When to Appoint Construction Arbitrators to Decide on the Outcomes of Disputes
Construction arbitrators assist with alternative dispute resolution related to the construction industry. The arbitrators follow the specific procedures of arbitration to help settle disputes outside court.
What is Arbitration?
It is a procedure followed in which parties agree to get in one or more arbitrators to make a binding decision regarding a dispute. In the construction industry, a dispute can occur regarding non-payment by the client because of perceived non-performance by the contractor.
A dispute can also occur because of project delays related to alterations required by the client, but which have not been concluded in writing. Construction disputes often develop regarding misunderstandings related to the agreement. As part of our comprehensive service offering, we have experienced construction arbitrators to assist parties in resolving their disputes.
The Arbitration Act No. 42 of 1965 governs the process of arbitration. In order for the decision of the construction arbitrators to be enforceable, the parties to the dispute must agree, in writing, to have the dispute arbitrated or must do so in their construction agreement for future disputes regarding any matters directly related to their agreement. By choosing arbitration, the parties to the dispute agree to have their dispute resolved through a private resolution as opposed to litigation.
The appointed construction arbitrator or arbitrators hear the dispute at a location and time stipulated and agreed upon by the disputing parties. The parties to the dispute thus choose a method of resolution that suits their requirements.
Arbitration can only be used as a dispute resolution method if all the parties to the dispute agree to arbitration. It is certainly better to insert a clause in the construction agreement to resolve future disputes related to the agreement by means of arbitration than it is to wait until a dispute arises. However, even if it has not been stipulated in the agreement, but the parties agree to arbitration, it is a cost-effective and private way to get a fair hearing and outcome regarding a construction dispute.
The parties to the dispute can appoint a construction arbitrator together or can approach the Association of Arbitrators or the Arbitration Foundation of Southern Africa for recommendations of relevant construction arbitrators. A party to the dispute cannot withdraw from the process once arbitration has been chosen. It is a neutral process and the parties to the dispute can select a language, place and law to be applicable to the arbitration of their dispute. It is furthermore a confidential way to resolve disputes and, as such, the disclosures made during the process are protected. That said, if the court orders arbitration, then the order is public.
The agreement for arbitration should clearly define what the dispute is for which construction arbitrators are appointed. It must also clearly stipulate what powers and jurisdiction the appointed arbitrators have and who such person/s are, where the arbitration must be held, and what procedures must be followed.
Why Appoint Arbitrators?
Get a faster resolution of the particular dispute, and have experienced and qualified persons to adjudicate the construction dispute. Disputing parties have the freedom to decide where, when, and how the dispute is to be decided, and whether the decision of the arbitrators is final or subject to appeal.
The proceedings are confidential and as such, you are able to prevent sensitive information from being made public. Avoid costly and lengthy delays in solving disputes by making use of our experienced construction arbitrators in South Africa.
Call us on +27 (011) 234 2125 for arbitration assistance regarding construction disputes in South Africa.
Disclaimer: This article is for information purposes only and does not constitute legal advice. Call on our attorneys for legal advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing – July 2018.