'No one size fits all' model for construction arbitration

Out-Law News | 28 Aug 2019 | 11:32 am | 2 min. read

There is no single way to approach construction arbitration and companies in a dispute must choose the right processes, tactics and tribunals to suit the particular dispute, an expert has said.

Arbitration expert Yong Neng Chan of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said that guidance on construction arbitration published earlier this year by the International Chamber of Commerce (ICC) provides useful options to consider.

"There is no one-size-fit-all model for effective management of construction arbitrations," he said. "The tribunal to be appointed, the arbitral process and use of evidential hearings must be tailored to the particular needs of each arbitration and the issues necessary to resolve in deciding the dispute."

"Many arbitration best practices, which reduce time and cost in construction arbitrations where used appropriately, are helpfully outlined in the ICC report. Participants in construction arbitration ought to give serious consideration to the best suited tools and techniques for expeditious and cost-effective resolution of the arbitration, if not already adopted," he said.

The ICC said the report provides guidance on a series of useful tools and techniques in developing cost-effective procedures in construction arbitration. The report will be helpful for parties and arbitrators who lack experience in construction arbitrations conducted under the ICC Rules, or who "wish to be reminded of the options available or of the practice of others".

The updated report mainly list 17 tools and techniques that are recommended and suggested in arbitration.

The report suggests considering six qualities when selecting arbitrators: familiarity with the industry and cultural nuances; familiarity with relevant law and main legal traditions; strong case management skills; availability; a 'balanced' tribunal, and diversity.

Case management conferences (CMC) are suggested as a tool for managing the arbitral process, and the report recommends use of the first case management conference to establish the first procedural order and timetable. The report suggests that the tribunal ensures all subjects that "have to be accounted for in the procedural timetable" are on the CMC agenda.

Sufficient time is required for each party to set its case out properly. The report recognises that timetables should allow latitude or "float" in case there is slippage given human frailty, should permit the parties to consider any potential for settlement and must include the hearing date. It may also be desirable to first outline a timetable leaving further steps to be developed based on progress.

Splitting a case should be considered and clarity on the sensibleness and cost-effectiveness of splitting a case is required before a case is split.

In terms of expert evidence, the report emphasises that it must be considered whether a matter is capable of being resolved in other ways, such as documentary evidence, and that the tribunal should check from early stages that the scope of expert evidence intended by the parties is confined to relevant issues.

The report prefers for evidential hearings to be held, with select issues to be carved out to be decided on the documents where possible. Factual and expert witness conferencing is increasingly popular in construction arbitrations. The report recognizes witness conferencing as a useful tool but expressed doubts "if such procedure is entirely to supplant cross-examination in a given case".