Decennial Liability and Subcontractors under the New UAE Civil Code: Articles 821 to 824

How Will the New Civil Code Change Decennial Liability for Subcontractors in UAE Construction Contracts?

Decennial liability is one of the most important mandatory risk regimes in UAE construction law. It exposes the contractor and supervising engineer to joint liability for serious structural defects for a period of ten years from handover. Under Federal Law No. 5 of 1985 ("1985 Civil Code"), this regime has long been understood as applying to the relationship between the employer, on the one hand, and the main contractor and architect or supervising engineer, on the other.

On 1 June 2026, Federal Decree-Law No. 25 of 2025 ("New Civil Code") will take effect, replacing the 1985 Civil Code in its entirety.

The New Civil Code largely preserves the existing decennial liability framework, but clarifies that it does not apply between main contractor and subcontractor. Instead, the strict statutory regime remains confined to the employer's claims against the main contractor and engineer.

For main contractors, the point is straightforward: exposure to the employer remains, but recovery from subcontractors must be dealt with contractually. The statutory regime will not simply flow down automatically.

The Current Position under the 1985 Civil Code

Under Articles 880 to 883 of the 1985 Civil Code, the contractor and supervising architect or engineer are jointly liable to the employer for ten years from delivery of the works. The liability applies where the building suffers total or partial collapse, or where a defect threatens the stability or safety of the structure. It is strict liability: the employer does not need to prove fault or negligence, and liability may arise even where the defect relates to ground conditions or where the employer approved the defective works.

The regime is mandatory. Article 882 of the 1985 Civil Code provides that any agreement purporting to exempt or limit the contractor's or architect's decennial liability is void (the "Anti-Exclusion Rule"). Article 883 provides that claims must be filed within three years of the collapse or discovery of the defect. The defect must therefore arise within the ten-year period, with proceedings brought within the separate three-year claim window.

Importantly, decennial liability has not generally been treated as applying directly to subcontractors. The main contractor remains responsible for the acts and omissions of its subcontractors and should require indemnities from them in respect of any liability the main contractor incurs.

The New Civil Code: Continuity and Clarification

The New Civil Code largely preserves the existing decennial liability regime under Articles 821 to 824. Although those articles sit within the muqawala provisions, which are generally understood to operate as default rules capable of contractual variation, decennial liability remains mandatory. The Anti-Exclusion Rule is preserved within Articles 821 to 824, so any agreement seeking to exempt or limit the contractor's or engineer's decennial liability remains void.

The core elements also remain familiar: a ten-year liability period, a three-year limitation period following discovery, and joint and several liability of the main contractor and engineer for total or partial collapse and defects threatening structural stability or safety. For these purposes, the New Civil Code refers to the "engineer" rather than the "architect", better reflecting current market practice and the terminology commonly used in FIDIC-based contracts. It also clarifies more expressly the joint and several nature of the contractor-engineer liability to the employer.

The key clarification is the treatment of subcontractors. The New Civil Code expressly excludes the decennial liability rules from the contractor-subcontractor relationship and limits them to the relationship between the employer, on the one hand, and the main contractor and engineer, on the other. A subcontractor is therefore not subject to strict decennial liability merely because the main contractor has incurred such liability to the employer.

What Does This Mean for Main Contractors and Subcontractors?

The practical effect is that the main contractor remains liable to the employer, but cannot rely on the statutory decennial regime to pass that liability down to the subcontractor. A contractor seeking recovery from a subcontractor must establish a contractual or fault-based claim.

The distinction is important. The employer does not need to prove fault against the main contractor or engineer. The main contractor, by contrast, will ordinarily need to prove breach of subcontract, defective work, non-compliance with specifications, or some other act or omission by which the subcontractor caused or contributed to the relevant defect. The subcontractor's exposure is therefore contractual risk, not strict decennial liability.

This clarification aligns the statutory regime with commercial reality. The employer looks to the main contractor, and the main contractor looks to its subcontractors under the subcontracts. If a subcontractor contributes to a structural defect, the main contractor should have a route of recovery, but that route must be addressed in the contract and proven.

The Limitation Problem for Main Contractor Recovery Claims

The clarification creates an important timing issue. Decennial liability can arise many years after handover. A defect may appear in year eight or nine of the ten-year period, and the employer may then have a further three years to bring a claim.

By contrast, a main contractor's claim against a subcontractor is likely to be governed by the ordinary limitation period applicable to commercial claims. Commentary notes that this is generally five years and may run from subcontract completion or from when the relevant obligation was performed. This creates a potential mismatch. By the time the employer brings a decennial claim against the main contractor, the main contractor's recovery claim against the subcontractor may already be time-barred.

This is likely to become one of the key practical issues under the New Civil Code. Main contractors should not assume that liability can be passed down simply because the defect originated in subcontracted works. They must ensure that subcontracts contain appropriate indemnities, warranty periods, insurance obligations, document retention obligations, and limitation wording to preserve recovery rights for as long as possible.

Interaction with FIDIC and Back-to-Back Subcontracts

FIDIC forms of contract are widely used in UAE construction projects and are frequently paired with back-to-back subcontracts. The main contract will often impose decennial liability exposure on the contractor by operation of UAE law, even if the contract itself does not reproduce the statutory wording. The subcontract, however, may not adequately mirror that exposure.

Under FIDIC-based procurement, subcontracts should contain clear indemnities for losses arising from defective subcontract works, including losses connected with employer decennial liability claims. As such, back-to-back drafting should not simply incorporate the main contract by reference. It should expressly address decennial liability exposure, indemnities, cooperation in defending employer claims, document retention, insurance, and the time period for bringing claims.

Practical Implications for Employers, Contractors, and Subcontractors

For employers, the New Civil Code does not dilute the core protection of decennial liability.

For main contractors, the clarification is more demanding. The main contractor remains strictly liable to the employer but must prove a separate contractual or fault-based basis to recover from subcontractors. This makes subcontract drafting and records management critical. Contractors should ensure that subcontracts include robust indemnities, extended warranty obligations where enforceable, insurance requirements, and cooperation duties.

For subcontractors, the New Civil Code provides welcome confirmation that they are not directly subject to the strict decennial liability regime in their relationship with the main contractor. That does not mean they are insulated from claims. Their exposure will depend on the subcontract terms, the quality of their works, and the extent to which the main contractor can prove breach, causation, and loss.

Conclusion

The New Civil Code does not revolutionise decennial liability. It preserves the core ten-year strict liability regime that has long applied to contractors and engineers in the UAE. What it does do is clarify the position of subcontractors.

That clarification matters. Decennial liability remains an employer-facing statutory regime. It does not automatically apply between main contractor and subcontractor. A main contractor who wants to recover from a subcontractor must rely on the subcontract and must be able to prove breach, causation, and loss within the applicable limitation period.

For all stakeholders, the message is clear. Employers can continue to rely on the statutory decennial regime. Main contractors should review subcontract templates, indemnities, insurance requirements, and limitation provisions. Subcontractors should understand that, although strict decennial liability does not apply to them directly, carefully drafted subcontracts may still create substantial long-tail exposure. All of this should be addressed before the New Civil Code takes effect on 1 June 2026.

This article is for general information only and does not constitute legal advice. Independent legal advice should be sought in relation to any specific matter.