Dubai legal body sees massive increase in construction disputes

The fall of Dubai’s construction industry has sparked a huge backlog of legal claims, reported to total around $6 billion.

According to Building magazine, the arbitration court is said to be ‘swamped’ thanks to disputes over unfinished contracts and outstanding payments. Claims are expected to triple during 2009.

Last year, the Dubai International Arbitration Centre (DIAC) is said to have heard around 100 disputes. This year, DIAC has seen 180 cases already and is expecting to see around 300 cases over the course of the year. DIAC currently employes just six case workers however the massive increase in the number of disputes means they are now looking for a further two employees to help with the case load.

Developers, engineers and construction firms are now concerned that DIAC won’t be able to cope with the number of cases leading to long delays before the cases are looked at, and therefore compensation is paid.

Around 80 percent of the arbitration cases as said to be construction disputes with most of the remaining 20 percent involving real estate.

Dubai’s construction industry has taken a massive hit in the last 12 months. The normally popular Cityscape event exemplifies the issue with venue room rates cut as much as a quarter in an attempt to entice property investors to the event. Cityscape Abu Dhabi, held in April, also saw a 25% reduction in the number of visitors to the event.

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