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Construction Arbitration

What is the advantage of arbitration in construction disputes?

Arbitration allows for the appointment of arbitrators with specific construction and engineering expertise, ensuring a more competent understanding of technical issues compared to a general court judge.

Do I need a lawyer for a construction dispute?

Yes, construction disputes involve complex contracts (like FIDIC) and technical documentation. A specialized lawyer is essential to navigate these complexities effectively.

Can we settle before the arbitration award?

Absolutely. Parties can reach a settlement agreement at any stage of the arbitration, which can then be recorded as a consent award by the tribunal.

How are experts used in construction arbitration?

Experts are crucial for analyzing delays, quality issues, and quantum (costs). They provide independent reports and testify during hearings to assist the tribunal.

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Construction Arbitration and Dispute Resolution

The construction sector is one of the most active and rapidly growing industries in the Georgian economy, yet it is also characterized by complex disputes. Construction arbitration represents a specialized mechanism ideally suited for resolving conflicts arising in infrastructure and development projects. Unlike ordinary courts, where judges may lack technical knowledge, arbitration allows disputes to be heard by experts in construction law and engineering. This ensures competent decision-making and speed, which is critical to avoiding stalled projects. Legal.ge offers access to top specialists with years of experience working with FIDIC contracts and international construction standards.

Construction disputes often involve multiple parties (employer, contractor, subcontractors, architects) and extensive technical documentation. Specialized lawyers will assist you not only in arbitration representation but also in participating in Dispute Adjudication Boards (DAB) and managing claims. On Legal.ge, you will find professionals who will protect your investment and ensure effective dispute resolution.

What Does Construction Arbitration Service Cover?

This service covers the entire lifecycle of a construction dispute, from prevention to enforcement:

  • Analysis of FIDIC and Other Contracts: Correctly drafting dispute resolution mechanisms in agreements and assessing risks.
  • Claims Preparation and Management: Preparing substantiated claims regarding delays, additional works, and cost reimbursement.
  • Representation in Dispute Boards (DAB/DRB): Protecting interests at the pre-arbitration stage, which is often mandatory in international projects.
  • Management of Technical Expertise: Working with experts to determine construction quality, defects, and causes of delays.
  • Full-Scale Arbitration Representation: Protecting interests in both local and international arbitration institutions (e.g., ICC, GIAC).
  • Enforcement of Awards: Recovering funds or enforcing specific performance based on the arbitral award.

Common Real-World Scenarios

Construction arbitration is used in the following types of conflicts:

  • Delay and Penalties: The contractor failed to complete the facility within the agreed timeframe, leading the employer to claim liquidated damages, while the contractor argues the delay was the employer's fault.
  • Defective Work: After commissioning, the building was found to have latent defects. The parties cannot agree on whether it is a builder's error or a material defect.
  • Payment for Variations: The project design changed during construction, increasing costs. The employer refuses to pay for the additional work, which becomes the subject of the dispute.
  • Termination of Contract: One party unilaterally terminated the contract citing non-performance, which the other party deems illegal and claims damages.

Georgian Legal Framework

Construction arbitration is based on the Law of Georgia on Arbitration and the Civil Code of Georgia (provisions on works contracts). In projects funded by international organizations (e.g., World Bank, Asian Development Bank), FIDIC (International Federation of Consulting Engineers) forms are often used, which Georgian legislation recognizes within the framework of party autonomy.

Also important is the Code of Spatial Planning, Architectural and Construction Activities of Georgia, which defines technical regulations and safety standards. When resolving disputes in arbitration, references are often made to these construction norms and rules.

Step-by-Step Process

  1. Pre-Arbitration Negotiation: Parties attempt to resolve the dispute through negotiation or an engineer's decision (in the case of FIDIC).
  2. Notice of Arbitration: The initiating party sends a notice of arbitration and nominates their arbitrator.
  3. Formation of Specialized Tribunal: Arbitrators are selected, often possessing not only legal but also construction-engineering experience.
  4. Exchange of Documentation: Submission of drawings, logs, expert reports, and financial documents takes place.
  5. Site Visit: If necessary, the tribunal inspects the construction site to establish factual circumstances.
  6. Award and Enforcement: The tribunal issues an award that is binding and enforceable.

Why Use Legal.ge?

Construction disputes require niche specialization. Legal.ge gives you a unique opportunity to connect with lawyers and arbitrators who have deep knowledge specifically in construction law and FIDIC contracts. Through our platform, you will find specialists capable of translating complex technical details into legal language and effectively defending your position.

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