Let’s go to court

Let’s go to court

Dubai courts are suddenly finding themselves flooded with cases thanks to a rising number of property and trade disputes in the city.

May 19, 2009 12:39 by Aarti Nagraj

According to a recent report from Norton Rose, an international legal group, over 1,000 disputes have also been lodged with Dubai’s Real Estate Regulatory Agency (Rera) in relation to delayed or cancelled projects, and the centre reportedly resolved 95 cases during March 2009.

And it seems the number of cases is set to rise further.

The report says that in the past, contractors and consultants were reluctant to take action against developers in the region for two reasons. Firstly, the major developers in Dubai had a large number of significant projects on their books in which contractors were keen to remain or become involved. And secondly, many large developers are wholly or partially state-owned, and there was a perception that taking action against them might limit a company’s future business opportunities in the region.

But now, following numerous project cancellations and suspensions, cash-strapped sub-contractors are being forced to take action against main contractors in an effort to recover outstanding sums.

And, with investors and developers both defaulting on agreements, going to court seems like the only way to resolve the differences.

The rising number of legal cases will prove to be an acid test for Dubai’s legal institutions and frameworks, says Norton Rose, particularly with regards to the speed and efficiency of the dispute resolution processes, and in respect of the “effectiveness and enforceability of the judgments or arbitral awards obtained as a result of those processes.”

Will Dubai be able to pass the test?

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Tags: arbitration, cases, Construction, defaults, dispute, Dubai, Financial Crisis, law, legal issues, property court, RERA