Construction Law Specialists

Construction Law Specialists to Help with Arbitration Clauses in Agreements

In order to prevent disputes in the construction industry because of unclear agreements, it is best to approach construction law specialists to help draft and review contracts between parties. Such construction law specialists use relevant wording to the construction industry and ensure that the clauses, terms, and conditions of the contract are worded according to the laws governing construction in South Africa or internationally.

Many companies sub-contract to other companies in the industry. An international firm can contract a local firm to build or oversee the building of commercial structures in South Africa. However, to minimise the risk of having to solve disputes related to the agreement through court litigation, the parties to the agreement may agree in writing to solve existing and future disputes through arbitration. They can stipulate which construction law specialists to be appointed as arbitrators or can approach the Arbitration Foundation of Southern Africa (AFSA) or the Association of Arbitrators of South Africa (AASA) for a recommendation of suitable construction law specialists to arbitrate the dispute.

With arbitration recognised internationally as a method for solving disputes, the parties to the agreement have the right to choose the venue, time, language, arbitrator, and law that suit them.

One of the benefits of arbitration is that the information disclosed during the arbitration stays confidential. This helps companies, also international firms, to protect their reputations, as the information about the dispute is not heard in an open court.

The parties to the dispute must enter into a written agreement in which they stipulate arbitration as a means with which to solve their dispute. It is best to make use of construction law specialists to be arbitrators, as they have in-depth knowledge of local and international construction contract forms and legal terms.

The agreement for arbitration must be in writing and properly defined. Since the arbitrator’s decision is final, it is imperative to select a party that is objective and well acquainted with construction law, such as Allardyce & Partners that has a team of construction law specialists.

The parties should stipulate the jurisdiction and the powers of the arbitrator before the arbitration process commences. The parties can also have a clause in their original construction agreement about who should appoint an arbitrator, should they not be able to come to an agreement on who to appoint.

The written agreement for arbitration must include the rules and procedures to adhere to regarding arbitration. Here too the assistance of construction law specialists regarding the wording of the agreement is recommended. The parties furthermore must stipulate where to hold the arbitration and whether an appeal process should be followed if a party does not agree with the decision of the appointed arbitrator. They also need to stipulate the confidentiality level of the arbitration proceedings.

Construction law specialists can assist in the drafting of the arbitration agreement or the construction agreement to include a relevant arbitration clause. The terms of the arbitration must be such as to ensure a cost-effective, fast, and efficient way to solve a dispute through arbitration. It is imperative to make it difficult for any party to withdraw from the process or to seek court interference with the arbitration, as this would lengthen the time it takes to solve a dispute.

There are several benefits associated with arbitration by construction law specialists. One is that an objective party who is qualified and experienced to deal with construction related disputes is appointed. Another one is that the dispute can be resolved in a timely manner to avoid unnecessary costs to each party. The information shared during the arbitration process is confidential. Since the time, law, language, and place of arbitration are agreed upon by the parties, the risk of the process favouring one party over another is eliminated.

It is also possible for parties to agree that the arbitrator’s decision is final, which means that there is no provision for appeal. In this way, the dispute can be resolved without having to deal with appeals, costs associated with such, and the time delays that come with appeals.

To fully benefit from arbitration as a dispute resolution method, it is imperative to have a clause dealing with arbitration in the original construction agreement. To this end, it is best to have construction law specialists draft the agreement to ensure that an appropriate clause is included in the contract.

Call us on +27 (011) 234 2125 for construction law specialist services 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 – August 2018.

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