General information
Parties should always consider all possible alternative dispute resolution mechanisms and even contemplate combining them where appropriate. Reflecting on the full range of available options—whether mediation, arbitration, or other hybrid methods—can lead to more tailored, efficient, and effective outcomes, aligning with the specific needs and goals of the parties involved.
If classic stages are often followed in arbitration, it is crucial to always remember that - as long as fundamental procedural principles (equality between parties and right to be heard) are respected - parties have the autonomy to shape their procedure. They may deviate from the traditional route developed in practice or complement and enrich it with different tools tailored to their needs.
These steps may be discussed at a case management conference (“CMC”) during which they can comment on draft terms of reference (“TOR”) and specific procedural rules contained in a procedural order n°1 (“PO1”). During the CMC, arbitral tribunals will then be able to help the parties in finding an agreement or decide on the calendar. Next section introduces several tools designed to offer parties the required efficiency.
It is common practice in international arbitration that each party appoints its own experts on technical issues.
It is worth the while reminding parties and arbitral tribunals that in some cases, it might be more efficient to have an expert appointed by the tribunal.
Written submissions in construction arbitrations tend to be longer and longer. By the same token, the length of the proceeding may also be longer that it could (should) be.
Parties could avoid that by trying to agree on rules limiting the length of the submissions or on the schedule for the exchange of briefs.
In the absence of an agreement by the parties, arbitral tribunals have the power to decide on procedural rules in the absence of an agreement by the parties (Article 21. – Rules Governing the Proceedings. “The proceedings before the Arbitral Tribunal are governed by the Rules and, where the Rules are silent, by any rules which the parties or, failing them, the Arbitral Tribunal may settle on, whether or not reference is thereby made to the rules of procedure of a national law to be applied to the arbitration”). Therefore, keeping in mind the necessary respect for equal treatment and due process, arbitral tribunals may think of imposing some limits to the submissions on the calendar. This is, however, a very delicate exercise so that it is always better to try and find consensus by discussing with the parties.
Parties, counsel, and arbitrators may find information here below aimed at enhancing the efficiency of the management of their construction arbitration proceedings.
Effective solutions for Construction Disputes
Bifurcation
Bifurcation consists in deciding certain issues before others, depending on the solution given to the first ones (liability before quantum; jurisdiction before merits, etc.). This allows avoiding covering the dispute in full, whereas parts of it may become moot. Bifurcating is to be decided on a case-by-case basis.
Intermediate reports and/or case management conferences
After a first exchange of submissions, or at any other appropriate moment, the arbitral tribunal may identify the problems it considers, without prejudice, as the issues at the heart of the dispute. This would not prevent the parties from addressing other questions, but, at least, this would give them a sense of what the arbitral tribunal considers relevant.
Preliminary views
Another technique to improve efficiency consists, for the parties, in requesting preliminary views from the arbitral tribunal on all or some of the issues involved. Receiving a non-binding preliminary evaluation – most often without reasons - might indeed help parties to negotiate.
Subject to the agreement of the parties, a preliminary view may be given at any stage of the proceeding, but, in practice, it is generally only possible after the parties’ first exchange of submissions.
Mediation
Parties may engage in a parallel mediation, as they may engage in parallel direct negotiations, the arbitral tribunal being aware or not of those discussions. It is also possible to have recourse to mediation within the arbitration process itself. Arbitrators may indeed help parties to settle their case and if a true mediation is helpful (with caucuses, etc.) refer the parties (with their agreement) to mediator(s), the arbitration being suspended during that external mediation, or terminated if the parties so wish.
Different questions may arise as to when and how the parties will ask the arbitral tribunal to play this role. Here again, it is all about flexibility. At any moment, one party, or even the arbitral tribunal, may suggest having recourse to this process. This may have an impact on the calendar. Avoiding that risk may be achieved by agreeing, for instance during the first CMC, to reserve “a mediation window” during the arbitration.
Early determination
With an early determination, parties receive an expeditious binding determination generally based on the manifest lack of merits of a claim or the manifest absence of arbitral jurisdiction.
Sealed offer
Sealed offers are conceived to encourage parties to accept reasonable offers made by their opponents. Basic idea is thus to favour a settlement on the merits by ‘playing’ on the circumstances that could be invoked, in the absence of such a settlement, when the tribunal will have to decide on the allocation of the costs.
A party sends an offer to the other to settle. This offer is confidential and made “without prejudice save as to costs”. It must be non-conditional. If the offer is accepted, that is the end of the process. If it is not, the sealed offer is transmitted to the arbitral tribunal and kept sealed until its decision on the merits. In many cases, the party making the offer (most of the time respondent(s)), will not want the tribunal to know that it has made such an offer (fearing of a negative impact on the perception of the case by the tribunal). That is the reason why parties often agree to communicate the offer to a third neutral or to the arbitral institution. Once the decision is taken on the merits, the offer is then transmitted to the tribunal. If it appears that the offer was better than what is granted to the winning party or very close to it, the tribunal may decide that this is a reason not to strictly follow the principle of “costs follow the event”, considering the offer and the fact that, if accepted, it could have led to the end of the dispute earlier, which would have saved costs. Arbitral tribunals are not obliged to draw consequences from such a fact (subject to an express agreement of the parties to the contrary). However, it will normally be one of the elements taken into account when allocating the costs.