Mayer Brown
14 Contributions by Mayer Brown
PRACTICE NOTES
Arbitration is frequently touted as a more effective, efficient way to settle disputes than going to court. Yet, does that claim hold true? This Practice Note weighs the advantages and drawbacks of choosing arbitration instead of court proceedings to resolve construction disagreements. In particular, it aims to debunk common myths around arbitration and explores the tangible benefits it delivers in reality.
Crucially, opting for arbitration does not alter the statutory UK right to refer construction disputes to adjudication. Where a contract includes an arbitration clause and a matter proceeds to adjudication, the right to seek a final determination—displacing the adjudicator’s award—still exists, but it will be pursued through arbitration rather than litigation.
Time and cost
Arbitration is widely viewed as faster and less costly than court proceedings. However, in some instances arbitrations can in fact take longer and cost more than litigation.
Construction
PRACTICE NOTES
This Practice Notice explores how several causes of action can be brought together and resolved within one arbitration, with a particular emphasis on construction disputes. See also Practice Note: Multi-party and multi-contract arbitration—an introduction.
Multi-party/multi-contract disputes
Construction matters frequently include more than two participants. Typically, an employer contracts with a main contractor, who in turn sub-contracts elements of the works to various sub-contractors. Consequently, a web of linked construction contracts exists between different parties on a single project. When disagreements arise, multiple potential claims may sit under the separate contracts. A single dispute may draw in the employer, the main contractor, and several sub-contractors, suppliers and consultants.
Where every contract falls within the court’s jurisdiction, the Civil Procedure Rules provide a straightforward route: the court will gather the connected claims into one set of proceedings through consolidation. By contrast, if some or all contracts contain an
Construction
PRACTICE NOTES
What is arbitration?
Arbitration is an alternative method of resolving disputes to litigation, in which parties refer their disagreement to an arbitrator, or a panel of arbitrators, to decide the matter instead of a court. It operates by consent, meaning it applies only where the parties agree that it should.
Origins in England
Arbitration developed from international and local tribunals created during the Middle Ages as substitutes for the royal courts. Merchants pressed for a different forum for commercial disputes because the royal courts were slow, ill-adapted to mercantile issues, and difficult to access for those not resident in England. A key characteristic of those tribunals was the relaxation or setting aside of strict formalities in commercial matters so that justice could be delivered swiftly. The practice later obtained a statutory footing in England when Parliament enacted the first Arbitration Act in 1698. Later statutes
Construction
PRACTICE NOTES
Arbitration may proceed under self-run ad hoc mechanisms or through institutional rules and processes. In real-world settings, the preference for ad hoc or institutional models shifts across sectors and turns on the character of the dispute. This Practice Note explores how institutional and ad hoc arbitration differ, with a focus on construction matters, and weighs the respective pros and cons. For broader commentary on institutional and ad hoc approaches, see Practice Note: Comparing institutional and ad hoc arbitration.
What is institutional arbitration?
An institutional arbitration is overseen by a recognised arbitral body and unfolds in line with that body’s prescribed procedures and rules. Typically, the parties’ contract includes an arbitration clause naming a chosen institution to act as administering authority. That designation provides administrative support and a procedural framework throughout the proceedings...
Construction
PRACTICE NOTES
Development of the rules
CIMAR denotes the Construction Industry Model Arbitration Rules, issued by the Society of Construction Arbitrators (SCA) together with the Joint Contracts Tribunal (JCT). Prompted by the Bill that became the Arbitration Act 1996 (AA 1996), the SCA set in motion the creation of model arbitration rules intended for uptake across construction bodies. Committees were convened under Lord Justice Auld’s chairmanship—a plenary group, a steering group and a drafting sub-committee—which adopted the title CIMAR.
The SCA released the first edition in 1998. In 2005 the JCT produced its own iteration, followed by updates in November 2011, June 2016 and April 2024 to align with its 2011, 2016 and 2024 contract suites; however, the text itself was unchanged from the 2005 version. Broadly, the Rules mirror AA 1996. Provisions of immediate relevance from AA 1996 appear after the associated Rule, with other
Construction
PRACTICE NOTES
Introduction
This Practice Note explores design under the 1999 Red, Yellow and Silver Books, the 2008 Gold Book, and the 2010 Pink Book. For coverage of design in the 2017 Red, Yellow and Silver Books, see Practice Note: FIDIC contracts 2017—design. In the Yellow, Silver and Gold Books, the contractor undertakes the design to satisfy the employer’s requirements prepared by or for the employer, while in the Red and Pink Books the design is produced by or on behalf of the employer. The design is set out in the following:
specifications and drawings (Red and Pink Books)
employer’s requirements together with the contractor’s proposals (Yellow Book)
employer’s requirements and the Tender (Silver Book)
employer’s requirements, the contractor’s proposals and operation management requirements (Gold Book)
Contractor design obligations under the Red and Pink Books
FIDIC treats the Red and Pink Books as traditional construction contracts, since the contractor
Construction
PRACTICE NOTES
This Practice Note offers an entry point for construction practitioners on the disclosure process in arbitration, setting it against disclosure in court proceedings and addressing the relevant procedural frameworks. It also highlights practical points to consider when managing disclosure in arbitration. For broader guidance on disclosure in arbitration, see the subtopics: AA 1996—evidence in arbitration—England and Wales and Evidence in international arbitration—overview.
What is disclosure and why is it an issue in construction arbitrations?
Construction projects generate vast volumes of documents, and the sector’s heavy dependence on technology for communication, planning and project management results in extensive electronically stored information (ESI). This can encompass, for example, electronically executed contracts, programmes, and communications hosted on online platforms, including Microsoft Teams and other messaging applications. Extracting the relevant material from what may amount to millions of electronic files and terabytes of data is critical in
Construction
PRACTICE NOTES
This Practice Note examines performance and testing under the 1999 editions of the Red, Yellow and Silver Books, the Gold Book 2008 and the Pink Book 2010.
It reviews performance and testing under the 1999 Red, Yellow and Silver Books, together with the Gold Book 2008 and the Pink Book 2010. For detailed guidance on the 2017 Red, Yellow and Silver editions, see Practice Note: FIDIC contracts 2017—performance and testing requirements. A principal concern for both the employer and the contractor (the 'parties') is determining when the works are to be treated as 'complete'. The employer will want confirmation that the works have been fully executed in accordance with the contract requirements, while the contractor will want certainty about what those requirements are and the method by which they can be satisfied. Consequently, it is essential that the contract sets out, in explicit terms, the
Construction
PRACTICE NOTES
What does FIDIC mean? What do they do?
FIDIC stands for ‘Fédération Internationale des Ingénieurs–Conseils’, most accurately translated from French as the International Federation of Consulting Engineers. FIDIC speaks for the consulting engineering sector both globally and within domestic markets.
What are the FIDIC forms of contract?
FIDIC’s contracts committee develops standard forms of contract for civil engineering projects that are used internationally. These forms set out the contractual relationship between the parties and distribute risks between the contractor and the employer. FIDIC states that its contracts allocate risks fairly to the party best able to manage and bear those risks. In December 2017, FIDIC released updated second editions of the Red, Yellow and Silver Books. These are considered below, alongside the other FIDIC contract forms. For guidance on the key updates in the 2017 versions, see Practice Note: FIDIC contracts 2017—what’s changed?
Construction
PRACTICE NOTES
Although arbitration has seen reduced use for UK domestic construction disputes owing to adjudication’s ongoing dominance, it is still widely chosen by parties to settle conflicts arising from construction projects where the contracting parties are from different jurisdictions across borders. The expense of international arbitration may mirror that of litigation, but this depends greatly on the particular circumstances of the matter, including its scale and complexity in play. Nevertheless, arbitration affords a range of benefits over litigation for parties, particularly for schemes undertaken in jurisdictions where local courts may lack sufficient experience or expertise, or where there are concerns about potential local bias in such circumstances.
The main advantages of international arbitration are set out below:
the parties’ ability to select a neutral forum and the laws that will govern the arbitration (the seat) chosen
the ability to also choose
Construction
PRACTICE NOTES
1. Have there been any recent developments regarding the regime and are any updates/developments expected in the coming year? Are there any other ‘hot’ merger control issues in New Caledonia?
New Caledonia, a French overseas territory with enhanced autonomy from mainland France under a special status, has operated its own merger control framework and competition rules since 2014, enforced by the Autorité de la concurrence de la Nouvelle-Calédonie (ACNC). Despite being distinct, the two systems are closely aligned, and their competition authorities cooperate extensively. In practice, the ACNC frequently relies on the French Competition Authority (FCA)’s merger guidelines and decisional practice when issuing decisions.
Although New Caledonia is not part of the European Union (EU)-it is one of the EU’s associated overseas countries and territories under Article 198 TFEU-the French merger control rules and decisional practice mirror those applied at EU level. This brings a
Competition
PRACTICE NOTES
This Practice Note reviews how price is addressed in the 1999 Red, Yellow and Silver Books, together with the Gold Book 2008 and the Pink Book 2010 editions. For guidance on pricing within the 2017 Red, Yellow and Silver Books, refer to Practice Note: FIDIC contracts 2017—price. Price sits at the heart of every construction agreement. FIDIC’s standard forms adopt two distinct approaches to setting the price. The Red and Pink Books operate as remeasurement arrangements, while the Yellow, Silver and Gold Books use lump sum fixed pricing across the works.
Remeasurement contracts
An opening valuation of the works is produced by quantifying each item of work, which will be set out in a document referred to as a bill of quantities, and applying the agreed rate to that item. This preliminary total is then recalculated at project close, once every quantity has been
Construction
PRACTICE NOTES
Time to complete the works
This Practice Note reviews the position under the 1999 editions of the Red, Yellow and Silver Books, alongside the Gold Book 2008 and the Pink Book 2010. For the 2017 editions of the Red, Yellow and Silver Books, see Practice Note: FIDIC contracts 2017—time; and also for a comparison of FIDIC time provisions (noting these cite the 2017 versions) with the JCT and NEC contracts, see Practice Note: Comparison between JCT, NEC and FIDIC time and money events. For this Practice Note, the phrase covers the works under the Red and Pink Books, the design and works under the Yellow and Silver Books, and the design-build phase under the Gold Book, and timing remains, in particular, a central concern on any construction project...
Construction
PRACTICE NOTES
This Practice Note reviews changes under the 1999 editions of the Red, Yellow and Silver Books, alongside the Gold Book 2008 and the Pink Book 2010. For detail on changes under the 2017 editions of the Red, Yellow and Silver Books, see Practice Note: FIDIC contracts 2017—variations.
Introduction
Across all FIDIC forms of contract, the employer may instruct alterations to the works at any time before the Taking-Over Certificate is issued (the Commissioning Certificate under the Gold Book) without needing the contractor’s consent. Nevertheless, issuing a change may give the contractor an entitlement to extra payment and an extension of time within which to finish the altered works. In each FIDIC form, such changes are principally addressed by clauses 13.1 to 13.3, which set out the right to vary the works and the steps to be followed.
What is a
Construction
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