Conflict Management & Dispute Resolution Report
Arbitration
1
peter.fenn@manchester.ac.uk 1
Week 9
Arbitration in Project
Management
International Disputes and
International Arbitration
11/15/2022
Module Aim
• To develop a critical understanding of the
factors that influence commercial conflict
and disputes with emphasis on
management and avoidance. In particular
the principles and practice of dispute
resolution via: ADR; Adjudication;
Arbitration and Litigation.
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This session’s aim
• To consider arbitration in Project Management disputes
in England and Wales
• To consider ‘international’ disputes in England and
Wales
• To examine International Arbitration
• UNCITRAL Model Law on International Commercial
Arbitration
• New York Convention
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Arbitration
• Domestic
• International
• Why not litigation
– Lengthy
– Costly
– Enforceability
– However Some Courts [e.g. England] greatly
admired
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Arbitration
• Its not difficult
• Include a clause in the contract that’s easy – All disputes arising out of or in connection with the present
contract shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce by
one or more arbitrators appointed in accordance with the
said Rules.
• Is it binding and final i.e. can you go to
court if you don’t like the result or
something is wrong now that’s hard but
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Arbitration and Standard Forms
of contract • Domestic Arbitration
• Statement
– All standard forms of contract [for construction
or other commercial work] include an
arbitration clause
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Arbitration
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Arbitration definition
• The handing down of an award, by a third
party, enforceable at law as the settlement
of a dispute; arising from a contract clause
or by joint agreement
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Arbitration Advantages
• Speed
• Cost
• Privacy
• Technical Arbitrator
• Finality
• Allegedly
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Arbitration’s successes
• Parties wanted expert arbitrators
• Construction and engineering
• Shipping
• Commodities [Scratch/look and sniff]
• Trade
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Arbitration’s demise
• It started to suffer the same failings that it
had replaced
• Speed – It took too long
• Cost – it cost too much
• Privacy – it is still private
• Technical Arbitrator - but law issues
dominate
• Finality – too many appeals
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More dispute resolution
techniques came about • Mediation, Adjudication, DRBs etc
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Arbitration
• All the parties from England then domestic
arbitration in England [their choice, they
could choose anywhere]
• But what if they are from various
countries?
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Arbitration
3
International Arbitration
• Define
• International Arbitration is selected by many of the
world's leading international companies; they insert an
arbitration clause into their agreements with trading
partners, and opt to have disputes in connection with the
contract decided by private tribunals ('arbitral tribunals')
rather than litigating them in national courts.
• ICC International Court of Arbitration®,
• The International Court of Arbitration® is the world’s
leading arbitral institution.
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International Arbitration
• International arbitration is leading method
for resolving disputes arising from
international commercial agreements
• A creation of contract,
• Binding resolution
• Developed to allow parties from different
legal and cultural backgrounds to resolve
their disputes
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Why have international disputes heard
in England?
• or Beijing or Dubai or France or
Switzerland …
– Confidence in the country its lawyers and
legal system
– Legal Infrastructure
– Peter Fenn
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Why NOT have international disputes
heard in North Korea?
• Or the other corrupt countries
Transparency International …
– No confidence in the country its lawyers and
legal system
– No Legal Infrastructure
– No Peter Fenn
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peter.fenn@manchester.ac.uk
Litigation and International Disputes
[International Arbitration]
• Projects operate within legal frameworks and jurisdictions;
• Many countries share similarities with law of England and Wales, but many do not.
• It may be that the country in which you work/study/operate has a different legal system or that a particular area of the law is different; you should always consider the effect of jurisdiction.
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Projects need not be bound by the law
of the country in which they are
situated • common situation:
• An infrastructure project in an African country: – funded by the World Bank;
– designed by engineers from Scotland (United Kingdom but NOT English law);
– project management by an organisation from the USA;
– procurement arranged by quantity surveyors from Australia;
– construction management by an organisation from England;
– sub-contractors from Holland, Malaysia and the African country;
– subject to the law of England;
– disputes to be dealt with a variety of procedures culminating in International Arbitration in Switzerland.
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Arbitration
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UNCITRAL Model Law on International
Commercial Arbitration
• United Nations Commission on
International Trade Law
• Adopted by the United Nations in 1985
[Resolution 2205]
• Member States adopt and use the model
law and the rules at their discretion
• https://www.uncitral.org/pdf/english/texts/a
rbitration/ml-arb/07-86998_Ebook.pdf
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"New York Convention"
• Convention on the Recognition and Enforcement
of Foreign Arbitral Awards (New York, 1958)
• The Convention's principal aim is that arbitral
awards will not be discriminated against
• November 2014, 151 of the 193 United Nations
Member States have adopted the New York
Convention
• http://newyorkconvention1958.org/index.php?lvl
=cmspage&pageid=4&menu=671&opac_view=-
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peter.fenn@manchester.ac.uk
Reasons for International
Arbitration • Imagine
– An infrastructure project in an African country:
– funded by the World Bank;
– designed by engineers from Scotland (United Kingdom but NOT English law);
– project management by an organisation from the USA;
– procurement arranged by quantity surveyors from Australia;
– construction management by an organisation from England;
– sub-contractors from Holland, Malaysia and the African country
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Reasons for International
Arbitration
• The most common reasons for opting for arbitration are: – that arbitration awards (broadly equivalent to a court
judgment) are easier to enforce internationally and cannot so easily be dragged to appeal for years;
– that neither party is willing to have disputes decided by the other party's national courts;
– that the parties are keen to have their disputes resolved privately.
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peter.fenn@manchester.ac.uk
The use of international
commercial arbitration
• International commercial arbitration is a
complex and important topic, you can find
more details in a Queen Mary University of
London report: 2018 International
Arbitration Survey: The Evolution of
International Arbitration at :
• http://www.arbitration.qmul.ac.uk/research/
2018/
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Arbitration in a Major Contract
• MODEL SERVICES AGREEMENT COMBINED SCHEDULES 524
pages 26 references to ‘arbitration’
• 2.4
• … the Parties shall seek to resolve the Dispute:
• (a) first by commercial negotiation (as prescribed in
Paragraph 4);
• (b) then, if either Party serves a Mediation Notice, by
mediation
• (c) lastly by recourse to arbitration (as prescribed in
Paragraph 7) or litigation (in accordance with Clause 46
(Governing Law and Jurisdiction)).
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Arbitration
5
FIDIC clause 20
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This session’s aim
• To consider arbitration in Project Management disputes
in England and Wales
• To consider ‘international’ disputes in England and
Wales
• To examine International Arbitration
– Lex Mercatoria
– Delocalisation or Territoriality
• UNCITRAL Model Law on International Commercial
Arbitration
• New York Convention
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Questions on coursework
• DON’T EMAIL PETER FENN
• Check the questions before you ask – has
it been answered before
• If you know the answer or have an opinion
give it
• Think about the question before you ask it
• Ask your friends
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Questions on coursework
• 1. I don’t know what exact meaning of ‘provisions for your client’. From my perspective, I consider this is a kind of action or regulations that should be set up before the conflict and dispute happened, or, it is a proposal for a solution to an ongoing conflict and dispute. YES. If so, can I recommend that my client use game theory to resolve the conflict and dispute? HOW CAN YOU USE GAME THEORY TO RESOLVE CONFLICT AND DISPUTE?
• 2. And Could you please explain what is ‘portfolio’ to me?
– PETER FENN HAS A PORTFOLIO OF LECTURES AND TEACHING, INCLUDING:
• 66061, 66062, 40461, PhD STUDENTS, BSc STUDENTS 11/15/2022 peter.fenn@manchester.ac.uk 28
Questions on coursework
• REFERENCING – IT’S A REPORT NOT AN ESSAY. LOOK AT SOME REPORTS
• IF ITS NOT YOUR IDEA OR WORDS
THEN REFERENCE BUT NOT
NECESSARILY IN THE HARVARD
STYLE
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