International Construction Law Review
Introduction
Chantal-Aimée Doerries KC
Professor Douglas S Jones AO
Two themes animate this edition of the ICLR. One is the increasingly international nature of construction law, and its limits. Investment treaty regimes and standard-form contracts have brought uniformity across local jurisdictions, even where jurisdictions have not fully domesticated the relevant procedures. Still, there exist meaningful ways in which construction law remains locally fragmented. The other is the problem of defective construction, and particularly defective residential buildings. Our contributors grapple with the meaning of statutory provisions for defective buildings, potential areas for reforms, and difficulties in assessing damages. On both strands, the research is analytically rich and important to construction lawyers around the globe.
In Investor-State Arbitration in The Construction Sector, Gordon Smith reconsiders the role of bilateral investment treaties (BITs) in protecting international construction work. The arbitration mechanisms in such treaties are often either the best or the only recourse available to investors. Smith begins by examining the range of preconditions that must be satisfied to access that recourse, including the meaning of the statutory terms “national”, “investor”, and “investment”, and the role of contractual preconditions. The article explores the different approaches taken by tribunals to defining “investments” and argues for contractual preconditions to be seen as a matter of admissibility rather than jurisdiction. It then considers the full range of substantive protections provided by these regimes, including minimum standards of treatment, non-discrimination, and observance of obligations; freedom from expropriation; and protection and security, as well as the thorny issue of state attribution and responsibility. Finally, the article takes as a case study the recent decision in Garanti Koza LLP v Turkmenistan ICSID Case No ARB/11/20, in which many of these issues were engaged. The case illustrates not only the difficulties in construction projects in unfamiliar jurisdictions and the circumstances in which BIT arbitrations are a party’s best option, but also the inherent downsides of cost and delay involved.
We then turn to the question of whether there is an international construction law analogous to the law merchant. Professor Doug Jones and Sarah Biser, in To What Extent is There an International Construction Law?, argue that despite the standardisation of construction practice across jurisdictions, construction law itself remains fragmented. The piece begins by exploring the rise of standard-form contracts, spurred by increasingly multinational businesses, construction contracts, and contractors’ supply chains. Nevertheless, it observes, local legal systems remain essential to every aspect of the process, as shown by the example of the Australian Consumer Law. The FIDIC standard-form contracts face issues in jurisdictions outside the common law, and their dominance is being challenged by the proliferation of local standard-form contracts. Hence, though issues of time, cost, and quality of performance are common across different regions, they tend to operate within the constraints of local legal systems, although
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