International construction arbitration—the arbitration agreement
Produced in partnership with Mayer Brown International LLP
International construction arbitration—the arbitration agreement

The following Construction guidance note Produced in partnership with Mayer Brown International LLP provides comprehensive and up to date legal information covering:

  • International construction arbitration—the arbitration agreement
  • Key provisions of the arbitration clause
  • Legal framework—governing law of the contract
  • Governing rules

While the use of arbitration in domestic construction disputes in the UK has waned due to the continuing popularity of adjudication, it remains a popular forum for resolving disputes arising from construction projects where the contracting parties are from different jurisdictions.

Although the costs of international arbitration are often similar to litigation, it provides a number of advantages for parties, particularly for projects undertaken in jurisdictions where the local courts may not have sufficient experience or expertise, or where there is a fear of bias.

The main advantages are:

  1. a neutral location for parties to conduct their dispute (the seat of the arbitration)

  2. the ability to specify who the arbitrators will be and ensure they are suitably experienced, and to determine the rules and law that will govern the arbitration

  3. the relative ease of enforcing an award made, and

  4. confidentiality

In order to make use of these advantages, it is important to ensure an effective arbitration clause is in place that is sufficient in its scope to address the parties' concerns.

The precise terms of any arbitration agreement will vary depending on the parties' interests. The first step is to consider what the parties want to achieve. While parties' interests will turn on the facts of each case, some key considerations include the nature, complexity (particularly in construction contracts) and value of potential claims, together