The adoption of arbitration agreements within international construction contracts continues to be popular. Arbitration, rather than deference to the national courts, allows parties to retain a large element of control as to how any subsequent dispute will be settled.
Parties can specify the applicable rules, a sole arbitrator or a panel, particular qualities, and experience as well as the language of proceedings all from the outset of their professional relationship.
However, this opportunity to shape how any future dispute will be resolved may not be used to its full potential or at all. Often termed the 'midnight clause' the agreement to arbitrate can be given scant attention when compared with the detailed terms of the parties' bargain and issues that are unknown or could not have been foreseen when executing the contract may arise. These can include jurisdiction, procedural rules, mandatory laws and authority, coupled with unilateral changes or as we have seen recently, the abolishment of entire arbitral centres.
A good starting point is to ensure that the agreement to arbitrate incorporates the rules of one of the leading arbitral institutes. Trowers' International Construction Team conduct arbitrations across multiple jurisdictions, including across the GCC and the UK, and we have experience of many different institutional rules. With several notable longstanding arbitral institutions, each with its own arbitration rules, the choice as to which one should be adopted in an arbitration agreement is an important one and should not be overlooked. From the ICC, who has reported that it was "the world's most preferred arbitral institute" to more localised arbitration centres, which set of rules should be selected? Whilst no one set of arbitration rules will suit every case, it is important to know and understand the implications of the chosen arbitration rules.
In our article, we have compared the key features of the Dubai International Arbitration Centre (DIAC) Arbitration Rules 2022 with the available arbitration rules in major GCC jurisdictions in which we work (namely the United Arab Emirates (UAE), Kingdom of Saudi Arabia (KSA), the Kingdom of Bahrain (Bahrain), the Sultanate of Oman (Oman)) as well as the United Kingdom. Our comparison, along with the identification of key questions that should be considered, are aimed to assist in determining which rules are most suitable for each and any arbitration agreement.
