L to R: Cheryl Cairns, head of international construction practice and Karie Akeelah, partner in construction disputes practice at Trowers & Hamlins, both based in Dubai/Image: Supplied
As mega projects continue to reshape the skylines of the Gulf, legal experts are sounding the alarm on a parallel surge: a rise in complex international construction disputes.
“Projects in the Middle East tend to involve significant costs, multiple stakeholders and new technologies, with highly compressed timelines,” says Cheryl Cairns, head of international construction practice at Trowers & Hamlins. “Given the scale and complexity of mega projects in the region, there is an increased risk of misalignment in work scopes, timelines and responsibilities—all of which can ultimately give rise to disputes.”
According to Cairns, delay and prolongation cost claims are common, often resulting from unclear contracts or improper contract management. She also notes that “drastic and expensive changes in scope of work post-tender” remain a recurring issue.
The cross-border complexity of mega projects
With stakeholders from multiple jurisdictions involved in a single project, resolving disputes becomes a legal balancing act.
Karie Akeelah, a partner in the firm’s construction disputes practice, explains: “Stakeholders from different jurisdictions can have different dispute resolution preferences and legal backgrounds, which add to the complexity of resolving disputes. To ensure neutrality and flexibility, arbitration remains the preferred mode for dispute resolution.”
However, Akeelah warns that arbitration clauses must be drafted with precision. “Where the arbitration clause is broad, there may be situations where a key party relevant to the dispute cannot be joined to the arbitration—or worse, where it is later discovered that a key party did not have capacity to arbitrate.”
She recommends early stakeholder mapping and the inclusion of joinder and consolidation clauses to streamline multiparty proceedings.
Enforcement challenges under the New York Convention
All GCC countries are signatories to the New York Convention, which requires them to enforce foreign arbitral awards. But enforcement isn’t always straightforward.
“Implementation in the region can be challenging due to localised procedural requirements, legal culture and a broad interpretation of ‘public policy’ in some GCC jurisdictions,” says Cairns. “Arbitral awards must not conflict with Sharia principles, existing laws or prior judicial decisions.”
She adds that while there’s a trend toward a narrower application of public policy, enforcement delays remain a risk—making strategic legal navigation essential.
Managing third-party risk in arbitration
One grey area that continues to trip up firms is the involvement of non-signatory third parties in disputes.
“Express and clear contract drafting is key to limiting this risk,” says Akeelah. “Where arbitration clauses are limited, construction firms can consider relying on other legal principles which may bind non-signatories,” including agency, assignment, estoppel, and chain of contracts.
These legal routes are less developed in civil law systems, she says, but principles such as good faith and non-contradictory conduct can provide similar pathways, subject to proper legal advice.
Enforcement strategies in the UAE’s dual legal systems
The UAE offers a unique legal environment for enforcing arbitral awards, with both onshore (civil law) and offshore (common law) systems.
“When enforcing an arbitral award (local or foreign), companies should evaluate the legal frameworks of both onshore and offshore jurisdictions, along with any applicable reciprocal treaties or agreements,” says Cairns. “From a practical point of view, in most cases a party will want to pursue enforcement proceedings before the courts where the assets of the award debtor are located.”
Cairns notes that onshore courts have become increasingly pro-enforcement, especially following the implementation of UAE Federal Law No. 6 of 2018. But procedural awareness remains critical, she says: “It is important for companies to be aware of the applicable procedural timelines and available grounds for challenging enforcement.”
Read: ADGM Courts introduces pro bono mediators panel to support dispute resolution
Drafting smarter contracts to avoid future disputes
Poor planning during the contract phase can lead to years of legal wrangling later. Akeelah advises construction and infrastructure firms to do their due diligence upfront:
- Research relevant jurisdictions before signing
- Draft clear jurisdiction and governing law clauses
- Include multi-tiered dispute resolution mechanisms such as mediation or expert determination
“Such clauses provide a degree of certainty about where and how a party can sue and be sued, thus reducing the risk of parallel proceedings,” she explains.
Preparing for the next wave of construction disputes
To stay ahead of the curve, Cairns recommends proactive dispute avoidance strategies, including:
- Legally sound, comprehensive contract documentation
- Strong project management and stakeholder communication
- Keeping clear digital records for future evidence
- Using legal advisors early to identify risk and conduct merit assessments
- Training teams on notice periods, escalation procedures, and conflict resolution protocols
She also highlights the growing potential of generative AI tools for preparing construction claims: “A key advantage of generative AI is the ability to interpret a user’s queries by machine-reading a collection of documents and creating meaningful outputs such as summaries, outlines, and even first-draft documents.”
To learn more about the application of AI to dispute resolution, here is a recent article by Trowers & Hamlins covering this topic
Growing role of mediation in the UAE and beyond
The UAE is increasingly encouraging out-of-court settlements. “There is an increasing ‘pro-mediation’ approach in the UAE, with recent legislative developments and adoption of government initiatives encouraging mediation,” says Akeelah.
Recent milestones include:
- Federal Decree Law No. 40 of 2023 regulating mediation procedures
- Wasata, an e-mediation platform launched by the Ministry of Justice
- Mandatory mediation training for lawyers by Dubai Legal Affairs Department
Dispute boards are also gaining traction. “A 2024 King’s College London study highlighted their global effectiveness, strong party compliance, and growing calls for an international enforcement framework,” Akeelah notes.
With the construction boom continuing across the Middle East, the region’s legal frameworks are evolving but so are the risks. For contractors, developers, and project owners, the message is clear: legal preparedness and strategic contract design are now as critical as engineering precision or on-time delivery.
