TRW & Co · Real Estate, Construction & Energy
Infrastructure Projects in the UAE
Infrastructure projects in the UAE, from rail and metro lines to utilities, stormwater and social infrastructure, are being procured at pace in 2026. A new civil code now governs onshore construction contracts, regional supply chain disruption is testing force majeure clauses, and climate law adds reporting duties. This guide covers delivery models, key contract terms, claims and disputes.
Key pointThe new Civil Transactions Law applies from 1 June 2026 without general retroactive effect, so a single project can have its main contract under the old code and later variations or subcontracts under the new one. Map this before any claim is notified.
At a glance
New civil code in force
Federal Decree-Law No. 25 of 2025 replaced the 1985 code on 1 June 2026, rewriting the muqawala rules that govern onshore construction contracts.
Procurement law varies
Dubai government contracts follow Dubai Law No. (12) of 2020, while federal and Abu Dhabi entities apply their own procurement frameworks.
Damages under court control
Article 340 lets courts reduce exaggerated agreed compensation or increase it for fraud or gross negligence, and agreements excluding this are void.
Ten-year structural liability
Contractors and engineers carry strict decennial liability for collapse and structural defects, which cannot be excluded or capped by contract.
Climate law obligations
Since 30 May 2025, entities emitting over 0.5 MtCO2e a year must report emissions, and critical sectors including infrastructure need adaptation plans.
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What infrastructure projects in the UAE involve
Infrastructure projects in the UAE span national rail, metro and road networks, ports and logistics hubs, airports, power, water and wastewater systems, stormwater tunnels, district cooling, data centres and the social infrastructure that serves fast-growing cities. They are commissioned by federal bodies, emirate governments, government-owned companies, utilities, master developers and, increasingly, private investors under concessions.
The legal work sits in three places. Before contract, it concerns procurement, delivery model, risk allocation and bankability. During delivery, it concerns variations, delay, payment, design responsibility and interfaces between packages. After completion, it concerns defects, decennial liability, operation and handover. Most losses on major projects can be traced back to a decision taken, or not taken, in the first of those phases.
Activity is high. Etihad Rail now runs a national network with passenger bookings open, Dubai is extending its metro, and Abu Dhabi has published a public-private partnership pipeline of 24 projects across transport, infrastructure and social sectors for 2026 and 2027. At the same time, regional shipping disruption in 2026 and a new civil code have changed how risk is priced and argued.
The legal framework for infrastructure projects in the UAE
Onshore construction and engineering contracts are governed by UAE civil law. Since 1 June 2026 that means the Civil Transactions Law, Federal Decree-Law No. 25 of 2025, which replaced the 1985 code and rewrote the rules on muqawala (contracts for works). Its key provisions include strict decennial liability of contractors and engineers for collapse and structural defects, a statutory right for the employer to terminate early on paying compensation, a hardship rule allowing courts to rebalance obligations in exceptional circumstances, and controls on agreed compensation that let courts reduce or increase liquidated damages in defined cases. The text is on the UAE Legislation portal.
Government employers add their own procurement law. Dubai government contracts are governed by Dubai Law No. (12) of 2020, federal entities by federal procurement rules and Abu Dhabi entities by Abu Dhabi’s procurement framework. In Abu Dhabi, the Abu Dhabi Projects and Infrastructure Centre plays a central role in delivering government capital projects and works with the Abu Dhabi Investment Office on the PPP pipeline. Transport authorities such as Dubai’s Roads and Transport Authority and national operators such as Etihad Rail procure through their own processes.
Climate obligations
Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects has been in force since 30 May 2025. It applies to public and private entities, including in free zones, requires entities above an annual emissions threshold of 0.5 million tonnes of CO2 equivalent to measure, report and verify emissions, and requires adaptation planning in critical sectors including infrastructure and energy. Administrative fines range from AED 50,000 to AED 2,000,000. For large projects, climate reporting and resilience obligations increasingly appear in employer requirements and lender conditions.
Licensing, local content and workforce
A contractor needs a trade licence covering contracting activities in the emirate where it works, and many employers also require registration or classification with the relevant municipality or authority before award. Foreign contractors often enter through a branch, a locally licensed company or a joint venture, each with different liability, tax and exit consequences. Our page on joint ventures and strategic alliances covers the structuring choices.
Local content is increasingly scored and contracted. In-Country Value certification affects evaluation on many government and government-company tenders, and Abu Dhabi’s local content programme is linked to its PPP pipeline. Commitments on local spend, Emiratisation and local suppliers made at tender stage can become obligations with consequences for non-delivery, so they need to be realistic and passed down the supply chain. Workforce compliance matters too: large projects rely on subcontracted labour, and wage protection, accommodation and health and safety failures in the chain can stop work and damage the main contractor’s standing with the employer.
Projects in the DIFC and ADGM
Projects inside the DIFC or ADGM, or contracts that choose those centres’ laws and courts, follow a common-law framework. That changes how time bars, penalties and implied terms are treated, and it opens the DIFC Courts’ specialist technology and construction list or the ADGM Courts as forums. Choosing the governing law is therefore a commercial decision, not a formality.
Delivery models compared
The delivery model decides who carries design, interface and cost risk. Government and private employers in the UAE use the full range, often on the same programme.
| Model | Who designs | Main risk on employer | Typical use |
|---|---|---|---|
| Design-bid-build | Employer’s consultant | Design errors, interfaces between consultant and contractor | Buildings, roads and packages with mature design |
| Design and build | Contractor, from employer’s requirements | Adequacy of the employer’s requirements; less control over detail | Utilities, industrial and fast-track works |
| EPC or turnkey | Contractor, with single-point responsibility | Mostly price premium; limited employer risk | Power, water, process plants and lender-financed projects |
| Construction management or EPCM | Employer’s designers; manager coordinates trade packages | Cost overrun and interface risk retained | Complex programmes needing flexibility |
| PPP or concession | Private project company and its contractors | Payment obligation and termination compensation | Schools, transport, lighting, stormwater, utilities |
| Framework agreements | Varies by call-off | Volume and pricing commitments | Maintenance, recurring works, rollout programmes |
Concession-based projects are covered in more detail on our page on PPP and concessions. Lender-financed projects usually require EPC terms with fixed price, fixed date and single-point responsibility, which our project finance page explains from the lenders’ side.
Contract terms that decide outcomes
FIDIC forms are widely used on infrastructure projects in the UAE, usually with substantial employer amendments, alongside bespoke government forms and NEC on some programmes. Whatever the form, a small number of clauses decide most disputes, and each interacts with the new civil code.
Notices and time bars
FIDIC-style notice provisions bar late claims. Under UAE civil law, the enforceability of contractual time bars has historically been less certain than under English law, and tribunals weigh the contract against mandatory principles of good faith and the statutory limitation regime. The safe approach is to comply strictly: build notice procedures into project controls rather than relying on arguments that a time bar should not apply.
Delay damages and caps
Liquidated damages are common and usually capped. Article 340 of the Civil Transactions Law allows the court to reduce agreed compensation where it is exaggerated or the obligation has been partly performed, or where the creditor’s fault contributed to the loss, and to award more where fraud or gross negligence is proved. Agreements excluding these controls are void. Draft caps and exclusions knowing they sit inside that statutory frame.
On a major project the contract is not the document signed at award. It is the record of notices, instructions and approvals built up over years, and the party with the better record usually wins.
Variations and early termination
Employers on long programmes need flexibility to change scope, and the variation clause is how they get it. Contractors should check that instructed changes are valued on a clear basis, that time as well as money is adjusted, and that oral or informal instructions are confirmed in writing before work proceeds. Disputes over whether an instruction was a variation at all are among the most common on UAE projects.
The new civil code also gives the employer a statutory right to end a contract for works early, subject to compensating the contractor for costs incurred, work done and the profit it would have earned, with power for the court to reduce that compensation in some cases. Contracts often add a separate termination for convenience clause with its own compensation formula. The two should be read together, and contractors pricing long projects should understand what they would actually recover if the employer stops the job halfway.
Bonds, guarantees and payment security
Employers expect advance payment and performance guarantees, typically on-demand, issued by UAE banks. Calls on guarantees are hard to stop once made, so contractors should negotiate clear call conditions and expiry dates. Contractors should seek payment security too: parent guarantees from private employers, escrow arrangements or milestone structures. For government employers, check budget approval and the payment process before relying on a payment timetable.
Project lifecycle step by step
- Feasibility and procurement strategy. Define scope, budget and the delivery model. For government projects, confirm which procurement law applies and whether the project will be procured as a conventional contract or a PPP.
- Tender and bid. Prepare tender documents or bids with the risk allocation, form of contract and amendments settled. Contractors should price only the risks they can control and qualify the rest clearly.
- Award and mobilisation. Sign the contract, issue bonds and insurances, obtain trade licence and classification for the project, and establish document control, notice registers and reporting lines.
- Design and permits. Progress design through approvals with municipalities, utilities, civil defence and other authorities. Approval delays are a frequent source of claims, so record each submission and response.
- Construction and change management. Administer variations, extensions of time and payment applications under the contract procedure. Notify claims promptly and keep contemporaneous records of delay and cost.
- Completion and handover. Achieve taking-over, resolve snagging, handover documentation and operation and maintenance manuals, and agree the final account where possible.
- Defects and decennial period. Manage the defects notification period, release of retention and bonds, and the ten-year decennial liability period for structural defects that cannot be excluded by contract.
Because the new Civil Transactions Law does not apply retroactively unless it says so, a project signed before 1 June 2026 may be governed by the old code while its variations and new subcontracts fall under the new one. Map which code governs each contract and amendment now, before a dispute forces the question.
Documents and records to keep
Claims on infrastructure projects in the UAE are won on records. Onshore courts usually appoint technical experts whose reports carry great weight, and arbitral tribunals expect contemporaneous evidence. Keep:
- The signed contract, all amendments, employer’s requirements, specifications and tender clarifications.
- Programme baselines, monthly updates and as-built programmes in native format.
- Notice registers, correspondence, site instructions, RFIs and meeting minutes.
- Daily records of labour, plant, weather, access and authority inspections.
- Variation orders, valuations, payment applications and certificates.
- Permit applications, approvals and evidence of authority delays.
- Supplier and shipping records showing the impact of supply chain disruption.
- Bonds, insurances, guarantees and their expiry dates.
Risks and common mistakes
Treating supply chain disruption as automatic force majeure
Regional shipping disruption in 2026 has delayed materials and equipment across the Gulf. Whether this excuses delay depends on the contract’s force majeure and extension of time clauses and on the civil code’s tests, which require the event to be unforeseeable and unavoidable. Notice must be given in time, mitigation must be shown and the actual impact on the critical path proved. Hardship under the new code is a separate route that may allow a court to rebalance obligations without terminating the contract. Assess each contract individually and document the impact.
Ambiguous design responsibility
In design and build contracts, disputes often turn on whether a problem arises from the employer’s requirements or the contractor’s design. Reference designs, preliminary designs by the employer’s consultant and fitness-for-purpose obligations are a common combination that creates overlapping responsibility. Clarify which documents prevail, whether the contractor must verify the employer’s data and what standard of care applies, and make sure professional indemnity insurance follows the design risk.
Unmanaged interfaces between packages
Large programmes divide work among many contractors, and delay at one interface can cascade. Employers who retain interface risk without the resources to manage it often face claims from several contractors at once. Use interface agreements, clear access dates and a single programme authority, and record when each party gives access or information to the next.
Assuming decennial liability can be capped
Contractors and engineers carry strict decennial liability for ten years for total or partial collapse and structural defects threatening stability, and this cannot be excluded or limited by contract. Contractors should price this exposure, confirm insurance cover and ensure subcontractors carry equivalent obligations. Employers should keep the records needed to bring a claim within the period.
Letting payment disputes become insolvency
Payment delays move quickly through supply chains. Subcontractors stop work, suppliers withhold deliveries and guarantees get called. Use the contract’s payment and suspension mechanisms early, consider debt recovery tools for undisputed sums, and monitor the counterparty’s financial health. Where a counterparty is distressed, the insolvency regime changes the options.
Dispute resolution
Infrastructure contracts in the UAE commonly provide for engineer’s determinations or dispute boards, followed by arbitration. The Dubai International Arbitration Centre and arbitrateAD administer most UAE-seated construction cases, with arbitrateAD offering an expedited procedure for smaller claims. The DIFC Courts have a technology and construction division, and the ADGM Courts hear disputes within their jurisdiction. Government contracts may require onshore courts or approval before arbitration. Our pages on construction disputes and construction arbitration go further.
Before the main dispute, consider interim steps. Onshore courts can appoint an expert to record site conditions before work covers them up, and both courts and tribunals can grant interim measures to preserve evidence or prevent a bond call made in clear bad faith. These applications need to be prepared quickly, with the contract, the correspondence and the technical evidence ready, so the decision whether to use them should be taken in the first days of a dispute, not months later.
Cross-border angle
Contractors on infrastructure projects in the UAE frequently come from China, South Korea, India, Turkey and Europe, with engineers and supply chains spread across Asia and the United Kingdom. Bangladesh and South Asia supply a large part of the workforce and, increasingly, subcontracting capacity. Each relationship raises questions of governing law, enforceability of guarantees and awards in the contractor’s home country, sanctions screening of suppliers and shipping routes, and the tax treatment of offshore design and supply.
Saudi Arabia’s giga-projects compete for the same contractors and materials, which affects pricing and availability in the UAE. Groups active in both markets should align their contracting standards while respecting differences between the UAE and Saudi civil codes. We coordinate with TRW & Co’s offices in Dhaka, Singapore, London and China and with local counsel elsewhere so that offshore contracts, onshore contracts and enforcement strategy fit together.
How TRW & Co helps with infrastructure projects in the UAE
Procurement and bid support
We review tender documents, prepare clarifications and qualifications, and advise bidders and employers on procurement law compliance for government projects.
Contract drafting and negotiation
We draft and negotiate FIDIC-based and bespoke contracts, subcontracts, consultancy appointments and bonds, aligned with the new Civil Transactions Law.
Claims and contract administration
We support notices, extension of time and variation claims during the project, so that entitlements are preserved before a dispute arises.
Disputes and enforcement
We develop strategy for dispute boards, arbitration and court proceedings and coordinate experts, working alongside locally licensed advocates where needed.
We provide advisory, strategy and coordination services. Where representation before UAE onshore courts or the DIFC or ADGM Courts is required, we work alongside locally licensed advocates and registered practitioners. See also our page on construction contracts, browse our practices, or contact our Dubai team to discuss a project.
Checklist for decision-makers
- Which civil code governs each contract and amendment on the project, and have we mapped the differences?
- Does the procurement route comply with the procuring entity’s law, and is the employer able to agree arbitration?
- Is design responsibility clear, with order of precedence and verification duties defined?
- Are notice procedures built into project controls, with a live notice register?
- Have delay damages, caps and exclusions been checked against Article 340 of the new code?
- Are supply chain and force majeure risks assessed contract by contract, with impact evidence?
- Do bonds, insurances and decennial liability cover align across the contract chain?
- Are climate reporting and adaptation obligations reflected in employer requirements and budgets?
Infrastructure projects in the UAE are long, interconnected and closely scrutinised. Early legal input into delivery model, contract terms and records costs little compared with the claims it prevents.
Frequently asked questions
01Which law governs construction contracts on UAE infrastructure projects?
Onshore contracts are governed by the Civil Transactions Law, Federal Decree-Law No. 25 of 2025, which replaced the 1985 code on 1 June 2026, subject to transitional rules for earlier contracts. Government projects also follow the procuring entity’s procurement law, such as Dubai Law No. (12) of 2020 for Dubai government contracts. Projects in the DIFC or ADGM, or contracts choosing their law, follow a common-law framework.
02Can delay damages be reduced by a UAE court or tribunal?
Yes. Article 340 of the Civil Transactions Law allows agreed compensation to be reduced where it is exaggerated, where the obligation has been partly performed or where the creditor contributed to the loss, and increased where fraud or gross negligence is proved. Agreements that exclude these controls are void. Liquidated damages should therefore be set at a defensible pre-estimate and supported by evidence of likely loss.
03Does decennial liability apply to infrastructure works?
Yes. Contractors and engineers carry strict liability for ten years for total or partial collapse and for defects that threaten the stability or safety of buildings and fixed structures. The liability cannot be excluded or limited by contract. It applies alongside ordinary defects obligations, so contractors should check that insurance and subcontracts reflect it and employers should keep the records needed to pursue a claim within the period.
04Is regional shipping disruption force majeure?
Not automatically. It depends on the force majeure and extension of time provisions in the contract and on the civil code, which requires an event that was unforeseeable and could not be avoided. The affected party must give timely notice, mitigate and prove the actual effect on performance. Where performance remains possible but has become excessively onerous, the new code’s hardship rule may allow a court to rebalance obligations instead.
05Where are infrastructure disputes usually resolved?
Most major contracts provide for engineer determinations or dispute boards followed by arbitration, often under DIAC or arbitrateAD rules, and sometimes seated in the DIFC or ADGM. The DIFC Courts have a technology and construction division. Some government employers require onshore courts or need approval before agreeing to arbitration, so the dispute clause should be checked against the employer’s rules at tender stage.
06Do climate change laws affect infrastructure projects?
Increasingly. Federal Decree-Law No. 11 of 2024, in force since 30 May 2025, requires entities with annual emissions above 0.5 million tonnes of CO2 equivalent to measure, report and verify them, and calls for adaptation planning in critical sectors including infrastructure. Fines range from AED 50,000 to AED 2,000,000. Employers and lenders are building these requirements into project specifications and reporting.
07How does TRW & Co support infrastructure clients?
We advise employers, contractors, consultants and investors on procurement, contract terms, claims and disputes, and coordinate cross-border aspects through our network. Our work is advisory and strategic; where representation before UAE onshore courts or the DIFC or ADGM Courts is required, we work alongside locally licensed advocates and registered practitioners. Contact us at info@trw.co or +971 58 942 1012.
Sources and official materials
- UAE Legislation portal — Civil Transactions Law and federal decree-laws
- Abu Dhabi Investment Office — Abu Dhabi PPP pipeline with the Abu Dhabi Projects and Infrastructure Centre
- Roads and Transport Authority, Dubai — Dubai transport infrastructure and projects
- Etihad Rail — National rail network and services
- Dubai International Arbitration Centre — DIAC Arbitration Rules and case filing
- arbitrateAD — Abu Dhabi arbitration rules and expedited procedure
- DIFC Courts — Technology and construction division and court rules
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
