What’s in a Clause: What to Consider when Adopting an Arbitration Clause in Construction Contracts

Many in the construction sector are hesitant to dwell on dispute resolution clauses.  After all, when your goal is to build something together, anticipating conflicts at the outset of the relationship can feel unseemly.  But this hesitance relies on a misconception of what dispute resolution is: it isn’t the anticipation of conflicts, but instead the development of proactive systems to work through those conflicts with minimal disruption much in the same way that change orders or design modifications are managed in the ordinary course.  Proactive management of the dispute resolution process thus is not only consistent with a collegial working relationship but is imperative to achieving the environment of collaboration and partnership that are at the core of so many projects.

There are a myriad of popular form contracts in the construction sphere, including AIA and ConsensusDocs domestically and, internationally, the JCT, NEC, and FIDIC suites.  The benefit of relying on such contracts is obvious: their mechanisms and allocations of risk are widely understood, relieving the parties of the need to debate routine provisions.  But dispute resolution, although often considered such a provision, is anything but routine.  The dispute resolution clause can be one of the most important provisions in a contract, and even minor changes can significantly impact the course of a project and the cost, duration, and inconvenience of any resulting disputes. Jurisdictional and geographic variations can further modify the impact of even standard language.  In fact, dispute resolution clauses are one place where it is most important for a contracting party to be proactive in ensuring that its interests are met. Although the benefits of form agreements are manifest, it would be ill-advised to sign off on a dispute resolution provision without at least considering its material terms.  There is no one-size-fits all solution, but the following are some of the key issues that warrant consideration.

Continue reading “What’s in a Clause: What to Consider when Adopting an Arbitration Clause in Construction Contracts”

Expedited Arbitrations: Can We Learn Anything from Adjudications?

By Luis Duhart

Introduction

Construction projects are a ripe ground for disputes. When these disputes arise, they often threaten to bring the project itself to a halt if not resolved expeditiously. However, many large-scale construction projects (particularly international ones) provide for their disputes to be referred to arbitration. Continue reading “Expedited Arbitrations: Can We Learn Anything from Adjudications?”

Construction, Engineering and Energy Trends Across the Globe

Problems will inevitably arise with complex large infrastructure projects. Understanding the underlying reasons and what the root causes are will perhaps aid in the process of reducing conflict.

Recently a paper was published in Construction Law (August 2021) (co-authored by my colleague Tanya Chadha, and with contributions from US partners Brad Thompson and Jeffrey Hamera, and Paul Mansell of HKA) (“The root cause of evil!” Construction Law, August 2021). An analysis was undertaken of HKA’s integrated research program that collects data on global claims/ disputes across 88 countries. An examination was undertaken of trends emerging across the UK, Middle East, US, Caribbean and Latin America.

To read the full text of this post by Duane Morris partner Vijay K. Bange, please visit the Duane Morris London Blog.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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