Key Information to Understand About Arbitration

Facts about Arbitration that you should know

In simple terms, arbitration refers to a popular method of resolving any disputes that occur in businesses including construction. These days it is a preferred method of problem-solving because it comes with some advantages over its alternatives like litigation. That said, there are a few things that should be kept in mind before moving ahead with this decision.

  1. Cross-border effectiveness: Several international disputes can be brought to rest with an arbitration. The arbitral award is effective in about 150 countries making it an easy choice for cross-border disputes. To make a successful and cost-effective arbitration happen, all parties must ensure there are impartial decision-makers involved and the venue/specific laws are agreed upon.

  2. Expert witnesses: Arbitrations usually involve lawyers and/or witnesses that are also specialists or experts in certain sectors. This includes industries like finance, engineering, etc. Usually, people who have been selected as witnesses in prior cases are the ones who are preferred to be brought in again as they are familiar with the process and develop the right set of communication skills to help the case move further.

  3. Economical, for now: One of the key reasons why arbitration has been gaining popularity over litigation is its cost-effectiveness. Arbitration is held more economical because of its ability to help parties sort their case relatively quicker than a litigation case. However, in recent times, the pattern seems to be changing. For example, for any dispute where a specialist is required, a regular judge would be responsible for bringing them in. This appointing of an expert comes at an additional cost as they would be accountable for making clear assessments of the case. Likewise, arbitrators around the world also seem to be increasing their fees which takes the overall cost higher.

  4. Saves time: Proceedings that take place during arbitration are relatively faster as they are also more flexible as opposed to trials. Trials are at the mercy of very busy court dates whereas arbitration cases revolve around the availabilities of the people/parties that are involved. This also speeds up the process as it makes the meeting slightly informal, allowing participants to speak up and present their points easily. It further helps to bring forward all the evidence needed and coordinate a time that sits well with the required witnesses too to save time.
  1. Delay in site handover.
  2. Delay in issue of engineering drawings.
  3. Delay in supply of resources- material, equipment, and services.
  4. Delay in decision making.
  5. Delay in acquiring permits & approvals.
  6. Delay in payment of bills & advances.
  7. Delay due to a change in the scope of the project.
  8. Delay due to a change in plans /design of the project.
  9. Delay due to subcontractor/ vendor/another agency.

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