Brisbane Arbitration Lawyer Len Watt, explains the necessity of Arbitration Clause in Building Contracts.

It is, unfortunately, a fact of life that building contracts will often end in dispute. Disputes can take many forms and they can be in relation to various aspects of a project. Commonly, parties will fall into dispute regarding payment, variations, extensions of time and their general obligations to each other.

When a dispute arises in a building contract, particularly one which is for work being done under a commercial contract or a project using one of the Australian Standard or other more detailed forms of contract; generally, there will be a requirement that the parties undertake a process of ADR, or Alternative Dispute Resolution, prior to commencing litigation.

Rather than going to the Courts for a resolution to a dispute, by agreement, the parties can decide to send a dispute to arbitration. This is done via the contract between them. Within the contract, the parties chose, the nature of arbitration. That will most probably include, the number of arbitrators, the rules for the arbitration, the location of the arbitration and the laws which will govern the arbitration.

An example clause a construction arbitration lawyer will place into a contract can be:

1.1 All disputes arising out of or in correction with the present contract including any question regarding its existence, validity or termination, shall be referred to and finally resolved under the Rules of Arbitration of the [insert name of arbitration body].

1.2 The seat of the arbitration shall be [insert place].

1.3 The Tribunal shall consist of [insert number] arbitrator(s).

1.4 This contract is governed by the laws of [insert jurisdiction].

These clauses would enable a contract dispute to be referred to arbitration with a minimum of fuss. They allow the simple referral of the matter to arbitration without the necessity of having to engage in a lengthy process just to commence the resolution of a dispute.

The clause should also allow for a mechanism to appoint the arbitrators. Generally, the parties can seek the assistance of the arbitration body who will be responsible for undertaking the arbitration. This clause can simply state:

The parties shall meet within seven (7) days of the notification of the dispute being provided and shall seek to agree on the appointment of an arbitrator(s). If the parties are unable to agree then they shall request that the appointment be done by the president of the [insert arbitration body].

A dispute arising out of a construction contract does not automatically result in an expensive and long-term construction contract litigation. A construction arbitration lawyer will usually include an arbitration clause which will allow the parties to quickly refer a dispute to arbitration for resolution.

Brisbane Arbitration Lawyer, Becker Watt Lawyers are able to assist you with either the insertion of an arbitration clause into a contract or with the preparation and presentation of an arbitration matter.

Len watt is and experienced Building and Construction Lawyer who has a wealth of industry knowledge from his time as a construction project managed. Len offers all aspects of Constitution law advice along with arbitration advice and assistance. The team at Becker Watt Lawyers can help guide you along the right action for your situation.