UAE Law and Practice Contributed by: Arsalan Tariq, Nil Acar and Ahmed Kamran, BSA LAW
procurement process and publishes project pipelines to attract both local and international investors. In Dubai, PPPs are governed by Dubai Law No 22 of 2015, with the Department of Finance (DOF) serv- ing as the key granting authority in co-ordination with sector-specific government bodies (such as RTA for transport and DEWA for utilities). Projects require approval from the Supreme Committee for PPPs in Dubai for large-scale or strategic initiatives. PPP projects are typically structured through con- cession agreements, availability payment models or build-operate-transfer (BOT) schemes. SPVs are commonly used to ring-fence project risks and liabili- ties. Approval processes often require co-ordination across multiple authorities, particularly where land use, foreign ownership or sector-specific licensing is involved. 8.3 Governing Law In the UAE, project documents such as construction contracts, power purchase agreements (PPAs), and offtake agreements are not mandatorily required to be governed by UAE law. Parties are generally free to choose a foreign governing law, commonly English or New York law and international arbitration as the dispute resolution mechanism, particularly in large- scale, cross-border project finance transactions. This flexibility is grounded in the principle of freedom of contract under Federal Law No 5 of 1985 (the Civil Code), provided that the choice of foreign law does not contradict UAE public order or morality and the subject matter is commercial in nature. However, there are exceptions where UAE law may apply mandatorily. These include contracts related to UAE real estate and employment relationships. Addi- tionally, contracts involving sovereign assets, infra- structure concessions or state-owned entities may be subject to Emirate-level rules requiring the application of UAE law or resolution of disputes in local courts. In practice, many transactions adopt a split-documen- tation approach, with finance documents governed by foreign law, while project security documents are governed by UAE laws (eg, mortgages, pledges over local assets) to ensure validity, perfections and enforceability.
International arbitration is widely used in UAE-based project finance transactions. The UAE is a party to the New York Convention (1958), and foreign arbitral awards are recognised and enforced under Federal Law No 6 of 2018 on Arbitration, subject to compli- ance with UAE public policy and procedural safe- guards. Arbitral seats such as DIFC, ADGM, London, Paris and Singapore are frequently selected, espe- cially in contracts involving international sponsors, EPC contractors or lenders. Parties may also opt for DIFC or ADGM courts as the forum for resolving disputes. These courts apply common law and permit the use of English law-gov- erned contracts. Judgments issued by DIFC or ADGM courts are enforceable onshore through co-operation protocols with the UAE local judiciary. This mecha- nism offers greater predictability, procedural efficiency and international investor confidence – making it an increasingly popular choice in UAE project finance transactions. 8.4 Foreign Ownership In most government-led or PPP projects in the UAE, land ownership is not transferred to the project com- pany or foreign investor. Instead, land use rights are typically granted through concession agreements, usufruct rights or long-term lease arrangements, depending on the Emirate and the nature of the pro- ject. The underlying land remains owned by the govern- ment or a government-related entity, including in structures where the project company is a joint ven- ture between a state-owned entity and a foreign inves- tor. This approach ensures that the sovereign owner- ship of land and strategic assets is preserved, while allowing private and foreign participants operational control for the duration of the project term. Water access, utility connections and subsurface usage (if applicable) are generally addressed within the concession or usufruct agreement, rather than being treated as stand-alone proprietary rights. For- eign sponsors typically hold long-term rights of occu- pation and use, sufficient for financing purposes, but without acquiring title to the land itself.
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