Dentons advises on Abu Dhabi Government Construction Contract

Dentons has advised Abu Dhabi Projects and Infrastructure Center (ADPIC) on the issuance of an updated and revised version of the Abu Dhabi Government Construction Contract (ADGCC).

The ADGCC is mandatory for all government capital construction projects being executed under the management of Abu Dhabi Government Entities (ADGEs). With the Abu Dhabi Government having approved a budget of around AED66bn for 144 new capital projects in Abu Dhabi, the updated ADGCC represents a significant milestone in the Emirate’s construction market. It also reflects ADPIC’s desire to encourage procurement best practices to ensure the Abu Dhabi construction sector attracts the top quality leading local and international contractors needed to deliver the numerous world-class projects being developed in the Emirate.

The new ADGCC was founded on the back of extensive workshops with the concerned ADGEs and feedback from key international contractors. Dentons and ADPIC have developed a revised construction contract which focuses on the early resolution of disputes, appropriate and equitable risk allocation, more stringent environmental requirements and increased protection of workers’ rights.

Of particular note, the revised ADGCC now mandates the use of a Dispute Adjudication/Avoidance Board (DAAB) during the performance of the contract. Both the ADGEs and contractors placed an emphasis on dispute avoidance. The ADGCC empowers the DAAB to make decisions which are binding on the parties, unless and until the DAAB is revised in an amicable settlement or an arbitral award.

The recognition of the importance of a balanced risk profile is encouraging. If that same philosophy of fair risk allocation is adopted throughout the procurement and contract administration processes, then this has the potential to significantly change the contracting landscape in Abu Dhabi.

The Dentons team in Dubai was led by partners Suzannah Fairbairn and Dean Ryburn with assistance from senior associate Gabriel Olufemi and associate Melissa Mallon.