Introduction

Since the first discovery of oil in its territory, UAE became an attractive business destination to experts
from different parts of the world. Despite that UAE is a civil law jurisdiction, the presence of law
practitioners of common law background in UAE is noticeable. This makes resources such as the SCL
Protocol and the AACEI RP-29R acceptable authorities in UAE in deciding on concurrent delays.

Managing concurrent delays is of potential divergence between the common and civil laws.[1] This
divergence begins at the definition of concurrent delays and continues further to the dealing. The UAE
CTC does not adopt or recognize an express well developed definition of concurrent delays. This
situation widens the margin of common sense application within which courts move to attribute
liabilities for competing delay.[2]

However, an area of similarity between the UAE CTC and other jurisdictions is that parties can account in
their contract for the consequences of concurrent delays in the form of delay damages and prolongation
cost. Parties to a contract can provide in their mutual contract for whether the contractor is entitled to
extension of time in the case of concurrent delays.[3] Such arrangements demonstrate how significant
the contract drafting can be in determining the pathway for concurrent delays analysis. FIDIC, as widely
employed in UAE, sets a valid example of this.

Domestic courts rely on their interpretations of the parties’ intentions to handle uncertainties in their
contracts (e.g. how EOT mechanisms are set). Those interpretations result from of the courts’
consideration of the circumstances around entering into those contracts drawings assistance from the
contemporary projects records and commercial customs and practices.[4] Notwithstanding the above, it
is essential to consider the principle in Article 246(1) for the parties to perform the contract in a
consistent manner with the requirements good faith. Stokes and Widdowson[5] asserted that
considering good faith enables the court to evaluate situations such as delay concurrency on ‘common
sense’ grounds rather than being restricted to apply pre-set principles such as the but-for or Malmaison.

The UAE Civil Code and concurrent delays

The UAE CTC in Article 390(1) enables the parties to include a provision in their mutual contract to fix in
advance the compensation against delay damages. However, Article 390(2) provides that the parties’
agreement can be varied by the court, upon the application of either party, to equate the compensation
to the actually incurred loss which annuls any earlier agreement amounts to otherwise.[6] Hence, it
remains a valid defence for the contractor to challenge the predetermined amount of liquidated
damages.[7]

The power of the court extends by Article 291 of the UAE CTC to apportion the damages between the
parties under certain conditions. Article 291 stipulates that the court may determine the proportion of
compensation that each party, that contributed to the occurrence of the damages, is liable for had those
damages been caused by several parties. Hence, the court may decide that the employer and the
contractor shall share the responsibility equally or in percentages based on the court’s view of the
circumstances of the case.[8] Grose[9] highlighted an area of contrast between the UAE CTC and the
English law as to the power conferred on the courts in the UAE to adjust the liquidated
damages[10] while the common law restricts the courts’ power to enforce or annul the liquidated
damages clause in a contract.
However, the application of apportionment is often resisted by its conflict with the well-established
prevention principle.[11] Though the prevention principle is not expressly provided for in the UAE CTC, a
number of Articles (e.g. Articles 106, 246(1) or 290) may operate integrally to compensate that absence.
This narrows down the area of discretion for the courts in adjusting or apportioning compensations.

Article 290 provides for the court’s powers to reduce or nullify the damages if the aggrieved party
contributed to or took part in increasing those damages. In application of this Article, the employer may
not benefit, in the form of recovering the damages in whole, from the contractor’s breach of its
contractual obligations if the employer contributed to those damages by its act of prevention. In the
case 266/2008,[12] the court rejected the employer’s claim for the application of liquidated damages
and granted the contractor EOT for the delays incurred due to the employer’s acts of prevention,
namely the late nomination of subcontractor, delayed handing of design drawings, design changes, and
delays in material selection.

It then follows that the prevention principle can be said present in the UAE CTC though not expressly
provided for. The requirement for the parties to act in good faith leads to a clear presence of the
prevention principle since the parties cannot intend to grant the employer compensation for delays
caused by its own acts of prevention. Accordingly, an interpretation to the extent of granting EOT for
non-culpable delays is appropriate.[13] Besides, neither party can unlawfully exercise its parts as
provided in Article 106.

In the case 1/2006,[14] the contractor’s relief of the recovery of the liquidated damages was decided
purely on the presumption that parties acted in good faith. The case is about additional works which
were instructed by the employer to change the project nature from residential to hotel apartments. The
court upheld the expert report that granted the contractor four months EOT for the additional works
and rejected the employer’s claim to recover liquidated damages. The court held that it is not
reasonable to recover liquidated damages from the contractor for delays caused by the employer’s act
of prevention. This can be seen in the court’s presumption that the contractor acted diligently in
carrying out the additional works.

Therefore, an apportionment exercise that avoids conflicts with Articles 106, 246(1) or 290 can be
deemed consistent since it balances the interests of the parties in conformance with the principle of the
contributory negligence.

The UAE courts dealing with concurrent delays was evident in the case 184/2008,[15]the claimant (the
contractor) entered into a contract with the defendant (the employer) to build two buildings. Upon the
commencement of the first building, it was discovered that the new construction will risk the stability of
an existing building which led to the project been suspended till the foundation design was revised and
work permits were granted. Subsequently, the employer deleted works worth of 47% of the contract
amount. The court decided that each party shall recover its loss on actual basis. The contractor was
granted EOT for the period within which the design was revised which it had no liability for. The
contractor recovered the prolongation cost for the same period; the loss of profit at 10% of the value of
the work omitted; the due payments; and the amounts against the variation orders issued. The
employer, on the other hand, recovered 10% of the contract amount against the liquidated damages for
the delay incurred by the contractor concurrently with the employer delays, in addition to the amount
of works that the employer performed in lieu of the contractor.
In reaching the decision in the case 184/2008, the court considered, among other articles in the UAE
CTC, Article 894 which provides that if the contractor becomes incapable of performing the works for
reasons it had no responsibility for, the contractor shall be entitled to recover the amount against the
works it performed and the expenses it incurred in that performance up to the amount of the benefit
the employer has derived therefrom.

However, apportionment was criticized when applied in UAE in the absence of clear contract language
that gives rise to clear evidence on the basis of which apportionment is carried out. Such evidence in the
form of tests was more often than not formulated in common law jurisdictions while similar test is a
rarity in UAE.[16]

In similarity between the common and civil laws, the entitlement to EOT does not lead automatically to
compensation against it. In the case 213/2008,[17] despite that the contractor was awarded EOT, its
claim to recover compensation against this period of prolongation was rejected since the contractor
failed to provide evidence that it incurred losses due to this delay which made its claim ungrounded
lacking the legal foundation.

UAE contracts and concurrent delays

An integral prospect of the dealing with concurrent delays in UAE can be uncovered by looking at the
approach that FIDIC contracts adopt towards concurrent delays. It is quite noticeable that FIDIC is the
preferable form of contracts in UAE. Though a significant portion of the employers use bespoke
contracts, FIDIC remains the foundation for their contracts with FIDIC main clauses retained while
changing other clauses, to fit the employers’ intentions, which mostly do not result in much deviation
from the main theme of FIDIC.

Baker[18] asserted that FIDIC forms do not address concurrent delays situations. This results in unclear
conclusions whether contractors are entitled to EOT. The resort in such cases, especially in true
concurrency situations, is to the circumstances of the cases to reach cogent determinations drawing
support from the governing laws. Baker stated:

‘The fact that the Contractor either would or would not have been entitled to an extension of time if only
one of the causes had occurred is not determinative, nor necessarily is the order in which the events
occurred. In many instances, although quite often difficult, it will be possible to identify one of the causes
as being the effective cause of the delay.’[19]

Bunni’s[20] view met Baker’s in claiming that the analyst to EOT claim shall consider all circumstances
surrounding the situation of concurrency taking assistance of analysing the project activities network
which will inevitably be necessary.

Baker[21] suggested that the parties may amend FIDIC forms to account for delay concurrency by
making express provisions stipulating the contractor’s entitlement. He provided an example for that as
drafted in the bespoke contract published by the Abu Dhabi Executive Affairs Authority that was based
on the Red Book where Sub-Clause 8.4 was amended to stipulate that the contractor’s entitlement to
EOT under any of the stated grounds is subject to the proviso that:

‘Any such delay which is concurrent with another delay for which the contractor is responsible shall not
be taken into account.’
In his analysis of the EOT clauses in FIDIC, Corbett[22] stated about how concurrent delays are handled
in FIDIC:

‘This problem, which has been the subject of much comment and debate, has not been addressed, let
alone resolved, by the [EOT] clauses.’[23]

Corbett[24] asserted that upon the occurrence of concurrent delays, the parties should immerse into an
insight CPM analysis to determine which of the competing delays is dominant and effective. The
conditions of FIDIC contracts direct the engineer or the arbitrator to conclude that the contractor, had
any of the excusable events in the EOT clause occurred, shall be entitled to time extension whether or
not the contractor was in fault or caused delay that competed with the relevant event. As to the cost,
the engineer or the arbitrator shall limit his analysis to the test of causation on the basis of fairness.
Therefore, he may find himself obliged to make all-or-nothing decision.[25]

However, to overcome the FIDIC inadequacies in dealing with concurrent delays, Corbett suggested
that:

‘As concurrent delays are a common occurrence and as the lack of provision exposes both parties to
considerable risk, express terms addressing the problem are highly to be recommended.’[26]

Summary

UAE CTC provides neither for an express definition of concurrent delays nor for a recommended
approaches to deal with them. Domestic courts rely on contract language to determine concurrent
delays. UAE courts resort to interpret a contracts clauses in light of the circumstances in which those
contracts were signed and to consider the requirements for good faith and proper use of each party’s
rights. This is said to provide the judges with discretion to act on the grounds of the common sense and
business practices and customs rather than being compelled to adopt a particular approach that may
not suit all the cases to the same extent.

A number of articles in the UAE CTC promote apportionment as an acceptable approach in terms of cost
compensation in concurrent delay cases. However, time extension remains determined by way contract
language. UAE courts are conferred with the power to adjust the liquidated damages clauses in the
contract and not only to enforce or annul them. Though the prevention principle is not provided for in
the UAE law, precedent courts decisions conformed to it. It was established through court cases in UAE
that the entitlement to EOT does not automatically lead to a subsequent entitlement to compensation.

FIDIC, as a commonly used form of contracts in UAE, does not clearly address concurrent delays thus
resorting to FIDIC to conclude concurrent delays situations is not determinative. Parties may opt for
amending FIDIC standard forms to include clauses to resolve concurrent delays situations. Upon the
occurrence of the competing delays, parties are advised to undertake in depth CPM analysis which is
essential in attributing the parties’ liabilities for the delays in each time interval.

A recap was proposed by O'Leary[27] in the form of a stepped approach to address concurrent delay
situations in UAE. Firstly, through the consideration and application of the contract language pertaining
to the contractor’s entitlement of EOT in delay concurrency situations. Secondly, by the recourse to the
UAE laws to determine the financial consequences of that delay.
[1] Michael Grose, Construction Law in the United Arab Emirates and the Gulf(Wiley Blackwell,
2016)130.

[2] Ibid 131.

[3] Ibid.

[4] ibid 133.

[5] Michael Stokes and Samuel Widdowson, “Concurrent Delay: A Contractor Get Out of Jail Card or
Employer Windfall?”, Insight from Hindsight, Navigant Consulting Inc, Issue 5, March 2013.

[6] Steve Briggs, “Controversial Issues in Delay Analysis” Society of Construction Law (Gulf), 2013, 35.

[7] Richard Harding QC, “concurrent delay: myth or reality?” Society of Construction Law (Gulf), 2009,
35.

[8] Ibid 9.

[9] Grose (n 37) 133.

[10] The Dubai Court of Cassation upheld its power to adjust the amount of penalty in the
case 138/1994 [13 November 1994].

[11] This point was discussed earlier in Chapters 3 & 4.

[12] Dubai Court of Cassation, 266/2008 [17 March 2009].

[13] Grose (n 37) 133.

[14] Dubai court of Cassation 1/2006 [16 April 2006].

[15] Dubai Court of Cassation 184/2008 [30 December 2008].

[16] Grose (n 37) 135.

[17] Dubai court of Cassation 213/2008 Commercial Appeal [19 January 2009].

[18] Ellis Baker et al, FIDIC contracts: Law and Practice (5th edn, Routledge, 2009) 8.268.

[19] ibid 8.268.

[20] Nael Bunni, The FIDIC Forms of contract (3rd edn, Blackwell Publishing, 2005) 17.5.

[21] Baker (n 54) 8.270.

[22] Edward Christopher Corbett, FIDIC 4th: A Practical Legal Guide, a Commentary on the International
Construction Contract (Sweet & Maxwell, 1991) 128-129.

[23] Ibid.

[24] Ibid.

[25] Ibid.
[26] Ibid.

[27] Dean O'Leary, ‘Dealing with Concurrency in Construction Delay Claims - A significant proportion of
construction claims in the UAE involve issues relating to the delayed completion of a
project’ < http://www.tamimi.com/en/magazine/law-update/section-8/april-7/dealing-with-
concurrency-in-construction-delay-claims.html> accessed 15 September 2017.