Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1470131
www.lexpert.ca 9 Arbitration is better suited to disputes in the infrastructure space, says Pappas. Clients prefer it because they want prompt resolu- tions. Arbitration can be much quicker and has either limited appeal rights or none. As well, parties are entitled to select the arbi- trator and can choose one with expertise in the area. While all disputes have unique complexities, he says, construction disputes are particularly complex. ey oen involve complicated engineering issues, and delay-related concerns can require numerous experts to provide things like "critical path-delay analyses." Another advantage, says Pappas, is that arbitral awards are enforceable in most of the world because of an international constella- tion of treaties. e New York Convention, also known as the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, has 168 country signatories. According to Pappas, the network of international arbitration treaties is espe- cially important in the construction space. Canada now has more foreign contractors undertaking infrastructure projects and foreign investors taking ownership inter- ests. Arbitration provides a smoother path for those in a dispute with a counterparty owning assets outside Canada. Depending on the jurisdiction, enforcing a court ruling in a foreign country can be "quite chal- lenging," he says. But the trend toward arbitration does have a downside, says Pappas. One of the advantages for clients is that they occur confidentially. But that means awards are not in the public domain, which stifles the development of the law. Arbitration institu- tions are beginning to try to change that, he says. ey are now including an intention to publish awards in their rules, although those will be anonymized. For example, the International Chamber of Commerce issued a notice last year indicating they would publish awards online unless the parties object. e preference for arbitration over litiga- tion is partly due to owners and contractors wanting subject-matter experts to arbitrate their disputes, says Sharon Vogel, a partner at Singleton Urquhart Reynolds Vogel LLP and co-chair of the firm's construction and infrastructure practice group. "We're seeing a desire from both owners and contractors to try to resolve disputes more swily," she says. To achieve a faster result, parties employ innovative alternative dispute resolution techniques, including seeking procedures outside of the contract's dispute-resolu- tion framework, says Vogel. is approach includes mediating, even when the contract does not require it. "Parties want resolution of disputes much faster than a traditional mechanism will deliver," says Bruce Reynolds, co-managing partner and co-chair of Singleton Urquhart Reynolds Vogel's international construction projects group. One creative approach he has taken recently is to hire a single arbitrator to produce a fast-track arbitration award on a single legal issue concerning the interpre- tation of a critical contract provision on which the parties differ. ey hire an arbi- trator, particularly one with subject matter expertise in construction and construction contracts, says Reynolds, and the arbitrator issues a final and binding award as to how the parties are to interpret that provision. While one party will not like the outcome, it provides clarity and allows them to finish the project more efficiently, he says. According to Reynolds, public authorities at the federal and provincial levels include dispute resolution boards, also known as standing committees, in their contracts for large infrastructure projects. ese boards receive disputes from parties and resolve them on an "interim binding basis." e winner must pay, but either party can reopen the issue later, reinitiate the dispute and arbitrate for a final and binding award. In recent years, there has been a trend toward more extensive and complex infra- structure arbitration in Canada, says Joe McArthur, who practises commercial litiga- tion and arbitration in the Vancouver office of Blake Cassels & Graydon LLP. "We're seeing a desire from both owners and contractors to try to resolve disputes more swiftly" Sharon Vogel SINGLETON URQUHART REYNOLDS VOGEL LLP "The vast majority of large, complex construction disputes and infrastructure disputes are being resolved by way of arbitration rather than traditional court litigation" Vasilis Pappas BENNETT JONES LLP