Arbitration is a private, legally binding method of resolving disputes outside of the formal judicial system. In the construction industry of Pakistan, arbitration is widely used due to the complexity and technical nature of disputes. It allows parties to resolve conflicts in a timely manner without going through lengthy court proceedings. Pakistan has adopted the Arbitration Act of 1940, which governs the process, supplemented by the rules outlined in various contractual agreements, including FIDIC contracts.
Legal Framework in Pakistan:
The Arbitration Act of 1940 regulates arbitration proceedings, but the courts can intervene under certain circumstances, such as to enforce arbitral awards or handle procedural matters. The Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 also plays a crucial role in dealing with foreign arbitration.
Arbitration Procedure:
1. Initiating Arbitration:
As per a contractual arbitration clause, either party may issue a notice of arbitration.
Arbitrators are appointed by mutual consent or, in case of disagreement, by the court.
2. Appointment of Arbitrator
Arbitrators may be individuals with expertise in the construction industry.
In case of multi-tier arbitration, institutions like the Pakistan Engineering Council (PEC) can appoint arbitrators.
3. Submission of Claims and Defenses:
Each party submits written claims and defenses, which can include expert reports and legal briefs.
4. Arbitration Hearing:
Evidence is presented in written and oral form.
The arbitrator ensures proceedings follow procedural fairness and considers the rules outlined in the arbitration agreement.
5. Issuance of Award:
The arbitrator issues a binding decision (the "Award").
This award is enforceable as a court decree under the Arbitration Act, 1940.
6. Challenges to an Award:
A party may challenge the award in court on grounds such as misconduct by the arbitrator or procedural irregularity.
Our Services Include:
Arbitration agreements: We draft and review arbitration clauses in construction contracts to ensure enforceability under Pakistani law.
Representation in arbitration:We provide representation in both domestic and international arbitrations, particularly in disputes arising under FIDIC contracts.
Enforcement of arbitral awards: We assist in enforcing arbitral awards in Pakistan, ensuring that clients can recover what they are owed.
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