Article Date: 09/20/2013

Expert Discusses Trends in International Construction Arbitration

By Steve Rizer


During a recent WPL Publishing webinar, Navigant Construction Forum Executive Director James Zack outlined six developing trends concerning international construction arbitration. One of those six trends is the growth of international arbitration into a market. If international arbitration has become a market, should it be regulated? If it should be regulated, in what manner should it be regulated? And, who should regulate it? Here is what he told a target audience of public and private owners, construction managers, contractors, subcontractors, consultants, architects, engineers, and attorneys in response to these questions:


“We are not able to form an opinion based on what we’ve seen so far on whether international arbitration can or should be regulated,” Zack told webinar attendees. “At present, I think there’s inadequate information to warrant reaching a conclusion on this issue. But, having said this, yesterday morning, in preparation for this [presentation], I ran across an article by a British law firm that pointed out that Hong Kong [Mediation] Accreditation Association Ltd. – HCMAAL -- is now accrediting mediators and is trying to convince people to use only accredited mediators, so there is a move afoot to try [to] regulate the industry somewhat, starting with mediation, and it may spread beyond that. I’m not certain.”


Zack reported that international arbitration “has become its own sort of marketplace, with macro-economic impacts for things like legal services, arbitrators, institutions, translators, financial experts, hotels, conferences, and things of that nature.” He noted that arbitration in atypical languages is growing. “We’ve seen arbitration in Arabic and Chinese and Portuguese, which creates opportunities for legal counsel, for arbitrators, and for translators with these legal skills.”


Arbitration of “really technical” issues is starting to give rise to expert arbitrators who have knowledge of the law and of the technical issues, Zack said. “It’s not that they’re going back to industry experts, per se, but you’re getting a set of attorneys, for example, who specialize in dealing with disputes over refineries and pipelines [and who] specialize in disputes over power plants, and what not. So, they’re attorneys, but they spend a lot of time studying the technical issues revolving around power plants and thus [eventually] become … expert arbitrators.”


Also, arbitrators are competing for appointments, and arbitration centers are competing for a larger share of the cases.


“And established arbitral institutions are opening offices in new foreign locations,” Zack said. “The International Chamber of Commerce, which was always been U.K. [United Kingdom]-based since its founding, now has offices in Asia. AAA, the American Arbitration Association-ICDR [International Centre for Dispute Resolution], has offices in the Mid-East, and the London Court of International Arbitration has opened offices in the Mid-East and India.”


Other trends involve the following, according to Zack: the right of appeal; discovery; informal and interim resolution procedures; the expediting of arbitration procedures; and state regimes denouncing international arbitration conventions. Earlier during the 90-minute webinar, he discussed 12 “current reported trends in international construction arbitration.”


To inquire about purchasing a recording of the webinar, entitled “Trends in International Construction Arbitration,” call WPL Publishing at (301) 765-9525.


The ConstructionPro Network member version of this article includes a portion of the webinar's "Q&A" session and other information. To sign up for a membership, click here.



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