News & Insights


Project Cancellation in Dubai

April 7, 2020 / Author: Irfan Ali Thanvi


The UAE witnessed phenomenal economic growth through the establishment of Freehold realty rights through an Amiri decree in 2002. By the fourth quarter of the fiscal year 2007, prices had risen to a world record 79% from the original sale prices. Such profits were, indeed a dream come true for the investors and a source of encouragement for the rest, as no other economy could bring such a fruitful result of a base investment anywhere else in the world. Hitherto, as every matter of life, has a node and an antinode to its climax, every investment is subject to a circuit-breaker, often caused due to foreign influence in our globalized world. 

The UAE Real Estate also became a victim of the 2008 global financial crisis, and the markets indefinitely met a down surged bearish trend, as the collapse of Lehman Brothers in New York, caused a ripple effect around the world, affecting many economies in due course of time. But unlike many other countries, the United Arab Emirates had an excellent course of interaction with its investors. 

First and foremost, the UAE did not abandon their investors throughout the crisis and consequently established a developer-investor caucus and garnered specific measures which enabled the investor confidence glow even after fallout on realty prices. 

Hence, post securing investors through the establishment of escrow accounts, the Real Estate Regulatory Authority (RERA) in conjunction with the Dubai Land Department (DLD) focused on securing this caucus as an exemplary form of public and private cooperation.

Law no. (21) of 2013

Sheikh Mohammed Bin Rashid Al Maktoum issued Decree No. 21 of 2013 concerning the formation of a special judicial committee (Committee) for the liquidation of terminated real estate projects in the Emirate of Dubai and the settlement of relevant dues (Decree).

The law was decreed at a crucial time when the Government of Dubai in general and the UAE at large were discussing plans to protect the legal rights of investors and to secure the best interest of the investor through the legal articulation of the Dubai Real estate law.

The prime focus of the Committee remained to consolidate the process for investors to seek compensation against developers for terminated real estate projects. Furthermore, facilitation of quicker proceedings, mainly since legal proceedings have been not only lengthy but also expensive, have been part of the scope of this Committee.

Hence the core discussion includes:

  • The establishment and authorities of the Committee.
  • Court cases referred to the Committee.
  • The consequences of setting up this Committee.
  • The future functions of the Committee and their bearings on the resultants.

Establishment and authorisation of the Committee

The Committee constitutes of one than one panel, subject to the presence of no less than three judges from the Dubai Courts, including the Chairman. The following jurisdiction defines the scope of the Committee:

  • Evaluate and enact on any disputes, requests and damages that may cause a feud between developers and investors with respect to terminated realty projects.
  • Liquidate realty projects which got terminated under a final resolution issued by the Real Estate Regulatory Agency (RERA) in accordance with RERA’s authority under law no. 13 of 2008.
  • Settlement of debt-laden prospects with respect to terminated projects, post deduction of all liquidation expenses.
  • Monitor all administrative proceedings, complaints and grievances relating to terminated real estate projects.

In promulgating its authority, the Committee was succoured by experts and professionals, of the respective fields. The Committee is further authorised to appoint auditors (at the expense of the developer) for auditing the financial position of the terminated realty project.

The Committee has bestowed a stare-decisive privilege added to its decorum its decisions are ever binding and cannot be challenged in any other court of law.

Court cases referred to the Committee

One of the most significant provisions of the Amiri decree stipulates the jurisdiction of the Committee over all courts in the Emirate of Dubai. This clause may also apply to Free Zones courts like the Dubai International Financial Centre (DIFC), which are no longer authorised to accept the filing of cases or claims relating to terminated realty projects. In addition, the courts are bound to refer to any current cases of terminated projects to the Committee. Cases or demands brought before the Committee are exempted from any court fees. Hence, the doctrine of precedence was subjected to the Ratio decidendi of the Committee, which provided a ‘sigh of relief’ for the concerned parties in the UAE realm of investments.

This particular aspect of the decision gave astounding credence to this law by both the sides, including the investors as well as developers. The latter felt a relieved, as the escrow accounts were already frozen, and the developers were left with no money to construct the projects unless their investors paid them. Hence, a win-win situation for every market player which included construction companies as well.

Initially, the Decree related explicitly to “terminated” projects alone rather than “on hold” projects, which undergo a lot of investigation prior to being cancelled. Through the passage of time and due diligence of RERA, DLD and the Dubai Courts, investors envisioning a return to their investments from developers in projects deemed “On Hold” by RERA were subjected to commence developers through litigation. A later amendment allowed the Committee to handle “On Hold” projects as well.


Ever since its inception, for the past seven years, the Committee dealt with over two hundred terminated real estate projects in Dubai as well as thousands of cases relating to terminated real estate projects currently going through the Dubai courts. The speed through which they enacted is albeit praiseworthy, as quickly and effectively the Committee dealt with such cases through replenishment of confidence in a market which was yet suffering from the wounds of the 2008 crash.

Finally, the Decree is a clear signal to international property investors that RERA is taking practical steps to deal with rogue developers of days gone by, introducing transparency and protection for investors and, in turn, propel Dubai from a market of short term speculators to a more established and stable real estate market for all future to come.


The UAE laws, in general, add to the existence of immense quality to the life of her investors, creditors, developers, residents and citizens. The implementation of law no. 21 of 2013 brought in new hope and determined the second stage of the Dubai Investments, leading to Dubai achieving the Expo 2020 host city status on the 27th of November 2013. Such developments, further garnered towards the intended direction of prosperity, enabling UAE to remain one of the first choice of investors throughout the world.

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