WEATHER-RELATED DISRUPTIONS IN UAE CONSTRUCTION: LEGAL INSIGHTS AND RIGHTS
22 April 2024
Manasi Dicholkar
Severe weather events have
recently swept across the UAE, unleashing thunderstorms and prolonged rainfall,
prompting red alerts from the National Centre of Meteorology.
Dubai: This extreme
weather has wreaked havoc on numerous construction projects throughout the
region, causing extensive flooding and wind damage, and subsequently leading to
potential delays in scheduled activities.
While the peak of the storms may
have subsided, the lingering impact on these projects remains a concern, with
ongoing debates about whether contractors or employers should bear the cost of
delays and associated financial losses.
Contractual Provisions for
Weather Impacts
In the realm of construction,
it's common for contracts to predefine the distribution of risks associated
with adverse weather. The FIDIC’s Conditions of Contract are frequently
employed, which generally allow contractors extensions due to delays caused by
"exceptionally adverse climatic conditions." However, these contracts
typically do not provide direct entitlements for financial compensation.
For instance, FIDIC's 1999 Red
Book Clause 8.4 acknowledges the extension of completion times due to severe
weather but does not promise monetary claims. Contrarily, Clause 17.4 mentions
that unforeseen "forces of nature" might enable contractors to seek
compensation for losses, designated as "Employer’s Risks."
In UAE practice, it's not unusual
for parties to modify standard agreements or craft bespoke conditions that
alter the default risk allocation, potentially reducing a contractor’s claims
or omitting them altogether.
Legal Perspectives on Force Majeure
and Weather Disturbances
UAE legislation, including
Article 273 of the UAE Civil Code, addresses force majeure events, defining
them as occurrences that render contract performance impossible. Typically,
this results in the contract's termination—often an impractical resolution for
both contractors and employers.
Article 249 of the Civil Code
also plays a critical role, allowing for contractual adjustments in extreme
cases where performance becomes unduly burdensome due to unpredictable,
extraordinary events. This provision mandates a fair renegotiation of terms,
reflecting the shift in circumstances affecting the general public, which could
include severe weather scenarios.
Practical Steps and Strategic
Considerations
Determining whether weather
conditions were "exceptional" and "adverse" requires
contractors to demonstrate a direct causation for project delays or to trigger
specific contractual provisions for monetary recovery. The debate extends to
scenarios where projects delayed by the employer coincide with adverse weather,
potentially entitling contractors to additional time or compensation.
Ultimately, the construction
contract is paramount in determining entitlements due to weather impacts.
Absent explicit provisions, contractors might invoke Article 249 of the Civil
Code under particular conditions.
Insurance Claims
Insurance is a binding agreement between the
insured and the insurance provider to face risks, according to Article 1026 of
the Civil Transactions Law. Damages caused by rain to homes and vehicles are
covered by most insurance policies in the UAE. However, the ability to claim
depends on the wording of your selected insurance policy's coverage and
exclusions. This means that if the policy is comprehensive and includes damages
from rain and natural disasters, these damages will be covered.
Insurance claims for rain-related damages
involves understanding the specific coverage offered by different insurance
policies. Automobile insurance typically covers rain damage, but the extent of
coverage varies, so it's essential to review policy details carefully. In cases
of injuries due to rain floods, seeking compensation through insurance claims,
particularly with features like personal injury protection (PIP) and medical
payments coverage, becomes crucial. Home insurance policies commonly include coverage
for rain damage, safeguarding against property losses caused by adverse weather
conditions, while car insurance policies often offer comprehensive coverage
options against various perils, including rain damage to vehicles. Similarly,
renters insurance provides protection for tenants against rain-induced damages
to their rental properties, ensuring their interests are secured in unforeseen
circumstances. Consulting with insurance professionals can provide clarity on
available coverage options and ensure individuals are adequately protected
against the financial impacts of rain-related damages.
Maximizing Protection
To maximize protection against rain-related
damages, individuals can adopt the following strategies:
- Regular
Policy Review: Periodically reviewing insurance policies ensures that
coverage aligns with current needs and circumstances. Updating policies to
reflect changes in property value or lifestyle can help maintain adequate
protection.
- Enhanced
Coverage Options: Exploring additional coverage options, such as umbrella
insurance or riders for specific perils, can provide supplementary
protection against rain-induced damages beyond standard policy limits.
- Risk
Mitigation Measures: Implementing risk mitigation measures, such as proper
maintenance of vehicles and property upkeep, reduces the likelihood of
rain-related damages and may qualify for premium discounts.
- Consultation
with Insurance Experts: Seeking guidance from insurance professionals
enables individuals to gain insights into available coverage options and
make informed decisions regarding insurance policies tailored to their
unique requirements.
In Conclusion
As the UAE continues to
experience variable and severe weather patterns, understanding the legal
landscape and preparing contracts to address these fluctuations is essential.
Ensuring clear terms and proactive management can protect against unforeseen
disruptions and secure both parties' interests in the volatile climate of
construction and development. Individuals can optimize their
insurance coverage for rain-related damages, ensuring comprehensive protection
against the uncertainties of inclement weather conditions. By leveraging
insights into the factors influencing coverage and adopting strategies to
maximize protection, individuals can safeguard their interests against the
financial repercussions of rain-induced damages effectively. In the
ever-changing landscape of insurance, staying informed and proactive is
paramount to ensuring peace of mind and financial security in the face of
unforeseen events.
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