provides for adjudication. Malaysia introduced a similar Act providing for adjudication in June 2013, and it is due to be in force soon. Other countries have considered similar legislation. The mechanics of the legislation varies between countries and states, but they all share the desire to provide a rapid, binding dispute resolution procedure.

The situation in the Middle East is somewhat different. There has been considerable construction work in that region for many years. The wealth created by oil has led to increasing levels of development throughout the region. Dubai is perhaps the best known for its substantive impressive developments such as The Palm and The Burj Khalifa Tower. Despite a slowdown of construction activity 4 years ago, as a result of the economic crisis, Dubai has continued to grow. The Dubai Theme Park is now under way, along with many other substantial developments.

Dispute resolution in the region and in Dubai has provided some challenges. The local courts have been unfamiliar with complex construction contracts, and local employers have not always been keen to agree to use international arbitration. International arbitration is of course widely used throughout the world for substantial projects involving suppliers and contractors from countries other than the one where the work is taking place. Nonetheless, Dubai has a regional arbitration centre in the form of the Dubai International Arbitration Centre (DIAC) and also the Dubai International Financial Centre (DIFC). Egypt has for some time had an arbitration centre in Cairo, and now Qatar also has the Qatar International Centre for Conciliation and Arbitration (QICCA). However, international arbitration can be time-consuming and...

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