Survey of International Arbitration in Construction Disputes

In their November 2019 survey, Pinsent Masons (in partnership with the School of International Arbitration at Queen Mary University of London), note that while arbitration is seen as the preferred method for resolving international construction disputes, there is a desire within the construction sector to make the dispute resolution process and most particularly, arbitration, more economical and quicker for the end user. The key findings of this useful report are as follows:

  • The value of the dispute can sway decision makers’ views on whether it is a commercially sensible step to pursue arbitration. For 42% of respondents, the minimum threshold for considering arbitration is where the value of the dispute is between $1m and $10m, but the study found that 43% of in-house counsel surveyed believed that disputes need to be valued between $11m and $25m to make the claims worth pursuing in arbitration.
  • 73% of respondents regard technical complexity as a defining feature of international construction arbitration, 66% of respondents cited the large amounts of evidence required. Multiple claims or parties (49%), and large amounts in dispute (41%) were also features commonly identified. 
  • When appointing arbitrators, the vast majority of decision makers valued experience of how construction projects work above all other factors. In terms of arbitrator characteristics, the leading attributes comprised issuing an award within a reasonable period of time (70%), being willing to make difficult decisions, including on procedural issues (68%), possessing case and counsel management skills (68%) and having technical knowledge of construction disputes (63%).
  • The majority of respondents (67%) showed support for mandatory compliance with pre-arbitral decisions (which might be obtained as part of the contractual dispute resolution mechanism) as a pre-condition to arbitration. This statistic was underpinned by other survey results which showed that more than two-fifths of parties do not voluntarily comply with decisions issued in alternative dispute resolution processes.
  • Although respondents acknowledged that technical automation has a role to play in increasing the efficient management of large volumes of evidence, there was resistance to the idea of automating the entire decision making process.

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Hong Kong Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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