Dubai has formally enacted Law No. (8) of 2025, a landmark legal framework to expedite alternative dispute resolution (ADR) for construction-related conflicts in the housing sector. The law, effective from January 1, 2026, targets disputes related to contracts for the construction of Emirati citizens’ homes within Dubai.
Fast-Track Dispute Resolution for Construction Cases
This legislative move establishes a fast-track mechanism designed to resolve disputes valued up to AED 10 million (approximately USD 2.7 million) without resorting to prolonged court cases. The law covers common conflict areas such as payment delays, variations in contract scope, construction defects, project timeline delays, and breaches by contractors or engineers.
Mandatory Mediation and Adjudication Committee
Under the law, disputes must first enter a mandatory mediation phase, to be completed within 20 days, extendable by mutual consent. This process is administered by a specialized branch within the Centre for Amicable Settlement of Disputes, staffed with construction experts. If mediation doesn’t result in an agreement, the matter escalates to a Construction Disputes Adjudication Committee. This committee, consisting of a judge and two construction specialists, must issue a binding decision within 30 days, with a possible one-time extension.
Enforceability, Appeals, and Cost Controls
Key features include the enforceability of committee decisions, appeal rights to the Court of First Instance within 30 days, suspension of legal limitation periods during dispute resolution, and a capped dispute registration fee of AED 250. The law aims to reduce cost and delays associated with construction disputes, preserve contractual relationships, and ensure timely handover of residential projects.
Advancing Construction Governance in Dubai
This legislation represents a significant advancement in Dubai’s construction industry governance by institutionalizing ADR processes, thereby ensuring that residential construction disputes are resolved fairly and swiftly, benefiting homeowners, contractors, and engineers alike.
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