Construction Law

What is the Difference in Process between Arbitration and Adjudication in Construction Disputes?

Construction contracts will commonly provide for legal disputes to be resolved via agreed dispute resolution procedures. The most commonly adopted forms of alternative dispute resolution bring us to arbitration and adjudication. Although they are similar, they should not be confused with one another. Today, we will be looking at the difference between these 2 dispute resolution procedures and how they are applied in construction law disputes in South Africa.

Arbitration

Arbitration is a common dispute resolution procedure in which both involved parties agree to let an impartial 3rd party decide the case, referred to as the arbitrator. This person can be a lawyer, an expert in the field of this specific dispute, or even an entire panel of people. The decision of the arbitrator is legally binding and is called an award, being eligible to court enforcement. Arbitrations are rarely appealed. However, appeals can be accepted through various exceptions to revisit the legal matter at hand. Arbitrations have the legal power to ascertain and establish facts about the dispute rather than listening to submissions and formulating a ruling out of them.

Adjudication

Construction contract parties must agree to an adjudication procedure in the case of a legal dispute. A 3rd party adjudicator will be selected by both parties to rule on the case at hand. However, adjudication decisions are only binding unless or until they are revised by a subsequent arbitration or litigation party after practical completion or by agreement between the involved parties. Adjudications offer no right of appeal and limited right to resist enforcement of the ruling. Therefore, the process of adjudication is slightly different to that of arbitration, which can cause some confusion when a legal dispute arises within construction contracts.

If you are looking for construction law experts, Allardyce & Partners Attorneys is your first choice. Please contact us today on 011 234 2125 or email us at enquiries@allardyce.co.za and take advantage of having experts on your side when faced with any legal disputes regarding construction contracts.