Each year, Queen Mary University of London carries out a survey of users of international arbitration. This year's survey, released last week, is the ninth such survey; sponsored by Pinsent Masons, it is the first to focus on construction arbitration. Its findings, while focused on international construction projects, are relevant to all construction disputes, whether international or domestic.
The survey of 52 questions was completed by 646 respondents between 31 May and 26 July 2019, from Europe (33%), Middle East (26%), Asias-Pacific (13%), North America (9%), Sub-Saharan Africa (4%), Oceania (1%) and other (4%). The primary roles of respondents were (in order) counsel, arbitrators, expert witnesses, in-house counsel, those working at arbitral institutions, academics and litigation funders. All had been involved in construction disputes, typically in major infrastructure projects in the energy and transport sectors, at some stage in the last five years. Projects roughly followed the geographical spread of the respondents identified above.
The primary causes of disputes were late performance, poor contract management and poor contract drafting. Nearly half of the respondents identified suspension or termination as triggering disputes, and over a third identified pre-construction issues, such as under-pricing and inadequate information at tendering as being underlying factors.
Arbitration is clearly perceived as the best process available for dispute resolution, however there was a clear demand for greater efficiency at all stages, from appointment, through the arbitral procedure to drafting the award. Obstacles were seen as due process paranoia and a reluctance by arbitrators to use the armoury of all available remedies.
The procedural elements most likely to increase efficiency were:
- summary dismissal of unmeritorious claims or defences
- arbitrator appointments, with a clear preference for experienced arbitrators who are robust in their procedural approach and willing to make difficult decisions and strong case management skills
- the use of interim awards
- streamlining of evidential hearings and submissions
- advance identification by the arbitrator of issues to be covered
- agreed chronologies and statements of fact
- time capped openings and closings
- effective use of technologies
- prompt issue of awards
A copy the survey report is here. The report makes for interesting reading, particularly when compared to the 2019 Update of ICC Commission Report on Construction Arbitrations, published earlier this year. That report, focused on efficiency in construction arbitration, also identifies strong case management skills and sets out a number of recommended practices for arbitrators and counsel.
With the likely increase in construction disputes in the current environment, there should be no reason for counsel and parties to be reluctant to resolve their disagreements in arbitration. The challenge is for arbitrators and counsel to take the opportunity which arbitration has to offer to provide prompt and efficient dispute resolution.