Accelerating scientific and technical developments in the field of construction and design of real estate lead the developers keen to modernize buildings by adding new technologies such as “smart buildings” and artificial intelligence.
Therefore, the construction process became more complicated and many contractors and professionals became more specialized in specific stages of the construction process. Hardly may you find one contractor that could handle the whole construction process, thus in practice contractors used to assign subcontractors to execute specific works in the projects. The parties of constructions increased to include the Employer (the Client – the owner of the project), the Main Contractor, the Consultant, the Developer, and Subcontractors.
A subcontractor is a specifically assigned contractor by the Main Contractor for the execution of a specific part of the project upon the approval of the Employer and acceptance of the Consultant. The main Contractor is not entitled to assign the Subcontractor for the whole works. The Contractual relationship in Sub-Contract is exclusively between the Main Contractor and the Subcontractor. Subcontractors’ works shall be examined and delivered by the Main Contractor and the later shall remain responsible before the Employer for the defaults might be occurred by the Subcontractors who are working under his direct monitoring and supervision.
Although there is no contract signed between the Employer and the Subcontractor, the Subcontractor shall remain responsible before the Employer for his defaults but on non-contractual liability, so how could the Employer claim for losses occurred to him by the defaults of the subcontractor in the absence of any contractual or binding clauses between both of them? The Answer is that: on the basis of tort Liability and Indirect Claim on behalf of the Main Contractor.
Legal Aspects and Proceedings
A default made by the Subcontractor during the execution of works under the Sub- Contract is considered a contractual default which entitled the Main Contractor to claim for compensation against the Subcontractor. However, the Employer as a Creditor to the Main Contractor by the Main Contract is entitled to claim against the Subcontractor by using the Indirect Claim according to article 392 of the Federal Civil Act of UAE No. 18/1993.
Moreover, the Employer is entitled to claim against the Subcontractor on the basis of tort liability. In such case, the Employer shall prove the default or tort of the Subcontractor and the damage occurred to him caused losses, and to prove the linked relationship between the Subcontractors’ defaults and damages occurred to him.
According to article 890, and 891 of the Federal Civil Act of UAE, the Main Contractor is remaining liable before the Employer for any defaults made by the Subcontractor during the period of the execution of the works assigned to the Subcontractor. On the other hand, Subcontractor is not entitled to claim against the Employer unless the Main Contractor subrogated him to do so. Thus in case of lack of this subrogation, the Subcontractor shall not claim against the Employer.
Egyptian legislator entitled the Subcontractor and his staff to claim against the Employer, exceptionally, for his/their due entitlements derived from the Sub- Contract to the limit of the Main Contractor’s Dues under the Main Contract (article 662 of the Egyptian Civil Law). Such article is not mentioned by the UAE legislations.
However by referring to the judgments of the Federal Supreme Court of UAE, a direct relationship might be between the Employer and the Subcontractor in case that the Main Contractor failed to fulfil his obligation under the Main Contract, the Employer is entitled to ask the Subcontractor to complete the works instead of the Main Contractor. Besides, the Main Contractor may agree with the Employer that the Subcontractor shall be responsible directly before the Employer for the assigned works. The Supreme Court considered that as a kind of waiver of the Main Contract either in whole or in part due to the fact that the contractual relationship could be agreed otherwise between its parties.
Conclusion
In conclusion, we could stand on the following facts:
- No direct relation between the Employer and the Subcontractor.
- The Main Contractor is directly responsible for the acts and defaults of the Subcontractor before the Employer.
- The Subcontractor could be responsible directly before the Employer either by direct assignment made by the Employer or by mutual agreement by the Main Contractor and Employer.
