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Choosing Applicable Law in Construction Contracts - the UK, the UAE and the KSA

Janina White

1 Dec 2023

In the intricate realm of construction and engineering contracts, the selection of governing law intricately influences the interpretation and execution of agreements, with profound implications for project dynamics. This journey into the legal tapestry of England & Wales, China, Saudi Arabia (KSA), and the United Arab Emirates (UAE) unveils significant disparities in the freedom to choose applicable law.

The Freedom to Choose Applicable Law

In the kaleidoscope of global construction projects, an 'applicable law' clause is a compass directing the interpretation of contracts. Negotiations often gravitate towards a 'neutral but reliable' jurisdiction, emphasizing clarity in stating applicable law, arbitration agreements, and conflict of laws clauses.

Advice - parties should scrutinize the implications of their chosen law and ensure clarity in articulating the contractual framework.

English Law as the Baseline

The allure of English law in international construction stems from its sophistication, stability, and respect for party autonomy. However, limitations arise, such as the non-extension of the statutory adjudication scheme to projects abroad. Understanding these nuances is essential in negotiations, emphasizing the need for careful consideration of the applicability of English law in foreign projects.

Advice - parties should delve into the specific limitations of English law abroad, ensuring contractual provisions align with their commercial goals.

Unforeseen Consequences – Diverse Limits on the Adoption of Foreign Law


In the realm of Chinese contract law, the freedom to choose foreign laws hinges on specific conditions. Awareness is paramount; parties can choose foreign laws if one party is foreign, the contract's subject matter is abroad, or obligations triggering events occur outside China. Advice - thorough knowledge of local laws is crucial for effective negotiation, ensuring that the chosen foreign law aligns with the project's unique circumstances.


Sharia law underpins legal systems in the UAE and KSA, allowing negotiation of terms within its bounds. Prohibitions on specific activities are non-negotiable, requiring meticulous attention during contract negotiations.

Advice - parties should navigate Sharia law constraints prudently, considering the implications of prohibited activities and seeking expert advice to align contracts with legal requirements.

Constraints on the Scope of Law Applying to Performance

Even with the freedom to choose applicable law, local laws often wield authority in shaping contractual obligations.


Mandatory requirements, like minimum warranty periods and quality supervision for specific projects, are non-negotiable under Chinese law.

Advice - parties should be aware of these mandatory provisions, integrating them into their contractual framework and ensuring compliance with local regulations.


In civil law countries like the UAE and KSA, the principle of good faith permeates contracts, impacting various aspects of construction projects.

Advice - parties should navigate good faith obligations diligently, understanding their influence on matters such as project intervention, contract termination, and claiming pre-agreed sums.

General Guidance

Choosing applicable law demands a nuanced approach, considering not only the chosen laws' intricacies but also the potential impact of mandatory legal requirements. Assumptions about universal applicability must be avoided, ensuring a comprehensive understanding and strategic negotiation for successful project outcomes.

Advice - prudent parties invest in legal expertise, conducting thorough due diligence to align contractual frameworks with the intricacies of their chosen jurisdictions.


  • Applicable Law Importance: The 'applicable law' clause is pivotal for contract interpretation, emphasizing clarity in articulating contractual elements.

  • English Law Nuances: While English law is a popular choice globally, parties must navigate limitations abroad, aligning provisions with commercial goals.

  • Chinese Jurisdiction Conditions: China imposes specific conditions for choosing foreign laws, necessitating awareness of local laws for effective negotiation.

  • Sharia Law Impact: In the UAE and KSA, Sharia law underpins legal systems, requiring careful consideration of prohibitions during contract negotiations.

  • Mandatory Requirements in China: China's non-negotiable mandatory requirements, like minimum warranty periods, shape contractual obligations.

  • Good Faith Principles in the UAE and KSA: Good faith principles impact various aspects of construction projects in civil law countries, influencing project dynamics.

  • Comprehensive Understanding: Prudent parties invest in legal expertise, conducting due diligence to align contractual frameworks with chosen jurisdictions.

Janina is a solicitor registered in England and Wales, and the Republic of Ireland, and a member of the American Bar Association. Her extensive legal expertise spans Corporate Law, Sanctions, and Corporate Governance. Beyond law, Janina is a Chartered Company Secretary and showcases a passion for global cultures, evident in her fluency in eight languages. Advising multinational giants, her unique blend of legal acumen and cultural insight sets her apart, offering readers a rich, global perspective on her subjects. Janina is also a private investigator and a member of the Association of British Investigators and she is actively using the investigative techniques (including the use of the Artificial Intelligence, OSINT and HUMINT)  in her legal work. You can contact Janina by email

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