Arbitration — A Smart Alternative to Court
Arbitration provides a flexible, private, and enforceable way to resolve disputes without going through the courts. It is often included as a clause in construction contracts, but even if it’s not, parties can agree to arbitration once a dispute arises.
An independent Arbitrator — usually someone with expertise in construction, law, or a relevant technical field — will review the facts, hear the arguments, and issue a final, binding decision, known as an Award.
Why Choose Arbitration?
- Expert decision-maker – Arbitrators often bring deep technical or legal knowledge specific to the dispute.
- Private and discreet – The process is confidential, protecting sensitive information.
- Flexible and tailored – The timetable and procedure can be agreed to suit the needs of the parties and the project.
- Final and binding – The Award has legal force and can be enforced through the courts if necessary.
- International reach – Arbitration Awards are easier to enforce internationally compared with court judgments, which is a significant advantage in cross-border projects.
For disputes where a faster or less formal option is needed, you may wish to explore our Adjudication services.
Advantages of Arbitration
- Control – You can agree on the Arbitrator, the process, and the timetable.
- Specialist knowledge – Complex technical or commercial issues can be handled by an expert.
- Confidentiality – The dispute and outcome remain private.
- Finality – The Award provides a binding resolution and certainty.
Disadvantages of Arbitration
- Cost – Complex arbitrations can become expensive, especially with multiple hearings or expert evidence.
- Time – Depending on complexity, arbitration can take months or even longer.
- Limited appeal rights – Awards can only be challenged in very narrow circumstances, such as serious procedural irregularity or lack of jurisdiction.
How Arbitration Works
- Agreement to arbitrate – Either written into your contract or agreed once a dispute arises.
- Choosing the arbitrator – Parties select an independent Arbitrator; if they can’t agree, a professional body such as CIArb, RICS or another institution can appoint one.
- Flexible process – Timetable and procedure are agreed by the parties, allowing a process that suits the nature and urgency of the dispute.
- The Award – After reviewing evidence and hearing arguments, the arbitrator issues a binding Award that can be enforced through the courts.
Enforcement of Awards
Under the Arbitration Act 1996, an Award is legally binding and enforceable. If a party refuses to comply, the other side can seek summary enforcement through the courts.
Challenges to an Award are only possible on very narrow grounds, such as:
- The arbitrator exceeded their jurisdiction; or
- A serious irregularity caused substantial injustice.
Such challenges are rare — meaning arbitration often delivers certainty and finality.
Rules and Institutions
Many arbitrations are conducted under the rules of recognised institutions, which help ensure a fair, efficient, and predictable process. Commonly used institutions include:
- Chartered Institute of Arbitrators (CIArb) – A globally respected body offering rules, training, and appointment services for arbitrators.
- International Chamber of Commerce (ICC) – One of the world’s best-known institutions, with offices in many countries. Particularly popular for construction and energy disputes, the ICC Court of Arbitration offers proceedings in multiple languages and under globally recognised rules.
- London Court of International Arbitration (LCIA) – Based in London but used worldwide, the LCIA is known for handling complex commercial disputes, especially in finance, insurance, and international construction.
- Permanent Court of Arbitration (PCA) – Based in The Hague, the PCA handles cross-border disputes, including maritime, commercial, and investor–state disputes.
- Singapore International Arbitration Centre (SIAC) – Highly regarded for efficiency and cost-effectiveness, SIAC has become a popular choice for Asia-Pacific disputes.
- International Centre for Settlement of Investment Disputes (ICSID) – Part of the World Bank Group, ICSID specialises in disputes between investors and states and is valued for its neutrality and global reach.
Each institution offers its own rules, fees, and procedures, and we advise clients on the best forum for their specific dispute.
How We Can Help
At Davies and Davies, we support clients through every stage of arbitration, including:
- Reviewing contracts and advising on strategy
- Preparing clear, persuasive submissions
- Representing you at hearings
- Enforcing an Award if the other party refuses to comply
Our combined legal and construction expertise means we understand the technical and commercial realities of your projects, ensuring advice that is both practical and strategic.
Adjudication or Arbitration — Which is Right for You?
Both adjudication and arbitration resolve disputes without going through the courts, but they serve different purposes. Here’s how they compare:
| Feature | Adjudication | Arbitration |
|---|
| Speed | Fast — usually 28 days (with limited extensions) | Longer — typically several months depending on complexity |
| Cost | Lower overall costs | Higher costs, especially for complex cases |
| Binding effect | Temporarily binding — can be challenged in court or arbitration later | Final and binding — Awards are difficult to challenge |
| Decision-maker | Adjudicator, often a construction specialist | Arbitrator, often a senior lawyer or technical expert |
| Privacy | Private process | Private and confidential |
| Enforcement | Enforceable quickly in the Technology and Construction Court | Enforceable under the Arbitration Act 1996 and internationally |
| Best for | Payment disputes, straightforward contractual issues, urgent matters | Complex, high-value, or cross-border disputes requiring finality |
Need Guidance?
If you’re unsure which route suits your dispute, we can help you weigh up the pros and cons and choose the process that best meets your commercial and legal needs.
Talk to Us
Whether you need a quick, cost-effective decision through adjudication or the certainty and finality of arbitration, our team can guide you through the process from start to finish.
Get in touch with Davies and Davies for an initial conversation — we’ll help you understand your options, assess the strengths of your position, and develop a strategy that protects your commercial interests while keeping costs proportionate.
Contact us today to discuss your situation in confidence.