Picture for illustrative purposes only. ARCHIVE

A Dubai commercial court has ordered a construction company to pay Dh28.7 million to a bankrupt electromechanical subcontractor, ruling that the main contractor’s delayed payments forced the smaller firm into financial collapse. The dispute dates back to 2017, when both companies signed a Dh113 million subcontract for electrical, mechanical, and plumbing works on a real estate project. Court documents revealed that the subcontractor completed nearly all the work—between 99 percent and 100 percent—but the main contractor withheld payments and liquidated guarantees without justification. This triggered the subcontractor’s financial downfall, leaving it unable to pay suppliers, employees, and subcontractors. The firm was declared bankrupt in 2022. A court-appointed engineering expert later determined that Dh77.6 million, including VAT, was owed for the completed works. When talks failed, the bankrupt firm sued for the amount plus Dh20 million in damages. The contractor countersued for Dh39.6 million over alleged delays and defects, but a panel of experts dismissed the claim. The court ultimately sided with the subcontractor, ordering the contractor to pay Dh28.7 million in outstanding dues and legal costs. Dr. Alaa Nasr, the subcontractor’s legal representative, welcomed the ruling, saying: “The UAE’s insolvency law is one of the most advanced in the region, ensuring the protection of insolvent companies and safeguarding debtor assets under court supervision.” ICA/Expat Media
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