International Construction Law Review
THE APPEAL OF APPELLATE ARBITRATION
Philip L Bruner*
I. INTRODUCTION
The appeal of appellate arbitration has increased with each passing decade of the 21st century. This increasing appeal points toward continuing expansion into the future.
Appellate arbitration is an extension of the arbitration process with which the world’s construction industry long has been familiar and of which it has been quite supportive.
The American construction industry has utilised arbitration for resolution of construction disputes for over 135 years.1 The 1888 “Uniform Contract,” the first American standard form construction contract, which was drafted by the American Institute of Architects and endorsed by the National Association of Builders (predecessor to the Associated General Contractors of America), mandated two methods for binding resolution of disputes between the owner and contractor: (1) the architect was given near dictatorial authority to decide with finality all disputes over “the true construction and meaning of the drawings and specifications,” and issues regarding existence of “sufficient grounds” to justify owner termination of the Contract for cause; and (2) the architect’s decisions regarding computation of payment for delays or for change orders, when timely “dissented” from by the aggrieved party, could be referred to binding arbitration before a panel of three arbitrators (one appointed by each party plus a third selected by them). This format was broadened in the 1905 Edition of the “Uniform Contract” to authorise referral upon timely notice of all disputes not settled by the architect to:
“A Board of Arbitration to consist of one person selected by the Owner, and one person selected by the Contractor, these two to select a third. The decision of any two of this Board shall be final and binding on both parties hereto. Each party shall pay one-half of the expense of such reference”).
* Philip L Bruner is a member of the ICLR Editorial Board and is an arbitrator and mediator of disputes arising out of the construction, engineering, energy, infrastructure and related fields. He is the Director of the JAMS Global Engineering and Construction Panel of Neutrals, Fellow and Chartered Arbitrator of the Chartered Institute of Arbitrators, Fellow of the College of Commercial Arbitrators, Member of Britain’s Society of Construction Arbitrators, Fellow and Past-President of The American College of Construction Lawyers, and Honorary Fellow of the Canadian College of Construction Lawyers. He is the co-author with Patrick J O’Connor, Jr of Bruner and O’Connor on Construction Law, the 12-volume legal treatise regarded as the definitive American work in its field. His CV may be found at www.jamsadr.com under “Neutrals”.
1 See, Philip L Bruner, Rapid Resolution ADR, 31 Const Law 6 (ABA, Spring 2011) (“For well over a century, the American construction industry has promoted the nationwide use of non-judicial dispute resolution methods capable of promptly and fairly resolving complex construction disputes”).
Pt 4] The Appeal of Appellate Arbitration
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