By Dr. Abdultaiyab Bahrainwala, Partner, Head of Corporate, and Jouslin Khairallah, Founder & Managing Director, Head of Litigation.
What a 2026 Dubai Court of Appeal judgment teaches owners, contractors and consultants about delay, defects, payment claims and proof
The central lesson In a construction claim, the contract frames the rights, but contemporaneous records and technically sound expert evidence often determine the result.
When a Building Project Becomes a Legal Dispute
A construction dispute rarely begins in court. It usually develops through missed milestones, incomplete work, disputed variations, unpaid certificates, alleged defects and increasingly tense correspondence. By the time proceedings commence, both parties may believe the same project history proves the opposite conclusion. The owner sees abandonment and loss. The contractor sees unpaid work and interference. The consultant may be accused of failing to supervise, even where no evidence establishes misconduct.
Dubai Court of Appeal Commercial Appeal No. 892 of 2026, decided on 27 August 2026, offers a useful illustration of how the court approaches that conflict. The dispute arose from a contract dated 17 February 2022 for the construction, completion and maintenance of a private villa in Al Awir, Dubai. The agreed lump-sum price was AED 2.2 million, and the contractual period was 14 months, running from 21 February 2022 to 20 April 2023. The owner alleged delay, incomplete work and technical defects and sought substantial compensation against both the contractor and the engineering consultant.
The judgment is important not because every construction dispute will produce the same financial outcome, but because it shows the evidential structure the court may use: identify the contractual obligations, determine what happened on site, assess whether delay or stoppage is attributable to a party, evaluate the work and defects, and then settle the parties’ accounts on the evidence.
The Dispute and the Competing Claims
The owner claimed AED 848,383.75 for material and moral damage said to have resulted from breaches by the contractor and consultant, together with 5 per cent interest. The owner also challenged an earlier engineering expert’s conclusions and asked for another expert to investigate the technical issues and settle the account.
During the first-instance proceedings, the court appointed an engineering expert. The contractor then brought a counterclaim for AED 57,591, representing the alleged unpaid balance for works carried out. After an original and supplementary expert exercise, the Court of First Instance terminated the construction contract, awarded the owner AED 30,000 plus interest against the contractor, and awarded the contractor AED 21,667.50 on its counterclaim.
The owner appealed. Among other matters, the owner argued that the compensation was inadequate, the expert’s calculations were unreliable, and an accounting expert should be appointed to examine payments and tax invoices. The Court of Appeal accepted the appeal in form and reconsidered the issues within the scope of the challenge.
What the Expert Evidence Established
The Court of Appeal placed substantial weight on the court-appointed engineering expert’s original and supplementary reports. The expert had reviewed the documents submitted by the parties, inspected the project site in their presence on 11 June 2025, considered their arguments and objections, and recorded the physical state of the works.
According to the judgment, the works had been stopped for approximately one year at the time of inspection, no workers or technicians belonging to the contractor were present, and the site remained in the contractor’s possession. The expert attributed the delay and stoppage to the contractor without a valid justification and assessed completion at 91.42 per cent. The expert also assessed AED 88,000 as compensation for delay and AED 31,200 for defects and technical observations. Following the account reconciliation described in the judgment, the expert concluded that AED 66,332.50 was due from the contractor to the owner.
Just as importantly, the expert found no breach or default by the project consultant. The court also found no evidence of fraud or collusion by the consultant. This distinction matters. A consultant is not automatically liable merely because the project experienced delay or defects. Liability must be tied to a proven contractual or professional failure and a causal link to the claimed loss.
Why the Court Accepted the Expert Reports
The court reaffirmed a practical principle frequently encountered in technically complex litigation: evaluation of a court-appointed expert’s work forms part of the trial court’s assessment of evidence. A court may rely on an expert report when it is satisfied that the report is reasoned, supported by the record and capable of sustaining the result. When the court adopts the expert’s reasoning, it is not required to answer every objection separately if those objections do not undermine the expert’s conclusions.
That does not make expert evidence immune from challenge. It means that a successful challenge must be precise. General assertions that the expert was wrong, unfair or insufficiently generous are rarely enough. A party should identify a specific methodological error, omitted document, incorrect measurement, contractual misinterpretation, unsupported assumption or mathematical inconsistency, and should explain how correcting it would change the outcome.
Here, the court considered that the expert had inspected the site, reviewed the documents, addressed the parties’ positions and responded to the owner’s objections. It therefore found no need to return the matter to the same expert or appoint a new expert. The existing record was sufficient for the court to decide the dispute.
Termination Does Not Erase Work Already Performed
The judgment also explains an important feature of construction contracts. A construction contract is a continuing contract. Its termination does not retrospectively erase the works already performed. A contractor’s claim for the value of completed work is therefore treated as enforcement of rights arising from performance, not simply as an automatic consequence of termination.
This is why construction disputes usually require a final account rather than a one-directional damages calculation. The court must consider the value of compliant work, payments made, unpaid entitlements, delay consequences, rectification costs and other proven adjustments. A serious claim should therefore present a transparent reconciliation that allows the court and expert to trace each item to the contract and supporting record.
The Court of Appeal Outcome
The Court of Appeal modified the first-instance judgment. It rejected the contractor’s counterclaim and ordered the contractor to pay the owner AED 66,332.50. It otherwise upheld the judgment, including the rejection of the claim against the consultant. The contractor was also ordered to bear the appropriate costs of both levels of litigation and AED 1,000 in legal fees, while the appeal security was forfeited.
The outcome demonstrates that an appeal can materially alter the financial reconciliation without reopening every technical question or appointing a new expert. The appeal court was able to adopt the evidential foundation it considered reliable while changing the legal and accounting result flowing from it.
Practical Lessons for Owners
Owners should not wait until litigation to build the evidential record. Progress photographs should be dated and linked to contractual milestones. Payment records should identify the relevant certificate, invoice or stage. Notices of delay, default, suspension and termination should comply with the contract’s notice provisions. Defect lists should state the location, nature and proposed method of rectification, ideally supported by an independent technical assessment where the issue is disputed.
An owner who engages replacement contractors should preserve quotations, scopes, invoices and proof of payment. It is also important to distinguish the reasonable cost of completing unfinished work from the cost of improving or changing the original design. Courts and experts will look for causation and proof, not merely a global estimate of frustration or inconvenience.
Practical Lessons for Contractors
Contractors should maintain approved drawings, programmes, daily site records, inspection requests, variation instructions, material approvals and records of events affecting progress. If delay is caused by late approvals, owner changes, access restrictions, non-payment or another external event, the contractor should issue the required notice promptly and explain the effect on time and cost.
A counterclaim for an outstanding balance should be supported by a complete account: the original contract sum, approved variations, certified work, payments received, retention, deductions and the exact balance claimed. A figure unsupported by traceable records is vulnerable, especially where the same project also involves defects or delay.
Practical Lessons for Consultants
Consultants should define their supervision and certification duties carefully and retain records showing how they were performed. Site reports, instructions, inspection outcomes, responses to technical submissions and payment-certification files can be decisive if allegations later arise. The judgment is a reminder that the existence of defective or delayed works does not, without more, establish consultant liability. A claimant must prove the consultant’s own breach and the loss caused by it.
How to Prepare for a Court Appointed Expert
The expert stage should be treated as a central part of the case, not an administrative interruption. The submission should begin with a short contractual chronology and a clear statement of the issues the expert is asked to examine. Documents should be indexed and cross-referenced. Calculations should be reproducible. Site access should be arranged, and the legal team should coordinate with an independent technical adviser where specialist issues require explanation.
Objections to a preliminary report should be focused and supported. If the expert overlooks an approved variation, the objection should identify the instruction, date, value and consequence. If a measurement is disputed, the competing measurement and methodology should be supplied. If the report combines unrelated heads of loss, the objection should show the correct contractual treatment. Precision gives the court a reason to intervene; repetition does not.
Contract Drafting Can Reduce the Dispute Before It Begins
The best construction dispute strategy often starts with a better contract. The agreement should define the scope and hierarchy of documents, completion date, extension-of-time mechanism, variation procedure, certification process, payment timetable, retention, defects obligations, suspension rights and termination consequences. It should also allocate responsibility for approvals, design information, authority requirements, access and unforeseen conditions.
Equally important, the dispute-resolution clause should match the project’s value and complexity. Parties should understand whether disputes will go to the UAE courts or arbitration, what law governs, whether pre-action steps apply, and how notices must be served. Clear drafting cannot prevent every disagreement, but it narrows the questions that an expert and court must later resolve.
Final Takeaway
Commercial Appeal No. 892 of 2026 shows that construction litigation turns on disciplined proof. The court distinguished termination from payment for work already performed, relied on technically supported expert findings, rejected an unsupported counterclaim, and declined to impose liability on a consultant without evidence of breach, fraud or collusion.
For project participants, the message is direct: preserve the project record, comply with contractual notice mechanisms, quantify claims transparently and approach expert proceedings with the same care as the final hearing. In construction disputes, the party with the clearer evidence usually gives the court the clearer path to judgment.