Dubai Issues New Law on Dispute Resolution for Citizen Housing Construction Contracts

On 21 July, 2025, His Highness Sheikh Mohammed bin Rashid Al Maktoum issued a landmark law aimed at streamlining the resolution of disputes related to the execution of citizen housing construction contracts in Dubai. The law will come into force on 1 January 2026 and reflects the Emirate’s strategic focus on strengthening alternative dispute resolution (“ADR”) mechanisms in the construction sector.

The legislation establishes a specialised branch within Dubai Courts’ Centre for Amicable Settlement of Disputes, that is tasked with managing disputes related to citizen housing construction contracts, offering a fast-track mediation process. Mediation must be initiated and concluded within 20 days, extendable by mutual consent for another 20 days. If mediation fails, the case will be referred to a dedicated committee, comprising one judge and two industry specialists, which must issue a decision on the matter within 30 days. This period may also be extended by a further 30 days. Parties retain the right to appeal committee decisions to the Court of First Instance within 30 days of the decision.

This law is designed to safeguard the interests of all parties while ensuring that housing projects for Emirati citizens are not delayed due to contractual disagreements. By prioritising amicable and consensual solutions, the law encourages continuity in contractual relationships and reduces the adversarial burden on courts.

The law also signals a shift in risk management practices, with greater emphasis on early engagement and documentation that supports mediation.

While the law has been announced and is expected to take effect on 1 January 2026, its full text is yet to be published in the Official Gazette. As such, key questions remain, notably whether the law will apply retrospectively and whether it will automatically govern all UAE citizen housing construction contracts.

Contractors, consultants and developers involved in citizen housing projects will nevertheless need to prepare for a more collaborative dispute resolution environment and should consider the following actions to prepare for compliance with the new law:

• ensure citizen housing contracts are compatible with the new ADR framework;
• incorporate clauses in contracts that facilitate mediation and align with the procedural timelines set out in the law; and
• train project managers and in-house legal teams on the new dispute resolution pathway to avoid procedural missteps.

Overall, this expedited method of trying to resolve disputes is a welcome addition to Dubai’s construction sector, which continues to see rapid and extensive housing projects to cater for the increasing population. Although, absent further enactments, housing building contracts not involving UAE nationals remain outside the scope of the new law.