Arbitration is an alternative to litigation for resolving construction industry disputes. For arbitrations seated in England and Wales, the Arbitration Act 1996 applies – but its provisions are generally non-mandatory, giving the parties autonomy on the arbitration process.

This process gives a brief overview of an arbitration’s key stages (under the ICC Rules).

Establishing the right to arbitrate (contractual or agreement)

Contractual

The parties must have agreed to resolve their disputes by Arbitration rather than by court proceedings – is there a clause in the Contract to that effect? If so, check which arbitration rules apply and be sure to follow them.

1.1.1.1Agreement:

Suppose the Contract does not include an arbitration clause. In that case, the parties can still choose to enter into an arbitration agreement once a dispute has arisen.

1.1.1.2Establishing the right to arbitrate (dispute)

An arbitration should only be commenced when a dispute has arisen between the parties. Claims where there is no substantive defence, a respondent has failed to respond, or are admitted (but unpaid) are still ‘disputes’. Claims can be added or amended after the Arbitration has commenced (depending on the claim’s nature, when it accrued, and the provisions of any applicable arbitration rules).

1.1.1.3Establishing the right to arbitrate (time limits)

Arbitration clauses may impose a limit for commencing arbitration proceedings or provide that a claim is barred or extinguished if Arbitration initiates after the time limit.

S.13 Arbitration Act 1996 states that the Limitation Act 1980 applies to arbitral proceedings just as they use to legal proceedings.

1.1.1.4Establishing the right to arbitrate (time limits expired?)

Some arbitration rules allow tribunals or arbitral institutions to extend contractual time limits. This option should be exhausted before parties make any applications to Court.

Otherwise, the parties may apply to Court to extend a contractual time limit (but not a statutory time limit) under s.12 Arbitration Act 1996.

1.1.1.5Commencing an arbitration

The following sets out an example procedure under the International Chamber of Commerce / ICC Rules 2017.

1.1.1.6Claimant files a Request for Arbitration

This Request includes:

• description of the parties and dispute giving rise to claims (Article 4(3)(a)-(c))

• details of contract(s) and arbitration agreement (Article 4(3)(e))

• the relief sought, and

• proposals concerning the number of arbitrators and their choice following provisions of Articles 12 and 13, and any nomination of an arbitrator required (Article 4(3)(g)).

1.1.1.7Defendant files an Answer to the Request for Arbitration.

Once the Defendant has received a copy of the Request, it has 30 days to file an Answer (Article 5(1)). There is no prescribed form of the Answer but, as a minimum, it should contain:

• details of the parties (Article 5(1)(a))

• comments on the dispute and claims (Article 5(1)(c)), and

• a response to the relief sought (Article 5(1)(d)).

A defendant should also bring any counterclaims simultaneously as filing the Answer (Article 5(5)).

1.1.1.8Formation of the Tribunal

The Parties select an arbitrator who must be impartial and independent (Article 11(1)).

If parties cannot agree, the ICC Court appoints a sole arbitrator (Article 12(2)).

1.1.1.9Initiating the Arbitration (timetable)

The tribunal orders a provisional timetable on what directions may be necessary (Article 24(3)).

The timetable usually identifies provisional dates for the final hearing and other steps.

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1.1.1.10Arbitration proceedings

The Statement of Claim / Defence is served according to the timetable set.

Documentary evidence: it is up to the Tribunal to decide the disclosure scope (Article 25(5)).

Witness and Expert evidence: The Tribunal has the right to hear witnesses, experts or any other person but has no obligation to do so (Article 25(3) – (4)).

1.1.1.11Hearings

The Tribunal may decide the case on documents alone unless they request a hearing (Article 25(6)). The Tribunal has a broad scope to conduct any hearings; it thinks appropriate and private (Article 26(3)).

1.1.1.12Award

The Tribunal must inform the Secretariat and parties of the date by which it expects to send its draft award to the ICC Court for scrutiny to identify mistakes as to form and substance (Article 27).

Once it has been made, the Secretariat sends the award to the parties, provided all Arbitration costs have been fully paid to the ICC (Article 35(1)).

Parties are bound by the award (Article 35(6)) (subject to any challenges regarding serious irregularity or jurisdiction of the arbitrator).