Party conference

Dispute resolution, like any other service industry, must deliver what its customers want. Alternative dispute resolution approaches such as adjudication, conciliation, expert determination and mediation are effective, but where companies find themselves with an intractable dispute or remain in conflict, they have two choices: arbitrate or litigate.

It has been said that arbitration is no more or no less than litigation in the private sector. In domestic disputes arbitration has unique advantages, but where the parties come from different jurisdictions it can be well argued that it is without equal.

Modern arbitration is entrenched in party autonomy and is consensual; parties choose the arbitrator, the procedural law, the substantive law governing the contract, the place of the arbitration, the country and the language. The award is enforceable across international boundaries,and is often much faster than litigation. The parties are not at the mercy of the state court calendar and, when managed in a businesslike way, it is less expensive.

It requires a written agreement to refer the dispute to a third party (appointed by a process agreed by the parties) to decide matters. Although it is not necessarily cheaper than litigation, it offers advantages:

• Universal enforceability. In most counties there is real choice between a court and arbitration, but where there is the potential for the commercial dispute to be international only arbitration provides a universally enforceable decision
• Flexibility. Procedures can be adopted that suit the dispute. In England, Wales and Northern Ireland, the tribunal must adopt procedures suitable to the circumstances of the case, avoiding unnecessary delay or expense, to provide a fair resolution
• Confidentiality. Arbitration is a private process and this is one of the features that attract so many parties to use it. There are many aspects of disputes that parties do not want publicised and this cannot be controlled if they are discussed in an open court
• Choice of arbitrators. One or more arbitrators may be chosen for their special skill and expertise. For example, it is reasonable that an experienced engineer acting as arbitrator should be able to grasp complex building services issues quickly and save the parties both time and money, delivering a sensible award. The tribunal can offer continuity as it deals with a dispute from beginning to end.

The most important product of arbitration is a written reasoned award which is binding upon the parties and which may, if required, be enforced through an application for summary judgment. The award serves no useful purpose if it is not enforceable and thus it must be certain, consistent, comply with the submissions, be capable of performance and be final. It should consider all the issues required and determine them.

The award serves no useful purpose if it is not enforceable, so it must be certain, consistent and final

The arbitrator has a general duty to act fairly and impartially, giving each party a reasonable opportunity to put their case. The award should demonstrate the tribunal has done this.

Arbitrators must have knowledge of the laws of contract, tort and evidence. They must understand and be able to use the applicable procedural law. They must be able to evaluate the arguments and evidence which seemingly supports conflicting points of view and determine the award. Where disputes revolve around issues of law, lawyers often make the best arbitrators. However, where issues of fact dominate the dispute, many businesses prefer to have an arbitrator who is skilled in the technology involved.

In the UK, the Chartered Institute of Arbitrators offers chartered status for arbitrators. There are about 400 chartered arbitrators, and about 40% are lay arbitrators such as engineers.

Some say arbitration is on the wane, perhaps because in the JCT 2005 and 1998 Standard Forms of Building Contract it is no longer the automatic method of dispute resolution and for it to apply it must be expressly stated in the contract particulars. I say businesses creating domestic and particularly international construction contracts are recommended to consider arbitration: it is more relevant than ever. Arbitration allows companies to avoid lengthy entanglement with the courts, its aim being to provide a predictable commercial outcome in line with international norms.

Niall Lawless is a chartered building services engineer, arbitrator, mediator and adjudicator, email: nlawless@arbitrari.eu www.arbitrari.eu