Dissertation Proposal Example: UK and UAE Construction Law

Date:  2021-04-06 23:10:40
7 pages  (1766 words)
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University/College: 
George Washington University
Type of paper: 
Dissertation
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This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

I think a possible research question might be: What are the Payment and Uncustomary Liabilities in UAE Construction Law in Comparison to English Construction Law?

The purpose of this dissertation is:

The research aims at determining how the uncustomary and payment liabilities under UAE construction law can be improved while referencing the UK construction law. For this reason, the purpose of the research is to investigate the payment and uncustomary liabilities encountered under UAE construction law, and how these liabilities have been dealt with under the U.K. construction law. For this reason, the research focusses on investigating the ineffectiveness of UAE construction law, as well as highlighting the various problems that are encountered in UAE construction projects that are related to the construction law in the country. In addition, the research will also investigate why the UK construction projects are effective while considering the effectiveness of the English law in eliminating payment and uncustomary liabilities. In consequence, the research will recommend various actions that can be adopted in eliminating these construction liabilities, including amending UAE construction laws and acts.

As such, the study aims at examining the UAE construction law and judicial system, and thus, it will consider UAE case law in relation to construction projects in the country. It will also investigate how the uncustomary liabilities can be enhanced under, and in particular, under the UAE law in relation to the UK Act. The research will also aim at determining a statutory payment mechanism that can be employed in overcoming contract shortness in UAE. In light of this purpose, the study will determine the uncustomary liabilities under the UAE law and examine the provision of payments under the UAE construction law. In addition, the study will thoroughly examine the Law and its amendment in relation to the English law, as well as assess the issues that can be borrowed from the UK Act and be introduced into the UAE legislation. Therefore, the study aims at improving the construction law in UAE by surfacing various shortcomings that are related to payment and uncustomary liabilities. Furthermore, the research will examine the UAE construction Act and its amendments by the New Act as well as assess what can be incorporated in the New Act for introducing better legislations similar to those of the UK construction Act.

The three references I have found most useful so far:

Al-Sabah, R., Menassa, C.C. and Hanna, A., 2014. Evaluating Significant Risks In The Middle East North Africa (Mena) Construction Projects From Perspective Of Multinational Firms. Construction Management and Economics, 32(4), pp.382-402.

Doloi, H., Sawhney, A., Iyer, K.C. and Rentala, S., 2012. Analysing factors affecting delays in Indian construction projects. International Journal of Project Management, 30(4), pp.479-489.

Foreman, C. (2013). Unrest shakes up construction sector. MEED: Middle East Economic Digest, 57(20), pp20-21

The key issues that have come out of my reading so far are that the state of construction in UAE had shortcomings that subsequently lead to an uncertainty of liabilities, thereby hindering the efficient collection of construction payments. According to Kivrak et al., the gap originated from the lack of adequate attention to construction projects conditions that surround the contract particularly in the early stages of development. As the researchers posit, may construction experts are mainly concerned with task completion within the specified time and quality. As such, contract drafting occurs just as a sheer formality, and not an essential component of a construction project.

In effect, projects have a high propensity of termination, as well as conflicts because initial payments were delayed. Additionally, Townsend articulates that some construction projects were forced to terminate due to payment problems. As Townsend (2016) asserts, UAE companies are currently struggling to make payments on time and in most instances, they are prone to delaying the payments as liquidity tightens in the region. As the researcher further articulates, some companies have been forced to relocate to scape debts they are not able to repay. Additionally, the Association of Consulting Engineers (ACE) approximated that Middle East clients owe English construction millions of dollars. Therefore, it can be derived that the issue of payment collection presents a significant challenge to the UAE government, and the problem stems from inadequate statutory mechanisms of payment that can be employed in overcoming the shortness of law and contracts.

UAE construction law has not been favorable, is associated with issues of uncustomary liabilities. For example, these negative issues include decennial liability, risks endured by contractors, the uncertainty of approved amount of liquidated damages, as well as the uncertainty of agreed liquidated indemnities.

One of the regulations for UAE constructions, as Grose and Shlah note, is the decennial liability, which refers to the statutory liability implemented by Article 880883 of the UAE Civil Code on all supervisory architects, building contractors, and engineers. The Act, which influences construction in the nation imposes a joint liability on the structural flaws groups for ten years after a handover. Importantly, the Act cannot be restricted or omitted by contract, or even used by contractors against the sub-contractors. In essence, the standard contractors all-threat or professional indemnity cover does not address the issue of decennial liability. The liability requires that contractors, architects, and engineers be liable for any structural defects or damages for a period spanning ten years. In addition, many people consider decennial liability as an erroneous responsibility and create a limitation on the potential of the architects, engineers, and contractors to allocate risks that are associated with projects to the commercial companies.

In the UAE, the contractual omission of decennial liability is particularly ineffective. In addition, there are limited mechanisms that contractors and consultants can capitalize to escape the liability, and in particular, for the situations that involve serious structural collapses and defects. Further, the concept of decennial liability applies to situations in which the defects or damages occur from unforeseeable circumstances. It should be noted that the situations can occur when the employer grants his or her approval to the method of construction, as well as when the contractor or consultant receives a notice of the defect.

Decennial liability can also be applied in situations that entail the absence of the contractor or consultants negligence or fault. For instance, whenever a building collapses or becomes structurally unsafe or unusable, the contractor or consultant can be held accountable for the subsequent replacement of the entire structure, as well as compensating the loss experienced by the owner of the building. For this reason, this places the consultant or contractor at a disadvantage.

Furthermore, decennial liability also offers a valuable defense to the owner of the defective building and does not require proving or allocating fault when the building collapses. The protection applies eve when the issues of structure threaten the safety or stability of the building. Despite the existence of certain conditions in which the international consultants and contractors are working in UAE to negotiate caps on the entire project liability, these parties can be astonished at the extra potential liabilities they are embracing. In essence, this often occurs the consultants and contractors base their negotiations on the various construction policies in the market such as the U.K.

U.K. is one of the countries that started addressing controversies in the construction industry. One of the pioneers in the research is Sir Michael Latham, who in report Contracting the Team dated 1994, addressed some of the issues in the U.K. construction sector, and the construction Act was developed from that. However, in this research, only part II will be considered, which deals with law changes about the construction projects. Further, even though Part II also contains payment and adjudication, for this research, only payment provisions will be considered as the foundation for the proposed solution to lack of effective payment mechanism in the UAE construction sector. Even so, the degree of success of the English Act is debatable. For example, Riches and Dancaster recognized the U.K. Act as a major driver of dispute resolution away from litigation. In the case, it was stated that within a span of five years, between 9,000 and 12,000 notices of adjudication, only less than 2% resorted to courts. Also Michael Latham in his 2004 review of the Act stated some concerns that not all section 110 notice payment procedures were effective and not all concern of payment, as stipulated in the 1996 Act were addressed. For this reason, with various limitations being identified in the Act, it was subject to further review, and this resulted in the New Act. The U.K. government said the reason for the New Act was to provide a mechanism for improved dispute resolution and cash flows under U.K. construction contracts. The New Act had numerous benefits for the construction industry in U.K. In essence; it increased clarity and transparency in exchanging information for contract payments to effectively manage cash flows between employers and contractors. The New Act was also intended to encourage the effective resolution of disputes through an adjudication process instead of resorting to time consuming and costly solutions including litigation. The New Act also strengthened the right for performance suspension under the contract. As such, this research will focus on the advantages of the New U.K. Act, and thus, propose a solution to the problems within the UAE construction sector.

Part 8 of the Local Democracy, Economic Development and Construction Act substantially amends the Construction Act amended construction contracts in England, Scotland, and Wales, and came into effect after October 1, 2011. The amendments aimed at increasing certainty and clarity in the construction contracts and to introduce a fairer payment regime for contractor rights. It also aimed at making adjudication more accessible, and in particular, for dispute resolution. The main changes to the payment regime included requirement of the paying party to pay the notified sum, as well as the introduction of new rules on withholding notices and payment. The regime also focussed on the abolition of conditional payment clauses.

The sort of information I think I will need is:

To successfully complete the research, I will need information related to UK and UAE construction law. Under the UAE construction law, important laws include provisions of articles 872 to 896, which are under the UAE Federal Law No. 5, which was implemented in 1985, and amended in 1987 by what is now known as the Civil Code in relation to construction projects and the general principles and maxims that have been set by the law based of the legal construction framework. Since the research will also investigate payment issues and liabilities, the research will also need payment transaction laws and the most common is the UAE Commercial Transaction Law no. 18, which was i...

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