Decennial Liability Under UAE Civil Transactions Law: What Contractors And Engineers Need To Know

Decennial liability continues to be a major long-term concern for contractors and engineers involved in construction projects in the United Arab Emirates. Federal Decree by Law No. (25) of 2025 promulgating the Civil Transactions Law (the “New Civil Transactions Law”) replaced Federal Law No. (5) of 1985 concerning the issuance of the Civil Transactions Law of the UAE, as amended (the “Former Civil Transactions Law”), with effect from June 1, 2026. The new legislation retains the basic principle of decennial liability, but sets out more clearly how that liability applies to engineers and how contractors may deal with claims involving subcontractors.

 

Under the Former Civil Transactions Law, decennial liability was principally governed by Articles 880 to 883. The equivalent provisions are now found in Articles 821 to 824 of the New Civil Transactions Law. The relevant provisions must, however, be considered alongside the transitional rules, particularly where construction contracts were entered into before June 1, 2026. The regime covers specified construction works and imposes a statutory 10-year guarantee for serious structural failures and defects affecting the stability or safety of a building or fixed installation.

 

Scope Of Decennial Liability

 

Article 821 provides that where a construction contract involves a building or fixed installation for which the engineer prepared the design and which was constructed by the contractor under the engineer’s supervision, the contractor and engineer are jointly liable for the total or partial collapse of the building or installation occurring within 10 years. The provision also covers defects that threaten the structural integrity or safety of the construction, even where no collapse has occurred. The guarantee period runs from the date on which the employer takes delivery of the works.

 

The significance of the provision is that an actual collapse is not required before decennial liability can arise. Serious defects capable of threatening the structural integrity or safety of a completed structure may fall within the statutory regime even if the building remains standing, provided the other requirements of the law are met. This can be particularly relevant in disputes involving foundations, structural systems and other defects that could compromise the safety or integrity of the completed works.

 

Article 821 also preserves liability where a collapse is caused by a defect in the land on which the structure was built or where the employer authorised construction of the defective structure. At the same time, the provision recognises an exception where the parties intended that the building or installation would remain in place for a period of less than 10 years. The position differs from the Former Civil Transactions Law, which expressly allowed the parties to agree to a period exceeding 10 years. That express provision has not been carried forward into the new law.

 

The Engineer’s Liability

 

The New Civil Transactions Law provides greater clarity on an engineer’s responsibility by linking liability to the work for which the engineer was appointed. Article 822 distinguishes between design and supervision functions. Where an engineer is engaged only to prepare the design of a building or installation, or part of it, the engineer is responsible for defects attributable to that design or construction prepared by the engineer, but not for defects arising from the method of execution.

 

Where the engineer’s appointment is instead limited to supervising execution, or part of it, the engineer is jointly and severally liable with the contractor for defects in execution occurring under that supervision. The distinction is important on projects where separate consultants are responsible for design and supervision, or where an engineer’s role changes during the course of construction.

 

For that reason, the scope of an engineer’s appointment should be recorded with precision. Contractual documents that clearly identify who is responsible for design, supervision and execution can become particularly important when the source of a structural defect is disputed.

 

The new law therefore gives a clearer statutory basis for determining an engineer’s exposure where the appointment is confined to supervision of construction rather than design.

 

Can Decennial Liability Be Excluded Or Limited?

 

Article 823 provides that any condition intended to exempt the contractor or engineer from the statutory guarantee, or to limit that guarantee, is void. Contractors and engineers should therefore examine carefully any contractual wording that seeks to exclude, cap or otherwise restrict decennial liability.

 

A general limitation-of-liability clause should not be assumed to provide protection against statutory decennial liability where the law prohibits such a limitation. Parties can still allocate commercial and contractual risks between themselves, but those arrangements must operate within the boundaries imposed by the mandatory provisions of the New Civil Transactions Law.

 

Article 821 nevertheless contains a specific provision concerning structures that the parties intended to remain for less than 10 years. That provision should be distinguished from a general contractual waiver or exclusion of decennial liability. It does not, by itself, amount to a general right for parties to contract out of the statutory regime.

 

Subcontractors And Recourse

 

The New Civil Transactions Law also addresses an issue of practical importance to contractors: recourse against subcontractors. Article 821(4) provides that the decennial liability provisions do not apply to the contractor’s right of recourse against a subcontractor. The statutory regime governing the contractor’s and engineer’s liability towards the employer therefore does not automatically determine the contractor’s claim against a subcontractor.

 

Where a contractor seeks to recover losses from a subcontractor, the contractor will need to establish the appropriate contractual, fault-based or other legal basis for the claim. The position makes the terms of subcontract agreements particularly important, especially where the subcontracted works could contribute to a structural defect.

 

Subcontracts should therefore address matters such as defective works, indemnities, warranties, insurance, document retention and responsibility for losses arising from subcontracted work. A subcontractor should not simply be assumed to carry the main contractor’s statutory decennial liability because its work contributed to a defect. The contractor’s contractual and other rights of recourse should instead be identified clearly in the subcontract documentation.

 

Limitation Period And Practical Considerations

 

Article 824 provides that a claim under the decennial liability provisions will not be heard after three years from the occurrence of the collapse or the discovery of the defect. The three-year period operates alongside the 10-year warranty period established under Article 821. A qualifying collapse or defect must therefore occur or be discovered within the statutory framework, while the resulting claim must be brought within the applicable three-year period.

 

The new law places renewed emphasis on managing construction risks long after a project has been completed. Contractors and engineers should review their appointments, construction contracts, subcontracts and insurance arrangements against the requirements of the new statutory regime. Particular attention should be given to the division between design and supervision responsibilities, procedures for dealing with structural defects, contractual rights against subcontractors and the scope and duration of insurance cover.

 

Decennial liability should therefore be viewed as a project risk that can continue well beyond practical completion and the ordinary defects liability period. For contractors, engineers and other construction stakeholders, a close understanding of Articles 821 to 824, together with carefully drafted contractual arrangements, will be important in managing potential long-term exposure.