HOW CAN YOU RESOLVE YOUR CONSTRUCTION DISPUTE?

To answer this question, we need to analyze some of the facts surrounding the Disputes arise out of the construction agreements. Such as the construction projects within the scope of the international private law or conflict of laws that the parties at the dispute have their places of businesses located in different countries.

Natural of construction dispute

The construction disputes mostly are one of the heaviest debates in both ways, in terms of the amount of conflict, and the complexity of dispute. There are a lot of activates involved in construction projects as well as the parties who are conducting these activities. For instance, if we are talking about infrastructure, there are a contractor, subcontractor, suppliers, worker, and employee’s Act. The general tasks which are divided into subtasks are assigned for each party to carry on to form the whole project in the end. The ultimate goal is to accomplish the project in the designated time and according to precise specifications. Otherwise, it means there is a breach and there is a dispute raised. How to resolve this dispute? It would be necessary to review the terms and conditions of the contract and make sure the arbitration clause is included. Otherwise, the local courts will be the competent court to decide the dispute. However, if the arbitration clause is included, then the designated arbitration board legally have jurisdiction over this issue, and it’s the competent institution to decide this dispute. In this case and to determine which party is in a breach, the Arbitral Tribunal must go through examining materials, facts, evidences and in most cases appointing an expert committee to provide a technical report. The complexity of the issues arises out of the construction projects, especially international construction project which is our subject in this article and it needs more than one arbitrator to decide it, and it takes more than the average time that other commercial cases take.

Advice on International construction contract issues and disputes.

International construction projects mainly present a contractual relationship between one or more parties they have their places of business in different states. To overcome issues which may arise out of the interpretation of the contract, technical description, or the procedures, there are numbers of construction agreements forms, one of the conventional construction forms created by FIDIC “International Federation of Consulting Engineers” covered most of the construction branches in 3 publications:

• Conditions of Contract for Works of Civil Engineering Construction: The Red Book (1987)
• Conditions of Contract for Electrical and Mechanical Works including Erection on Site: The Yellow   Book (1987)
• Conditions of Contract for Design-Build and Turnkey: The Orange Book (1995)

These publications are widely used by cross-border companies that are working in construction field as a guide which helps them to draft an entire contract preserving parties’ right and organize the workflow. The construction contract not only covers the legal matters, but it also can be used as an action plan describing the whole project and each stage of it.

The needs to draft a perfect construction agreement is vital as it will determine the status and the statutory of commencing the project and the future of the disputes if there is any and how to resolve it. The legal matters in such agreements are too broad and specifying each relationship involved, and the related governing laws, as well as the jurisdiction which has competence over the project, is a big job to do. To get the job done definitely, one needs to consult with a counsel in-house or another expert attorney. Moreover, most importantly, the council should be aware of the local regulations where the project stands as well as the international private law which organizes and govern part of the contractual relationship.

In all cases, we advise to include a clear and standard Arbitration Clause in any International Commercial Agreement as it will play a golden role in case if any disputes arise.

Courts intervene and support

The court intervention is a common Legal expression used in Arbitration. As we know the Arbitration itself is a private application working independently out of the court’s body. However, to keep the arbitration process within the boundary of justice and to watch over it, most of the countries have promulgated and applied (the Arbitration Act) which is a national statutory aim to govern the headlines of the arbitration process and keep it under the jurisdiction of the state, meanwhile maintaining its independence and individuality. In parallel, the international laws which govern the arbitration process and state the fine details on how to pursue its regulations allow the courts to intervene under certain conditions. This intervention could result in ordering anyone to attend a hearing for the purpose of gathering evidence, disclose information or materials. The court also can decide to apply a provision to protect one party or the whole process of the arbitration upon an official request.

Furthermore, courts can determine the objection of either party regarding the impartiality of the arbitrators or any breach occurred during the arbitration procedures. Finally, the court can intervene to annul the award under particular conditions. Besides, and it should be noted that all the court decisions regarding the arbitration are final and there is no appellate mechanism available.

In general, a court intervention in arbitration process are limited and, in some cases, it is necessary to preserve parties’ interests.

Conclusion

It is evident that the construction arbitration is classified as a heavy subject whether from the investment perspective or the legal matters which govern its process. Most of the issues occur as a result of the defects that exist in the agreement or multi-interpretations of its terms and conditions. A comprehensive contract is a fundamental factor, and the arbitration clause is a lifeline in case of any disputes arise. Domestic law which has jurisdiction over the arbitration institution is a critical area to observe before proceeding or even before you conclude your contract.

The above aspects need professional lawyers and legal researchers from different jurisdictions. Our Firm is equipped with experts and practitioners who can advise you on your current or future construction project.