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Review by Nael Bunni - The Guide to Construction Arbitration

This guide is a welcome addition to the available literature on Construction Arbitration as it provides the reader with basic reference material for this complex subject which requires extensive expertise. As it is generally accepted, construction projects are exposed to a huge matrix of risk, each of which reproduces its own unique characteristics into the disputes that these projects might generate, including the variety of circumstances in which they emerge and the large sums they involve.  

The contracts between the parties involved in construction projects include not only employer and contractor, but also contractor and sub-contractors; as well as parties in joint- venture arrangements.  Therefore, many disputes are highly technical, involve the use of computers and relate to many methods of procurement, such as Design-Build (DB); Engineer, Procure and Construct (EPC); Design, Build, Operate (DBO); and Private-Public Partnership (PPP).  Each of these methods presents its own unique spectrum of risk and requires a different approach to allocation of risks between the contracting parties. Furthermore, whilst all of the participants would strive to achieve the three main objectives of Quality, Cost and Time targets, more often than not, each party has its own interests.  Other key features of construction arbitrations are the wide-ranging documents they require; the many issues they involve; the extensive factual evidence they present; and the pre-arbitration dispute avoidance and resolution layers that they must proceed through.  In this connection, it is worthy of mention that a key factor that underpins the use of the pre-arbitral mechanisms is the ability of early identification of the issues that arise.

The Guide is structured by distinguished editors to deal with all of the issues identified above and is based on the very successful LLM course on International Construction Contracts and Arbitration at Queen Mary University of London, which has been taught there since 1987.  It contains twenty one contributions from forty experts in the fields of dispute resolution, including arbitration and ADR.

It is divided into three Parts.  Part I includes seven chapters and deals with some of the basic concepts of construction contracts that explain how disputes arise with such complexity and intensity: Foundation of Construction Projects; Parties to a Construction Contract; Bonds and Guarantees; Introduction to the FIDIC Suite of Contracts; Contractors’ Claims; Remedies and Reliefs; and Employer’s Claims and Remedies.

Part II contains Chapters 8 to 13 and concentrates on the dispute resolution mechanisms used in construction disputes with a focus on the special features of construction arbitration: Suitability of Arbitration Rules for Construction Disputes; Subcontracts and Multiparty Arbitration in Construction Disputes, including Emergency Arbitration, in Construction Arbitration; Organisation of the Proceedings in Construction Arbitration; and Special Issues, Documents in Construction Disputes and Awards.

Part III comprises Chapters 14 to 18, which examines a number of specific topics related to international construction arbitration: Construction Disputes in Investment Treaty Arbitration; Construction Arbitrations in the Nuclear Sectors; Construction Disputes in the Energy Sector; Construction Arbitration and Concession Contracts; and Construction Arbitration and Turnkey Projects.

Part IV contains Chapters 19 to 21. It examines Construction Arbitration in certain jurisdictions that have a very active construction industry. It deals with Australia; Turkey; and the MENA region.

An important feature of the Guide is the varied articles that deal with key topics, such as the FIDIC Forms of Contract and in particular the 1999 Suite. However, it is important to note that FIDIC is intending to introduce the second edition of these forms in December 2017. This second edition is expected to change some of the concepts explored in the Guide.

The Guide should certainly appeal to all types of construction professionals, offering practical information to practitioners who are inexperienced in international construction contracts and dispute resolution; as well as others who may have experience in one area but may lack experience in other areas.  Lawyers and non-lawyers involved in the construction field would find the Guide of immense value in extending their knowledge to Arbitration and Dispute Resolution.   As Louis Pasteur once wrote: “fortune favours only the prepared mind”.

In conclusion, I would have no hesitation in recommending this book to the construction practitioners. 

Nael G. Bunni,

1st November 2017.

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