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HOW DO INTERNATIONAL CONSTRUCTION ARBITRATORS MAKE THEIR DECISIONS? THE STATUS OF SUBSTANTIVE LAW

International Construction Law Review

HOW DO INTERNATIONAL CONSTRUCTION ARBITRATORS MAKE THEIR DECISIONS? THE STATUS OF SUBSTANTIVE LAW * HAYTHAM BESAISO Lecturer in Project Management, University of Cumbria (email: haytham.besaiso@cumbria.ac.uk) PETER FENN Reader, School of Mechanical, Aerospace, and Civil Engineering, University of Manchester (email: peter.fenn@manchester.ac.uk) ABSTRACT International construction projects have become widespread in today’s globalised and complex world. This modern phenomenon could not have been possible had international arbitration not been there. International arbitration is the fundamental dispute resolution method that ensures that all parties have access to justice. To realise a properly functioning justice system, it is vital to have common knowledge on the mechanism of determining the parties’ rights and obligations. Otherwise, lacking an adequate degree of certainty, the justice system would be incomplete, inefficient, unsatisfactory and perhaps unsustainable. A game with no rules, or without rules known by all players, is not a game at all. Unfortunately, empirical knowledge concerning how arbitrators make their decisions on the substance of disputes arising from international construction projects is lacking. Therefore, this research, which commenced with documenting and problematising this lack of knowledge, aims to bring empirical insight into the substantive grounds of arbitral decision-making process in international construction disputes. This article, constituting the second publication of this research, aims to examine to what extent international arbitrators apply the law as the substantive norm and to provide an explanation for that. It relies on in-depth semi-structured interviews with 28 international construction arbitrators. It also draws on evidence from international construction arbitration awards and the relevant literature. This article argues that arbitrators follow the proper law to determine the parties’ disputes. However, the devil always lies in the detail. Keywords: International construction arbitration – Decision making – Substantive law – Contract interpretation – Mandatory law * This paper has been peer-reviewed by the ICLR peer-review board. 200

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