What’s fair is fair

As you fly in to Dubai, you can see quite plainly what all the fuss is about. There are thousands of tower cranes littering the skyline, hundreds of dredgers shifting sand into reclamations offshore, swaths of motorways being built or widened, row upon row of partly built tower blocks and, as you touch down, an airport terminal under construction. The five-star hotels are legion. As the oil and gas run out, big efforts are being made to make this rich country into a commercial and tourist centre.

This amount of work attracts large numbers of international organisations and people. Inevitably, British contractors and specialist trades have joined in the rush to seek work. British consultants, in particular engineers, quantity surveyors and estate agents, have been much in demand. Numerous organisations have set up offices in Dubai.

Of course, the enormous level of development also brings in the lawyers. Many British solicitors have set up branches sometimes in conjunction with lawyers from the United Arab Emirates (UAE). Even the odd barrister has been known to turn up there.

Questions are often asked as to what the system of law is and whether the means of dispute resolution are reliable. Although Dubai has its own judicial system (separate from the UAE), its legal systems are increasingly modern, although Sharia law is a major source for it. There are laws requiring the licensing of activities including construction. Joint ventures are permitted, with some restrictions. Limited liability companies are allowed.

The law relating to construction contracts is on any final comparative analysis, and in practice, not seriously dissimilar from the UK common law. I employ you to build a block of flats for a determined or determinable price to a certain specification by a certain time: either of us will be in breach of contract if we do not do what the contract requires. I can be sued if I do not pay what the contract requires me to pay and I can recover compensation if you do not perform on time or to specification. Statutory requirements such as those relating to health and safety may be drafted differently, and with different emphases, but are comprehensible.

Dispute resolution is an area where there have been efforts to update the legal systems. Previously, the courts of Dubai had been regarded by some as over-procedural and legalistic with proceedings sometimes becoming unduly protracted. Recently, however, an International Financial Centre Court has been set up in Dubai to deal with financial disputes under the chairmanship of Sir Anthony Evans, the former English appeal court judge.

Development brings in lawyers. Many British solicitors have set up branches. Even the odd barrister has turned up

The preferred dispute resolution is ultimately arbitration. The UAE recently ratified the New York Convention regarding the enforcement of international arbitral awards; when this comes into force, it is hoped by most practitioners that the courts will feel discouraged from reviewing the merits of any given award.

The Dubai International Arbitration Centre (DIAC), which was set up and is run with the assistance of some eminent international legal academics and practitioners, has devised Rules of Commercial Conciliation and Arbitration, which are being regularly incorporated into Dubai construction contracts.

They form a comprehensive code for the conduct of Dubai arbitrations, but they still leave the arbitrators with useful and substantial powers. There is some hope that there will be changes to practices such as the generally perceived need for Dubai awards to be physically signed by arbitrators in Dubai itself.

There is also a perceived tension between the Arbitration Statute and the DIAC Rules. Sharia law and (in so far as is different) Dubai law allow the parties to a contract considerable autonomy as to what they agree; the laws will enforce the contract subject to any vitiating factor such as fraud, illegallity or duress.

There are high economic hopes for Dubai as well as keenness to provide a modern legal system that will support and encourage foreign interest.