Construction Retention Release Dispute Dubai: Subcontractor Recovery

A subcontractor that completed a Dubai project eighteen months ago, signed off snags by month nine, and has been chasing the main contractor for retention release ever since recognises this file. Construction is the single largest source of commercial dispute volume in Dubai courts. Retention is typically five to ten percent of contract value, withheld until the defects liability period — twelve months post-handover under standard FIDIC-based UAE construction contracts — has run. The standard contractor playbook to delay release runs through three predictable manoeuvres: alleged defects discovered late, late-completion offsets recalculated after the fact, and unclosed variation claims. The recovery route is well-mapped, but the timing of the filing matters more than the size of the claim.

Why retention release stalls and what the file should already contain

UAE construction law sits inside Federal Decree-Law 50/2022 (Civil Transactions), which superseded the old Federal Law 5/1985. Articles 880 onwards govern contracts of work, including defects liability and the contractor-subcontractor allocation of risk. The decennial liability under Article 880 covers structural defects for ten years from delivery, which is the contractor's exposure window — not the retention period. Retention is contractual, sitting on top of the statutory regime, and the standard FIDIC-based UAE contract releases retention in two tranches: half on practical completion or taking-over certificate, half at the end of the defects liability period.

The file that wins on retention release is the file that already documented every variation, every snag closure, and every certificate of practical completion before the project ended. The contractor's standard delay tactic is to allege a late-discovered defect that conveniently equals the retention amount, or to recalculate liquidated damages for late completion using a baseline that was never agreed in writing. Where the subcontractor has signed taking-over certificates, closed snag lists, and a contemporaneous variation register, those tactics fail at the evidentiary stage. Where any of those documents are missing or unsigned, the dispute moves into mainland court and runs six to eighteen months on contested facts.

Mainland court versus execution court — choosing by file readiness

The decision tree for retention release runs on file readiness, not on claim size. A subcontractor with a signed taking-over certificate, a closed snag register, a clear retention computation, and contractor acknowledgement that retention is due (typically captured in correspondence or a half-released first tranche) can route the file straight to execution court. The execution court does not relitigate the underlying contract; it executes a documented obligation. That is the fast track and runs six to twelve weeks from filing to attachment.

A subcontractor with disputed snag claims, contested liquidated damages, or an unsigned variation register has to route through mainland Dubai or Abu Dhabi commercial courts for substantive determination. The court appoints a technical expert (typically through the Dubai Courts roster of registered construction experts), the expert produces a report on the disputed items, and the judgment follows. That route runs nine to eighteen months on contested facts and is materially more expensive on legal fees. The strategic implication is that retention disputes are won in the file-build phase during the contract life, not in the courtroom afterwards. The free zone versus mainland forum question rarely arises in construction because most Dubai construction projects sit on mainland-registered land with mainland-registered contractors.

Retention recovery routes compared by file readiness and timeline

For a subcontractor with a clean file, execution court direct is the dominant route on calendar and cost. For a contested file, the precautionary attachment route runs in parallel with mainland court substantive determination — the attachment lands on the contractor's receivables from a current project, which tends to surface a settlement before the substantive hearing. Where the original contract has a FIDIC dispute clause electing DIAC (Dubai International Arbitration Centre) arbitration, that is the contractually mandated route and substitutes for the court track. The trap to avoid is the demand-only chasing pattern, where a subcontractor sends letters for two years and watches the 10-year commercial limitation under Federal Law 18/1993 erode the file's evidentiary strength.

Can a subcontractor file directly at execution court for retention release without first going through a mainland court ruling?

Yes, where the underlying obligation is documented and undisputed. The execution court (Mahkamat Al Tanfidh) under Federal Decree-Law 42/2022 enforces existing titles and can act on documented commercial obligations including signed taking-over certificates, partial retention releases, and acknowledged retention balances on the contractor's books. Where the contractor disputes the amount or claims defects-liability offset, the execution court will route the substantive question to mainland Dubai or Abu Dhabi courts for determination first, and execution proceeds only after the substantive judgment. The practical test is whether the subcontractor's file shows an undisputed liquidated obligation — half-released first tranche, contractor correspondence acknowledging the second tranche is due, or a project-account reconciliation showing retention sitting on the contractor's balance sheet. Where any of that exists, execution court direct is the right starting point and saves twelve to eighteen months over the mainland court route.