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20 June 2019
The International Chamber of Commerce Commission recently published a 2019 update to its report on construction industry arbitration, focusing on recommended tools and techniques for effective management.
The report is a helpful reminder for practitioners and arbitrators of the procedural mechanisms available which are particularly relevant to the conduct of arbitration in the construction sector, especially given some of the characteristics of construction arbitration. Some of the highlights of the report are discussed below.
A common feature of the standard form engineering contracts is the provision for pre-arbitral dispute resolution steps. For example, since 1995, the International Federation of Consulting Engineers conditions have provided for the appointment of a dispute adjudication board, and for parties to refer any disputes to the board before proceeding to arbitration.
Such pre-arbitration steps have several benefits, including:
However, practitioners must be aware of the jurisdictional risks they can pose. A tribunal appointed before any pre-arbitral steps have been completed will usually face a challenge to its jurisdiction, delaying proceedings and introducing avoidable uncertainty and cost to the arbitration.
The report notes that a tool commonly seen in construction arbitration is a schedule identifying each item complained of and the precise legal basis for each complaint. This kind of schedule is regularly used and can help the tribunal when dealing with a long list of items on which it is asked to rule. The schedule can focus the minds of the parties and the tribunal on the issues in dispute and identify which items are contested or agreed.
However, the report notes that it is important to clarify the status of the schedule. Unless specifically agreed, the schedule will not supersede or modify the parties' submissions. If they intend for the schedule to stand as an argument, the parties should ensure that it is clearly agreed at the outset to avoid confusion down the line.
Considering the complex matrix of issues which commonly arise in construction arbitration, it is worthwhile to consider whether some or all of those issues can be dealt with separately to expedite the proceedings.
This traditionally involves separating jurisdiction and merits, and then merits into questions of liability and quantum. However, depending on the circumstances of the case, it may also be worthwhile splitting issues according to the parties involved (eg, if there are multiple parties to the arbitration, only some of whom are affected by certain issues) and by the particular issue (eg, issues of waiver or time bars).
The report identifies several factors which practitioners and the tribunal should consider when deciding whether one or more issues should be dealt with separately. However, it is important that in all cases the issues are properly defined beforehand and therefore this question is best examined after the close of pleadings.
The report sets out some helpful pointers on the procedural tools available in construction arbitration. It is a useful reminder for practitioners and arbitrators of the various ways in which those tools can be put to good use to avoid time and cost in what are usually complex, high-stakes arbitration proceedings.
For further information on this topic please contact Ben Grant or James Rogers at Norton Rose Fulbright by telephone (+44 20 7283 6000) or email (firstname.lastname@example.org or email@example.com). The Norton Rose Fulbright website can be accessed at www.nortonrosefulbright.com.
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