Construction law folder

Construction Arbitration

What is construction arbitration?

Arbitration has been a favourite method of resolving disputes in the construction and civil engineering industries for many years, allowing disputes to be resolved by experienced and appropriately qualified experts (as opposed to a judge). A major advantage of arbitration when comparing it to litigation is that it is a procedure held in private.

Strictly speaking, Arbitration is another form of ADR, being an alternative to litigation, but it is a procedure that can only be adopted where the parties have consented, for example by the incorporation of an arbitration procedure within a contract, or by reference to arbitration giving rise to a right to arbitrate under the Arbitration Act 1996. Alternatively, the parties may agree that the best way to resolve a dispute is by the procedure of Arbitration and the rules of that procedure are entered into post contract.

Another major advantage of arbitration is that the procedure is truly international. Parties to a contract can each be based in different parts of the globe (for example, Singapore and Japan), with the subject matter in another part of the world (i.e., Malaysia), whilst the substantive law of the contract (that is the law which is applied to determine the merits of the dispute), the law of the seat (it is the courts of the seat that have the supervisory jurisdiction over the arbitral process, such as appointment of Arbitrators and application to set aside an award), and the law of the arbitration agreement (governing the formation, interpretation and enforcement of the arbitration agreement), could all be different from the parties home countries and the country of the subject matter. The New York Convention enjoins signatory states to observe arbitral awards made in other countries and as such the parties do not have to be domiciled in any particular country or state to enjoy the arbitral procedure.

Unlike statutory adjudication, an arbitration Award is final, save for very limited rights of appeal. Another major advantage of arbitration when comparing it to litigation is that it is a procedure held in private and the procedure and costs are able to be more effectively controlled, however a judge in a court is free, whereas an arbitrator charges a fee which is based on time and is paid by one or both parties, as the Arbitrator decides. If the dispute is uncomplicated the speed of proceedings is likely to short as there are obligations by all involved to save on costs.

Construction arbitration solicitors

To refer a dispute to arbitration, it is a pre-requisite that there is an arbitration agreement in writing, and in order to determine whether there is an arbitration agreement in place, certain components in the agreement are required to be present. We are able to advise whether a valid arbitration agreement exists.

Further, we are also able to draft an arbitration agreement for a current or future contract. If an arbitration agreement exists, the terms may stipulate what the procedure is to appoint an arbitrator; alternatively the Arbitration Act 1996 gives a default procedure. Once an arbitrator/s is appointed, he / she will set the timetable and procedure including instigating any provisions of the arbitration agreement, and this will then be managed to a conclusion, right through to the Award.

At Michael Gerard Solicitors, we are able to manage the whole arbitration process, from appointing an arbitrator, representing a party in arbitration proceedings, to enforcement of an Award or, if necessary, challenging the Award.

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