ConstructionQuantity Surveying

Arbitration in Construction


Quantity Surveyor doesn’t require to possess manual labour skills like in other jobs in the construction industry. It needs a good understanding of finance and budgeting to be a Quantity Surveyor or cost estimator. However, it is not the only skill required. Since sometimes he should have the ability to take part in dispute resolution within Arbitration in Construction. One of the services QS has to perform outside their professional domain is adopting Alternative Dispute Resolution Methods.

There are several Alternative Dispute Resolution (ADR) methods available in resolving disputes occur in the construction industry. ADR methods are used to solve disputes without going to courts in order to overcome several disadvantages faced in litigation. There are Non-Adversarial methods like mediation, negotiation and conciliation, and Adversarial methods such as Arbitration and Adjudication.

Among those Arbitration is a major and mostly used ADR method to Litigation in the courts. However, no party is obliged to file a dispute for arbitration, unless they have agreed to do so at the first place through the terms and conditions in their contract. If they have agreed to use arbitration as the method of settling disputes under the contract, they cannot find legal proceedings prior to arbitration.

When a dispute arise, Quantity Surveyor has to choose a suitable dispute resolution method. Sometimes he has to play the role of an arbitrator in the situations of disputes between business parties because he possesses a broad knowledge in the field. However, not all the QS perform as Arbitrators, there are limited number of QSs who are arbitrators, nevertheless as a QS it is important to learn about Arbitration because except for being an arbitrator he can be an advisor, facilitator, representor or a witness in the process.

The benefits of arbitration, as opposed to litigation, include the fact that the dispute remains a private and confidential matter, the procedure is flexible, the process should be faster and less expensive and the arbitrator will generally be someone with experience and expertise in the subject matter of the dispute.

In other hand, construction arbitration is similar to lawsuit where it can be also called as “lawsuit without court involvement”. The similarities are that the arbitrator acts like a judge in the court by hearing submissions, considering the evidence and making an award. This evidence will also include evidence of witnesses and expert witnesses like in court trials. And in hearing evidence witnesses will be examined under oath like in court trials. The award given by the arbitrator will be binding on parties like the judgment given by a judge in the court. Also, the arbitral process is governed by the rules of natural justice and basic  legal principles like in litigation.

Even though construction arbitration has similarities to litigation, they are not identical. Since it is used as an alternative to the cumbersome process of litigation. The significance of going through Arbitration instead of lawsuit is, its ability to maintain confidentiality which is very important to commercial parties.  Its procedures are held in private, the award of the arbitrator and the documents submitted during the procedure are kept confidential to the parties, without publishing those to the public like in litigation.

Unlike in court trials, the parties have a greater liberty to define and adjust the procedure while following arbitration clauses in the agreement because the arbitrator/s act as both judge and the jury and being flexible than a judge in the court. Those who are appointed as the arbitrators are usually those who has experience in construction field (eg.QS, construction lawyer) which makes arbitration process an effective way of solving construction disputes than going to a judge with little experience with the highly technical issues that may arise during the dispute resolution.

Arbitration is expected to be less formal than litigation therefore the rules of evidence and civil and procedures are not expected to be followed as strictly as in lawsuit. Typically appeals are not entertained in arbitration. The award of the arbitrator will be considered as final. This is done in order to speed up the procedure, save time and money, which is an advantage of following arbitration. However, an aggrieved party, if unsatisfied with the award, can file further action in court, requesting to overturn that award granted by the arbitrator.

Arbitration Process in Construction

  • Initiating the arbitration – Most of the time commercial arbitration arise from the contract entered by parties. By following the arbitration clauses, one party make a request to apply for arbitration in order to dissolve the dispute. Then in order to commence the proceedings one of the parties have to serve a notice on the other party, requiring the appointment of or agreement to appoint an arbitrator.
  • Appointing an Arbitrator – Both parties can appoint an independent third party according to prior agreement to solve the dispute. (also, an arbitrator can be appointed by a statute or by a court order in minor disputes). They have the choice of appointing one arbitrator or a panel of arbitrators with a sound knowledge, understanding and experience in the construction field and the issue at hand.
  • Preliminary meeting – this is the meeting of parties with the presence of the arbitrator/s to review the issue and to deicide the timetable for proceedings. Here the arbitrator and parties’ representatives get a chance to meet face to face so that they can understand each other with whom they are going to be dealing with, the parties can have an idea about the arbitrator’s knowledge, behavior,  credibility, trustworthiness and authority he has, so that they can trust and have confidence in.
  • Statement of claims and responses – In this stage the claimant submits a statement mentioning the issue and the remedies seek by them. This statement of claim includes the parties to the dispute, the contract, the arbitration agreement, description of the issue and the remedy sought, the legal basis of the claim, and should attach documentary and other evidence.Then the respondent has to reply by a statement denying the claim or making a counter claim. In this statement of response, the respondent should include the points of agreement and points of disagreement. In disagreements the respondent should state its factual and legal basis and refer to relevant evidence. Those evidence should be either appended to its statement or included with the statement of claim.Afterwards, the claimant be given an opportunity to reply to the statement of response which should only address new issues raised in the response and should not raise new matters or put forward new evidence. Sometimes the respondent will also make a counterclaim.
  • Discovery period – during this period, the documents and information is exchanged with the other party to discover the background of the issue.
  • Submit the issue to the Arbitrator with evidence – The statement of case is submitted to the arbitrator with all documentary and other evidence including, copy of the contract, Plans, letters, emails, meeting minutes, progress reports, programmes, price quotas, photographs, videos, accounts, etc. As in litigation, expert evidence may also be provided. Construction specialists such as Quantity Surveyors, structural engineers, Architects can engage in arbitration as expert witnesses, to provide expert evidence. A quantity surveyor is likely to be involved to give opinion evidence on disputes about the measurement, valuation or cost of the works.
  • Hearing – The hearing is proceeded according to a suitable method selected by the arbitrator. Each party get the chance to present their case to the arbitrator and listen to the case of the other party too. A party can present their case to the arbitrator by themselves or can be represented by a lawyer or other person. That another person would be a professional person who understands the case and knows how to present it.When evidence of the witnesses are taken up, parties can question and challenge the other party which is somewhat similar to the lawsuit. The arbitrator will be hearing both parties and accepting the summery of both parties and decide on the suitable award.When considering burden and standard of proof of the matters, the general rule in arbitration is that ‘he who asserts must prove’. Thus, the legal burden of proof is upon the claimant, who must provide evidence to show that all aspects of the points of claim appear to be correct. If the claimant succeeds, the evidential burden will shift to the respondent to show why the points of claim are incorrect.  In order to succeed, the party bearing the legal burden should provide evidence to prove its case on the ‘balance of probabilities’. It is the duty of the arbitrator to find in favour of the party who has, on the balance of probabilities, best proved its case.

    The duty of the arbitrator is to act fairly and impartially by giving both parties opportunity to present their cases. The arbitrator has to decide a proper procedure to follow, subjected to any contractual rules and obligations, and avoid unnecessary delay in solving the dispute. Hear the case, take all evidence in to consideration and provide a reasonable award, provide the reasons for the award and award costs (usually awarder to the successful party).

  • Granting award – By considering the evidences, submissions made by the parties, the Arbitrator can make a final decision upon which both parties will be bounded. To do this efficiently and reasonably the Arbitrator should be an expert and should possess a good base of knowledge and skills. The award will be in writing, including the reasons for the decision. The award may include: payment of an amount of money, order a party to do/ refrain doing an something (injunction), order specific performance etc. This award will be final and binding on both parties. No appeal available except for going in to litigation.

What is an Arbitral Tribunal?

It is a tribunal to solve disputes through arbitration. This may consist of a single arbitrator, two or more arbitrators (a panel) with or without a chairman or umpire. When there are two or other even number of arbitrators an additional arbitrator is appointed to avoid the deadlock that can arise. Arbitral tribunals are created both in ad hoc arbitration proceedings and institutional arbitration proceedings. In ad hoc arbitrations the tribunals are appointed by the parties to the issue while the institutional arbitration proceedings the arbitrators are appointed by an institution providing arbitration services. The parties can decide on the number of arbitrators they want in the tribunal.

Pros and cons of Arbitration:


  • The main advantage of Arbitration is “confidentiality” of the procedure. As the procedures are held in private, without any public record like in litigation, commercial parties like to follow this method of dispute resolution.
  • Parties can select an Arbitrator/ panel of Arbitrators with a good knowledge and understanding about the construction field.
  • This is a speed process with compared to litigation. The speed depends on the arbitrator and the way he conducts the proceedings.
  •  The dispute resolution process is flexible where it can be solved with agreement of the parties.
  • The award which is granted is enforceable as a court judgment.


  • Some arbitrators follow strict rules and procedures like litigation which makes the dispute resolution inflexible, formal and slow down the process.
  • Arbitration fee is very high in complex cases.
  • Limited cross-examination of the witnesses.
  • Limited opportunity for appeals.

International Instruments on Arbitration:

  • New York Convention on Recognition and Enforcement of Foreign Arbitral Awards.
    This is also called as “New York Convention” where most of commercial countries are signatories.
  • The Geneva Protocol of 1923 and 1927.
  • The European Convention of 1961.
  • The Washington Convention of 1965.
  • The UNCITRAL Model Law on International Commercial Arbitration.
    The UNCITRAL Model Law on International Commercial Arbitration is a non-binding model law which was created by the United Nations Commission on International Trade Law in 1985, which was further amended in 2006. Although this is not a mandatory law, the member states can incorporate it in to their domestic law. This is slightly different from the UNCITRAL Arbitration Rules. UNCITRAL Model Law on International Commercial Arbitration provides laws that governments can adopt in making their domestic laws, while the UNCITRAL Arbitration Rules are for the private parties to select and adopt in their contracts as arbitration clauses to solve disputes between parties.
  • The UNCITRAL Arbitration Rules.
  • The Sri Lankan Arbitration Act 1995.

Application of Arbitration in different counties:


During 13th century Arbitration developed in England as a result of the disputes arose in trading. Those disputes between traders were usually referred to a third party to resolve. These procedures were traditional and according to their own systems and not according to any legal principles however later on developed in to law by custom. Eventually, arbitration grew up to a private dispute resolution method which became popular with commercial parties.  The first Arbitration Act of England was passed in 1698. England, Wales and Northern Ireland, is now governed by the Arbitration Act 1996.


The main statute used in USA with regard to Arbitration is, the Federal Arbitration Act (FAA) of 1925. At the beginning it was believed to be applied to federal courts only but currently it governs both in the state and federal levels. Now the laws from the Act are included in contracts as mandatory arbitration clauses.


The Korean Arbitration Act is the main legislation that govern the Arbitration in Korea. The officially appointed body to resolve disputes in arbitration is the Korean Commercial Arbitration Board.


The main legislation regarding arbitration in Sri Lanka is the Arbitration Act No. 11 of 1995 which was enacted to repeal the Arbitration Ordinance and certain sections in the Civil Procedure Code. The aim of this, is to give effect to the convention on Recognition and Enforcement of Foreign Arbitral Awards.

Leave your vote

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

Related Articles

ConstructionQuantity Surveying

Quantity Surveyor Roles in the Six Construction Stages

In practically every stage of the construction process, a quantity surveyor performs...

Quantity Surveying

Quantity Surveying in Sri Lanka

Quantity surveyor (QS) is one of the professional advisors to the construction...


Most demanding Jobs in the Construction field

Well, probably you may be finding a job in construction industry at...

Key points of a Quantity Surveyor
ConstructionQuantity Surveying

What are the key points that a 2year experienced quantity surveyor should know?

Drawings – Drawings are the language of a Civil engineer. It is...

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.