Alongside these issues, the Yellow Book Subcontract is relatively new, and so there has been little use of this form so far. However, we note that where a standardised approach by reference to best practice is called for, such as in government tender opportunities, the form would be well suited for use in this region, particularly since there is already familiarity with use of the FIDIC forms in the market.
The payment terms under the subcontract also reflect local market practice, since 'pay when paid' terms are market practice in the region. In the UAE, such practice is supported by article 891 of the Civil Transactions Code, which restricts claims from being made against an employer by any subcontractors unless such a right was assigned to them by the main contractor. This is very different from the position in the UK, where such practice is prohibited under the Construction Act.
Over the past 20 years, construction in the UAE has grown rapidly. The adoption of FIDIC standardisation of contraction contracts, along with the more recent development of a more standardised approach to procurement - exemplified by the new 'In Country Value' scheme in Abu Dhabi - has shifted the approach to projects initiated by government entities. The focus is now a more structured and uniform one which reflects best practices and standards, simplifies the tender assessment process and supports local businesses, ultimately increasing the ease of doing business and attracting further investment into the region.
Since the Abu Dhabi government already uses its own bespoke licensed FIDIC forms, the adoption of the Red Book and Yellow Book Subcontracts seems like a natural next step.
Use in Asia
Similarly, there has as yet been no indication of a widespread use of the Yellow Book Subcontract in Asia. Again, this has more to do with the fact that this form has only just been recently launched than its suitability for the Asian market: in fact, we can anticipate increased usage of the FIDIC standard forms generally, including the new subcontract, on the back of 'Belt and Road Initiative' (BRI) projects and other Chinese-led international investment projects.