Dubai's construction sector drives up commercial disputes in Q1

dubai - 70% of commercial disputes in Dubai were related to construction sector

The number of commercial disputes increased in the first quarter of 2018 as compared to last year, with 70 per cent of cases filed related to companies in the construction sector, according to figures released by the Dubai Chamber of Commerce and Industry's legal services department.

Jehad Kazim, head of legal services, Dubai Chamber of Commerce and Industry, said it received 127 mediation cases valued at Dh18 million in the first quarter of 2018, an increase of 48.4 per cent.

It received 1,829 mediation cases valued at Dh52 million between 2015 and 2017, averaging around 600 cases a year.

"These figures reflect a growing trend among businesses that are turning to mediation as an alternative, quick and effective option for settling their business-related disputes," she said.

Seventy per cent of the total mediation cases received over the last 3 years related to construction, while freight and shipping accounted for 20 per cent of disputes. Services and other sectors accounted for the remaining 10 per cent.

According to Dubai Chamber, non-payment of dues, payment delays, goods not conforming to specifications and breach of contracts are among the most common reasons for commercial disputes. "Mediation provides businesses with several advantages as it offers a practical and easy way of settling disputes amicably and efficiently. It is an ideal mechanism for businesses to resolve their disputes as it is confidential, quick and cost-effective compared to arbitration and litigation which can often be costly and lengthy in nature," Kazim said.

In 2017, 163,000 companies joined Dubai Chamber as members, an increase of 8 per cent, taking the total membership to 217,000.

According to the Dubai Chamber, around 40 per cent of mediation and legal requests are made electronically or via its Smart Mediation app, and many of these requests can be processed within 8 minutes or less.

The Chamber organises seminars and workshops regularly to spread awareness among the business community on different legal issues to keep its members and Dubai-based companies and professionals informed of the latest regulatory developments that impact them and provide them with more clarity on such matters.

"We have seen a strong uptick in demand for our mediation service in recent years, as more businesses become aware of the unique benefits and advantages that this service offers," she added.  

- waheedabbas@khaleejtimes.com