Dubai court obliges firm to pay Dhs5.2m outstanding amount to subcontractor

Dubai Commercial Court has ordered a contracting company to pay Dhs5.251 million to a subcontractor who had been contracted to construct a 103-storey residential tower, along with 6 basement levels and a ground floor in Dubai Marina.

The company had initially refused to pay the outstanding amount after the project's completion.

According to the case file, the subcontractor filed a lawsuit against the main contractor after signing a contract in 2015 to implement construction works for the project, valued at over Dhs19 million.

The plaintiff affirmed that his company started the agreed-upon work but was later halted by the appellee company, which attributed the stoppage to the project owner.

The plaintiff claimed the appellee owed Dhs17.9 million and sought court to compel payment, including legal interest.

The court appointed a technical expert to review the case and documents, including the contract, final account statement, and other evidence.

The expert determined that the actual amount owed to the plaintiff was Dhs5.251 million.

In response, the appellee company argued that the lawsuit should be dismissed on the grounds that it was filed by a party without legal standing, claiming that the project's actual owner was also the owner of the plaintiff company and that the plaintiff owed the appellee outstanding payments.

The appellee further argued that the lawsuit was premature, citing the principle of “payment upon receipt.”

Dr Alaa Nasr, the legal representative of the plaintiff company, countered that the claim of the lawsuit being filed by a party without legal standing was invalid.

He cited Article 891 of the Civil Transactions Law, which states that a subcontractor cannot claim payments directly from the project owner unless explicitly authorised by the main contractor.

However, Dr Nasr argued that a subcontractor can sue the project owner directly if he is originally a part to the main contract.

The court ultimately ruled in favour of the plaintiff, ordering the appellee company to pay him the outstanding amount of Dhs5.251 million.