Construction disputes are technically complex and financially heavy: project defects, missed deadlines, unfinished works and quality arguments demand a fast and qualified resolution. That is why construction contracts frequently contain an arbitration clause, and in Georgia the proceedings are governed by the Law on Arbitration. On this page we explain Articles 11, 17 and 34 of that law — the appointment of arbitrators, interim measures and the appointment of an expert — through the prism of a construction dispute: how to choose a panel with technical competence, how to preserve the condition of the site until the award, and how specific issues are settled by expert examination.
Appointment of Arbitrators and Qualification Requirements (Article 11)
Under the first paragraph of Article 11, it is impermissible to appoint a person as arbitrator without his or her consent, and consent to act as arbitrator must be declared in writing. The appointment procedure is determined by agreement of the parties; absent an agreement, a default applies: where the arbitration is composed of three arbitrators, each party appoints one arbitrator, and the two arbitrators appointed in this way choose the chairperson. If a party fails to appoint an arbitrator within 30 days of receiving the other party’s request, or if the two arbitrators fail to agree on the third within 30 days of their appointment, the court, on the basis of a request by a party, appoints the arbitrator within 30 days of accepting the application; this court decision is final and not subject to appeal. Particularly important for construction disputes is paragraph 6: when appointing an arbitrator, the court or other institution must take into account the qualification requirements agreed by the parties — a requirement of construction experience written into the clause in advance thus operates at the appointment stage as well.
Interim Measures in a Construction Dispute (Article 17)
Article 17 empowers the arbitration, before the commencement of the proceedings or at any stage of them, prior to the final award, to apply security measures at a party’s motion, provided this does not contradict the arbitration agreement. By a written decision the arbitration may, within a reasonable time, order the party to maintain or restore the original state of affairs until the final award — for example, not to demolish the disputed part of the works; to take measures to prevent harm; to preserve the assets against which the award will be enforced; or to protect evidence. In construction practice the last option is decisive: the condition of the site and of the documentation changes over time, and early preservation of evidence secures the very substance of the dispute.
Appointment and Challenge of an Expert (Article 34)
Article 34 entitles the arbitration, unless otherwise agreed by the parties, to appoint one or several experts to present conclusions on specific issues, and to demand that the parties present to the expert the information in their possession connected with the case, hand over documents for inspection or give the expert the opportunity to inspect any document or thing — including materials on the site. After the presentation of the conclusion, the arbitration, at a party’s motion or on its own initiative, summons the expert to take part in the oral hearing; the parties have the right to put questions to the expert and to summon other experts as well. The challenge and recusal of an expert take place on the same grounds and in the same manner as the challenge of an arbitrator under the law — the party’s protection therefore works here exactly as towards the arbitrators.
Frequently Asked Questions
Below we answer the questions most frequently asked about construction arbitration.
Can an arbitrator with construction experience be required?
Yes. The parties write agreed qualification requirements into the clause, and when appointing an arbitrator the court or institution must take those requirements into account.
What happens if a party misses the appointment deadline?
Where a party fails to appoint within 30 days of the request, or the two arbitrators fail to agree on the chairperson within 30 days, the court appoints the arbitrator within 30 days of accepting the application — by a final, non-appealable decision.
How can a party preserve the condition of the site until the award?
By a motion under Article 17: the arbitration orders the party in writing to maintain the original state of affairs, take measures to prevent harm, and protect assets or evidence.
Who appoints the expert, and can the expert be challenged?
The expert is appointed by the arbitration on specific issues, unless the parties agree otherwise; challenge and recusal follow the grounds and procedure for challenging an arbitrator.
How We Help on Legal.ge
The advocates of Legal.ge work with participants in construction projects — developers, contractors and investors: we draft arbitration clauses with qualification requirements, prepare claims and requests for interim measures, take part in organising the expert examination, and protect your interests at every stage of the arbitration. Contact us for a consultation — we will assess your dispute and build a defence strategy with the full toolkit of the law.