Arbitration

Privately resolve disputes

Arbitration is the private sector equivalent of litigation. Before the advent of adjudication in the UK it was the method used to resolve the vast majority of construction related disputes and still remains the most favoured process for settling international construction disputes. Advantages and disadvantages of arbitration therefore have to be viewed in a domestic and international context although many aspects are common to both.

In the UK arbitration is regulated by the Arbitration Act 1996. Arbitration is a finally binding dispute resolution process with limited grounds for appeal.

Arbitration is more flexible than litigation. Procedures may be varied by the parties to suit the size and complexity of their dispute. A small dispute may be heard on the basis of documentary submissions alone which can reduce the costs significantly. More complex disputes will usually have a hearing in which the evidence put forward by each party is tested by cross-examination.

An arbitratorsí decision is known as an Award and if required, can be enforced via the courts in the same manner as a court judgment.

A recognised benefit of arbitration is that the parties are able to select an arbitrator of their choice, usually someone with particular expertise in the subject matter of the dispute. Combine this with confidentiality and the relative ease with which an arbitration award can be enforced in other legal jurisdictions and you have the key reasons why arbitration is such a popular form of dispute resolution in international construction contracts.

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