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Disputes Arising from Delayed Approvals in Construction

One of the critical aspects of any construction project is obtaining approvals and permits from relevant authorities. Well, delays in approvals can significantly impact project schedules, leading to disputes between parties involved. 

Fear not, as we stand ready to assist you! Delve into our insightful legal blog, where we meticulously unravel the intricate challenges brought about by delayed approvals in construction. Navigate the nuances of construction law with us.

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Understanding Delayed Approvals

In the construction industry, time is money. Delays in project approvals can result from various factors, including bureaucratic procedures, changes in regulations, or unforeseen circumstances. Such delays can have cascading effects, affecting project timelines, costs, and ultimately, the relationships between stakeholders.

Legal Framework in the UAE

The legal framework in the UAE provides some key provisions that can be invoked in disputes related to delayed approvals:

1. UAE Civil Code: While UAE legislation doesn’t specifically address delayed approvals, certain provisions can be used:

Article 290: This article permits judges to reduce obligations if one party contributed to the harm. It allows for the assessment of causative factors in delays, as illustrated in a recent Dubai Court judgment (Case No. 673 of 2021, Court of Cassation), where a developer’s delay in obtaining approvals was deemed a breach of contractual obligations.

    – Article 291: Article 291 assigns liability in proportion to the parties’ share in harmful acts. This can be relevant when determining responsibility for delays, as demonstrated in another case (Case No. 105 of 2013, Court of Cassation), where the court scrutinized the developer’s conduct to ascertain the causes of delays.

2. Good Faith Principle: Article 246(1) of the Civil Code requires contracts to be performed in good faith. This principle allows for fairness and common-sense considerations when dealing with concurrent delays related to approvals.

3. Unlawful Exercise of Rights: Article 106 of the Civil Code can be invoked to prevent the unlawful exercise of rights. For example, if a party applies liquidated damages when it contributed to delays due to approvals, it might be considered an unlawful exercise of rights, as discussed in the context of delayed approvals in the UAE.

4. Prohibition Against Unjust Enrichment: Article 318 can be used to argue against compensation for concurrent delays that lead to unjust enrichment, as evidenced in various construction contract disputes within the UAE.

Evidence & Contractual Terms

Typically, parties hire delay experts who present their preferred analysis. In arbitration, tribunals decide the preferred analysis method, while UAE courts appoint court experts to assess the situation independently.

In the UAE, parties enjoy freedom of contract, provided it complies with the law and public order. Contracts may specify which party assumes the risk of concurrent delays. Clarity in contract terms is essential to minimize disputes.

Managing Approval Delays 

It’s crucial to outline best practices for managing approval delays in construction projects. To navigate these challenges effectively, parties should consider the following:

1. Thorough Pre-Contractual Planning: As emphasized by the UAE courts, comprehensive pre-contractual planning is paramount. Parties should invest time in understanding the regulatory requirements, potential approval processes, and timelines before entering into a construction contract. This proactive approach can help prevent disputes related to delayed approvals.

2. Clear and Explicit Contractual Terms: The importance of clear contractual terms cannot be overstated. Contracts should address potential delays explicitly and provide mechanisms for dealing with them. This includes specifying responsibilities for obtaining approvals, defining reasonable timelines, and establishing procedures for handling delays.

3. Documentation and Evidence: Proper documentation is a cornerstone of resolving disputes effectively. Parties should maintain meticulous records of all communication, approvals, and changes throughout the project. This documentation can serve as critical evidence in case disputes arise, helping parties substantiate their claims.

4. Dispute Avoidance Strategies: While disputes can be costly and time-consuming, dispute avoidance strategies can play a pivotal role. Negotiation, mediation, or alternative dispute resolution methods can be employed to resolve issues amicably before they escalate to legal proceedings. Engaging in open dialogue and cooperation can often lead to quicker and more satisfactory solutions for all parties involved.

5. Legal Consultation and Expert Analysis: When facing complex approval delay disputes, seeking legal consultation is advisable. Additionally, expert analysis, as seen in the UAE court judgments, can be invaluable in assessing the causes and impacts of delays objectively.

In an industry where time and efficiency are paramount, taking these steps can make a substantial difference in the successful completion of construction projects in the UAE.

For more guidance tailored to your specific situation, you can reach out to legal consultants in Dubai. Top law firms in Dubai can help you in resolving your issues and being in compliance with the construction laws and regulations