Alternative Dispute Resolution in the UAE: Adjudication Analysis

This report analyzes adjudication as an alternative dispute resolution (ADR) method within the context of the UAE's construction industry. The study begins by defining adjudication and its place within the broader ADR framework, highlighting its function as a method for resolving disputes through a t...Read More

Running head: ADJUDICATION
ADJUDICATION
Name of the student
Name of the university
Author note

1ADJUDICATION
Introduction
Adjudication is the alternative method of dispute resolution. Therefore it is the procedure
of dispute resolution wherein the autonomous adjudicator settles the disagreement by facilitating
temporarily binding determining the contractual rights of parties that is followed by impartial
ascertainment of evidence and submission of parties. Disputes are unavoidable in the
construction industry because of the complicated character of the industry1. Arbitration is
considered as a unitary method for the resolution of the construction disagreement. Therefore the
main concern of the study is significant construction conflict surfer in the hands of litigation,
thus impacting the wastage of resources, materials, as well as project abandonment. The study
analyses the practice of the Alternative Dispute Resolution in the construction industry with the
view to suggests an enduring resolution to the issues that are determined2. The adjudication can
be designated as the formation of a contract by legislation Housing Grant Construction and
Regeneration Act, 1996.
1 SALEM, HANI LOTFI. The Adaptability of Adjudication in the UAE from the Perspective of Islamic Shariaa and
Civil law. Diss. The British University in Dubai (BUiD), 2015.
2 KHAN, HASEEB DAD. PROSPECTS OF MEDIATION AS AN ALTERNATIVE DISPUTE RESOLUTION
MECHANISM IN THE UAE CONSTRUCTION INDUSTRY. Diss. The British University in Dubai (BUiD), 2018.

2ADJUDICATION
A logical progression of ideas
The advantage of the statutory adjudication comprises of it facilitating the prompt and
inexpensive procedure of provisionally settling the payment dispute in the method, which is
biased for maintenance of cash flow or the subcontractors and contractors. The merit of the
contractual obligation is foremostly are limited cash and shorter time framework engaged in
appointing the autonomous third party impartial assessment of the contractual rights of the
distinct parties. Furthermore, as the procedure is described by the relevant agreement, the party
have dominion over the procedure involving the selection of adjudicator. The provisionally
binding dispute resolution though ultimately disputed, enabling the distinct parties to tackle
issues in the timely fashion at the time memories and evidence are fresh. Another advantage of
adjudication is the limited framework of the time period that is necessary to obtain a
determination of the dispute. The restricted time, as well as limited cost, correspondingly has
obvious benefit in the commercial contract in respect of the parties for those the high cost and
lengthy time of litigation or arbitration are undesirable interruptions from their transaction.
Therefore arbitration is regarded as the ultimate resort for resolution of disputes in the
construction industry due to its expenses and some other factors.
The drawback of the statutory adjudication is that it is applicable to the section of the
payment disagreement facilitates in statutes, in which the Victoria might exclude significant cost
concern as latent ground or variations conditions as the procedure concentrated on the
guaranteeing cash movement to the subcontractors and contractors it is not implicated too many
categories of the contractual disagreement as time extension. In addition to that, there are
restricted avenues for expansion of time for the procedure of adjudication that might be
inadequate for disagreement over the complicated and major claims. The short period of time

3ADJUDICATION
permitted for might be inadequate with respect to the complicated statutory as well as a factual
disagreement that needs careful contemplation of the major number of documents and evidence.
However, the resolution of the contractual dispute by implication of the adversarial approach as a
contemporary arbitration method was regarded in opposition to balancing of the harmonious
association in between the distinct parties. The adjudication is not suitable in case parties to
desire final or rule-oriented decision. DAB that is Dispute Adjudication Board is the unbiased as
well as an autonomous panel comprising of one or three individuals who are employed at the
initiation of the undertaking in addition to that facilitate decision on disputes3. The terms of the
contract provide rights as well as obligations of distinct parties in the agreement, disputes
impacting in the considerable dilution of the delays, efforts as well as the diversion of the capital.
The FIDIC contractual conditions involve the section for the consideration, submission as well as
resolution of the allegation as well as disagreement under different clauses. However, the parties
did not favor the addition of the DAB clause in the contract as it is there arise complication to
quantify the advantages of DAB in terms of cost. The process of DAB is the prophylactic
character; the deficit of the disputes might the casual observer pointed out the termination of the
board.
Nevertheless, the existence of the DAB generally acts as a catalyst for the optimum
determination as well as the cost-effective method of the raise concerns that evolve in the
construction site. It has been indicated by some commentators that DAB complements another
layer to the procedure of dispute resolution unnecessarily4. That led to the delay procedure for
3 Zeidan, Alaa Husni. "ADR’s Effectiveness in UAE, Is it worth it to take the Time?." (2015).
4 Morris, Terence Anthony. "THE ADMINISTRATION OF CONTRACTUAL DELAY AND DISPUTE
RESOLUTION IN THE UAE." (2015).

4ADJUDICATION
the ultimate dispute resolution. The significant criticism that has been encountered by DAB as
the procedure for resolution of dispute is the apparent deficit of enforceability. In the majority of
the jurisdiction, the procedure of adjudication is regarded as non-statutory.
Smooth transition
In the FIDIC manner, the procedure of DAB is contractual. Hence any miscarries to carry
out the procedure resulting in the violation of the contract. The parties facilitated with several
options in contract for tackling with the decisions that are produced by DAB. It has been
revealed from experience that in the cases, the decision has not been executed in entirety at the
time of undertaking that is formed on the basis of the negotiated settlement. Furthermore, the
procedure of DAB, along with the procedure of Alternative Dispute Resolution, are novel and
might be regarded by some commentators as experimental. In real practice, the procedure of
DAB facilitates readily obtainable regarding the advice on dispute resolution on a continuous
basis. The DAB does nor supplants the authority or responsibility of the decision making of
parties; however, it can provide decision making. In addition to that, it has been noted that when
the undertaking engages several layers as supplier agreement, consultant agreement, nominated
agreement of sub-contractors, as well as the contractor’s subcontractor, the multi-layered DAB
might be regarded as advantageous. However, the administrative and procedural issue is inherent
in the structure, especially with consideration to the admissibility and confidentiality5.
Nevertheless, the enhanced procedure of dispute resolution might outweigh complications in
creating as well as running the system. Another cause that influences towards non-inclusion of
5 SALEM, HANI LOTFI. The Adaptability of Adjudication in the UAE from the Perspective of Islamic Shariaa and
Civil law. Diss. The British University in Dubai (BUiD), 2015.

5ADJUDICATION
DAB provision is sworn testimony and limited discovery, as well as the deficit of the cross-
examination at the time of informal hearings causes crisis to the procedure.
The alternative method of resolution of the dispute that is arising out of construction
projects is uncommon in the United Arab Emirates. Nevertheless, there exists an emerging trend
in the construction undertaking to facilitate adjudication or creation of the dispute
reconsideration board as the method for speedier resolution of the disagreement during the
continuation of the project. The other method of expert determination might be implemented;
however, the same is generally reserved in respect of discrete or minor concerns and do not
substitute litigation or arbitration as the final method of the resolution of a dispute. Arbitration
and litigation are common mechanisms concerning the settlement of disagreement in UAE.
Analysis
The significant proportion of the construction disputes settled through the procedure of
arbitration in the arbitral institution. There is no court in UAE which has been designed for the
construction contracts. In general, the dispute evolving from the construction project is resolved
by the civil court by the appointment of an expert to analyses the technical and factual issues6.
The contractual parties in Dubai may approve to place to the court jurisdiction of the Dubai
International Finance Centre. Nonetheless, the particular court is treated as a commercial court,
and thus it is unclear as to how the court addresses the issues of the technical or specialist
character as the complicated construction projects. Another issue involved is whether the
construction project selects the DIFC court over the conventional method of arbitration. The
6 Dimitropoulos, Georgios. "National Sovereignty and International Investment Law: Sovereignty Reassertion and
Prospects of Reform." The Journal of World Investment & Trade 21.1 (2020): 71-103.

6ADJUDICATION
remarkable national organization in respect of the construction arbitration in UAE is the Dubai
International Arbitration Centre, Abu Dhabi Chamber of Commerce. Nevertheless, the
construction contracts facilitate arbitration under the regulation of Arbitration in International
Chamber of Commerce7. The government institution such as Dubai Roads and Transport
Authority and DM have their rules of arbitration that anticipated to be involved in the
agreements. Therefore though not particularly connected to projects or construction, there exist
contemporary expansion of the jurisdiction of Dubai International Financial Centre courts
enhancing the forum that is available to the construction seeking for the resolution of the dispute.
The further progress in the particular field suggested legislation of federal arbitration that
regulating the arbitration onshore in UAE. The legislation is in draft manner, however,
anticipated to be bought in action in the future.
The resolution of dispute is demarcated in the procedure of ultimate determination such
as litigation and arbitration as well as procedure of primary determination such as conciliation,
mediation, adjudication, as well as dispute panel or boards8. The procedure of adjudication is
designated as the process by which the appointed impartial and neutral party is delivered to adopt
the attempt in assessing the fact as well as legislation concerning the construction dispute in
addition to that to arrive at a decision within the specified time framework9. It has been stated by
Lord Ackner that the process of adjudication is an extremely satisfying process that comes under
7 Romano, Cesare PR. "Mirage in the Desert: Regional Judicialization in the Arab World." (2018): 169-190.
8 Schwieder, Robert W. "TTIP and the Investment Court System: A New (and Improved) Paradigm for Investor-
State Adjudication." Colum. J. Transnat'l L. 55 (2016): 178.
9 Albakeri, Faris. Establishing safe havens: a comparative study between the UK and the UAE of the infrastructure
for improving the reporting and detection of rape against women. Diss. UCL (University College London), 2019.

7ADJUDICATION
the relative rubric “pay now argue later” that is a sensible method of tackling relatively
inexpensively and expeditiously in respect of disagreement that may hold significant agreements.
The significant demarcation between other forms of Alternative Dispute Resolution and
Arbitration is that impacting the decision that is binding even though the other party to the
contract does not comply voluntarily. The aim of the statutory adjudication is to enhance the
movement of cash as well as create the efficient and speedy process of dispute resolution that is
grounded on the norm of “pay now, argue later” or the norm of payment security for the purpose
of safeguarding the cash flow of the contractor. Furthermore, the procedure of adjudication is
comparatively less expensive than that of litigation or arbitration. The most important progress in
the process for the avoidance of dispute under a global construction contract in the contemporary
period has been initiated by the adjudication board or dispute review to settle disagreement
instead of arbitration or litigation. Dispute adjudication board in UAE was the deficit of the
statutory legislation in addition to that the decision is not enforceable and final10.
Conclusion
Therefore for the above-mentioned reason majority of the participant advocated the
method of the statutory adjudication that is initiate in UAE. The impact and cause of
disagreement in its essence under the construction contract of UAE can be discourse by the
respondents in support of DAB as a fundamental mechanism of the dispute resolution in regard
to the construction industry in UAE. The global financing institution as IMF, JICA, and Islamic
10 Almeida, Paula Wojcikiewicz, and Gabriela Hühne Porto. "Is International Adjudication a Global Public Good?
Procedure vs. GPG before the ICJ." Revista de Direito da Cidade 11.1 (2019): 597-620.

8ADJUDICATION
Development Bank promotes the usage of the standing board of dispute at the time of backing
the large scale project of construction.
Bibliography
SALEM, HANI LOTFI. The Adaptability of Adjudication in the UAE from the Perspective of
Islamic Shariaa and Civil law. Diss. The British University in Dubai (BUiD), 2015.
KHAN, HASEEB DAD. PROSPECTS OF MEDIATION AS AN ALTERNATIVE DISPUTE
RESOLUTION MECHANISM IN THE UAE CONSTRUCTION INDUSTRY. Diss. The British
University in Dubai (BUiD), 2018.
Zeidan, Alaa Husni. "ADR’s Effectiveness in UAE, Is it worth it to take the Time?." (2015).

9ADJUDICATION
Morris, Terence Anthony. "THE ADMINISTRATION OF CONTRACTUAL DELAY AND
DISPUTE RESOLUTION IN THE UAE." (2015).
SALEM, HANI LOTFI. The Adaptability of Adjudication in the UAE from the Perspective of
Islamic Shariaa and Civil law. Diss. The British University in Dubai (BUiD), 2015.
Dimitropoulos, Georgios. "National Sovereignty and International Investment Law: Sovereignty
Reassertion and Prospects of Reform." The Journal of World Investment & Trade 21.1 (2020):
71-103.
Romano, Cesare PR. "Mirage in the Desert: Regional Judicialization in the Arab World." (2018):
169-190.
Albakeri, Faris. Establishing safe havens: a comparative study between the UK and the UAE of
the infrastructure for improving the reporting and detection of rape against women. Diss. UCL
(University College London), 2019.
Almeida, Paula Wojcikiewicz, and Gabriela Hühne Porto. "Is International Adjudication a
Global Public Good? Procedure vs. GPG before the ICJ." Revista de Direito da Cidade 11.1
(2019): 597-620.
Schwieder, Robert W. "TTIP and the Investment Court System: A New (and Improved)
Paradigm for Investor-State Adjudication." Colum. J. Transnat'l L. 55 (2016): 178.