Practical class Construction Contract

-Marion Smith QC

20.1- Notice by contractor to Engineer- not later than 28 Days

If fail- no EOT, No additional payment and Employer discharged from all liability

Q.1- DAB:

20.2- Appointment of DAB

20.8– Expiry of DAB or no DAB or otherwise

 Not necessarily final

 Pre-Arb
 Technical Know-how
 Independent
 Appointed by parties
 Standing/ AD hoc
 Usually 3 people (20.2)
 Engineering, Some Legal Knowledge, Experience

DAB ARB
No- 1/3 1/3
Suitability- Independent,engineers and Independent
lawyers ( However usual ( However usually 1 engineer)
Binding, unless challenged Final and Binding
Flexible Can be just as flexible but it tends to be
more stringent.
Standing/ AD Hoc No standing arb panel
More of an on the job dispute resolution.
Guiding and advising the parties

DAAB- Dispute Avoidance and Adjudication Board- Now that’s what they are called u/
FIDIC 2017!
Why Lawyers on DAB?
They will be involved from the very beginning with the project. Lawyer could help
interpreting the contracts.
He could make sure that the process is fair. DAB may be asked to give decisions that are
temporarily binding Therefore lawyer may ensure that the process of decision is fair.

Can have lawyer as chair and 2 other non-lawyers.

Why not lawyers?

Make it unnecessary judicial and curb the creativity.
Most DABs are accepted as final. Vast majority are upheld.

Since advise and adjudicate, therefore they split into 2- advising board and adjudication
boards. (Followed during London Olympics)

Q.2- Beauty Parade for arbitrators?

It is common practice to meet candidates for the role of arbitrator at a “beauty parade”.
Beauty parades are an opportunity to interview candidates and assess their suitability to sit
on the tribunal. They do not, however, provide an opportunity to discuss the case or to
explore whether a candidate is likely to decide matters in your favour. Arbitrators from
different cultures will have different attitudes towards a parade and the type and level of
contact which is appropriate between a tribunal and the parties. Some candidates will
consequently reject a beauty parade as inappropriate.

It is important to conduct some simple research before a beauty parade. The ICC Secretariat,
the LCIA or another arbitral institution can be approached to help with identifying potential
candidates. Each candidate’s CV or résumé will reveal details of their expertise, and the
opinions of fellow arbitrators and colleagues may be sought. Any books and articles which
have been published by the candidate and previous arbitration awards (if published) will also
give an indication of the candidate’s suitability.

IBA guidelines on party representation- Article 7, 8b- A Party Representative may

communicate with a prospective Party-Nominated Arbitrator to determine his or her
expertise, experience, ability, availability, willingness and the existence of potential conflicts
of interest.

The specific facts and circumstances giving rise to the dispute- Can be asked
Therefore, cannot discuss otherwise to determine who will give a favourable decision.

Ans- Independence and Impartiality is the most important quality on an arbitrator.

The notion of party appointed arbitrator is that the parties seek for particular qualities.
However, it is also said that appoint someone who has more persuasive power to forth your
view point. But there is a responsibility to be impartial and independent.

Article 11 (1) ICC Rules-

Article 11 (3) – Sign a declaration

Malaysian arbitrator imprisoned for signing a false arbitration.

You can conduct such an interview. But there are strict rules
“without prejudice correspondence”- correspondence to settle a dispute- Cannot be used

Grey Area- start getting towards the dispute

Q.3

1. What is the average time from Notice of Arbitration through to final award?

Submission of Request for Arbitration

| 30 Days
Answer to the request
| 15 + 15
Appointment of arbitrators
|
Article 31, ICC Rules- 6 months- TOR

ICC rules- 9 months ( in theory) however timetable can be extended

However, court may establish a different time limit based on the procedural timetable
in Art 24 (2)

In theory can say no to extension, but practically usually always extended otherwise
agreed otherwise.

LCIA website/ ICC website-

2. Do Claimants usually win?

That depends on the merits of the case and in this case have a tenable and strong case
on merits. However, rest assured the process ensures that the award will be enforced.

3. How much will it cost?

ICC cost calculator- $889,900- If tribunal
$8,19,900- Sole Arbitrator
Expedited Procedure- $868,451
Sole Arbitrator- $812,712

Filing fee- $5000

ICC upfront payment, whereas LCIA space out the payment.

Article 37- Advance on Costs- Admin Fee, Fee of arbitrators

4. Can the proceedings be expedited?

Article 30- Expedited Procedure- Amount in the dispite doesn’t exceed or parties so
agree

The ICC Rules of Arbitration, in force as of 1 March 2017, offer an expedited

procedure providing for a streamlined arbitration with reduced scales of fees.
 This procedure is applicable in cases where the amount in dispute does not exceed
US$2 million— unless the parties decide to opt out or the ICC Court of Arbitration
considers it inappropriate in circumstances. It applies to arbitration agreements
concluded after 1 March 2017.

Therefore the expedited procedure cannot apply here.

The procedure is simplified:

 No Terms of Reference
 A case management conference within 15 days after the date on which the file was
transmitted to the arbitral tribunal
 The arbitral tribunal may decide on documents only
 The arbitral tribunal may limit the number, length and scope of written submissions
and written witness evidence

The final award is rendered within six months from the case management conference.

ICC study- Costs follow event principles is usually preferred

5. When the Contractor wins will it recover its costs?

Article 38- Decision of arbitrators, unless agreed otherwise by the parties

However usually costs follow the event principle

USA- Lawyers Fee is usually not paid and parties pay their own costs
UK- Costs follow events

Even if costs follow event even then 70-80% of costs are allocated!

Section 59 UK- Costs follow event principle

Also LCIA Rules

Q.4 Mr Fiat wants you to ring up “our man” and suggest as few names for President

ICC rules- Really strict, cannot do it, unless parties agree!

IBA Guidelines on Party Representation- Article 8b- A Party Representative may

communicate with a prospective or appointed Party-Nominated Arbitrator for the purpose of
the selection of the Presiding Arbitrator

ICC rules- Court appoints, if parties do not establish a procedure. It is often advised that
don’t allow any arbitrator by institution. Therefore, if no control, ICC can appoint anyone!

Q-5 Procedural Directions-

Standard stages of arbitral process-

Request—Answer----TOR/PO1--- Written Submissions---- Evidence {Oral (witness and

Witness of fact) and Documentary}--- Award
PO1- Procedural timeline, evidence, hearings

Q-6 The Contractor wants to know what, if any, contemporary documents it will have to
produce in the arbitration.

Article 3 IBA rules taking of evidence

Contemporary Docs- Civil law countries sometimes it’s impossible to get an inter-party
disclosure

Q-7 Mr Dodge, the Contractor’s recently retired Project Director for a witness
statement.

No, cannot pay witnesses. Except for travel and stay expenses.

UK-
Article 4(3) of the International Bar Association (IBA) Rules on the Taking of
Evidence(which are frequently adopted in international arbitration) envisages some
discussion with witnesses and potential witnesses in respect of their “prospective testimony”.
Guideline 24 of the IBA Guidelines on Party Representation in International
Arbitration seems to go one step further, allowing counsel to meet and interact with witnesses
in order to “discuss and prepare their prospective testimony”.

Q-8 The Contractor wants to instruct Dr. Malvolio as its programming expert.
Don’t instruct

Q-9 Dr. Othello’s report

Q-10 night and copies documents belonging to the Contractor’s legal team.

IBA guideline- Remedies for misconduct- Artilce 26

(a)admonish the Party Representative; (b) draw appropriate inferences in assessing the
evidence relied upon, or the legal arguments advanced by, the Party Representative; (c)
consider the Party Representative’s Misconduct in apportioning the costs of the arbitration,
indicating, if appropriate, how and in what amount the Party Representative’s Misconduct
leads the Tribunal to a different apportionment of costs; (d) take any other appropriate
measure in order to preserve the fairness and integrity of the proceedings. 27. In addressing
issues of Misconduct, the Arbitral Tribunal should take into account: (a) the need to preserve
the integrity and fairness of the arbitral proceedings and the enforceability of the award; (b)
the potential impact of a ruling regarding Misconduct on the rights of the Parties; (c) the
nature and gravity of the Misconduct, including the extent to which the misconduct affects
the conduct of the proceedings; (d) the good faith of the Party Representative; (e) relevant
considerations of privilege and confidentiality; and (f) the extent to which the Party
represented by the Party Representative knew of, condoned, directed, or participated in, the
Misconduct.

Q-11- G- NO

Dr Y: His oral evidence relied very little on the witness statements which he had previously
given before the trial started. Effectively, the details of his defence were developed in the
witness box. – yes

Ms R: hardly ever, or never, attempted to give a straight answer to a straight question.

Straight questions in cross-examination were met by lengthy answers which were a mixture
of protest and irrelevant matters- NO