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Multi‐Party and Multi‐Contract Arbitration in the Construction Industry

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I am delighted to have been invited to write a foreword to this book. A proper discussion of multi‐party and multi‐contract arbitration issues in the construction sector is long overdue. Disputes are inherent in the construction industry. 

Large construction projects invariably involve a multitude of contracting parties, who are generally bound by a series of bilateral contracts. Controversies arising under one of these contracts often have repercussions on parties not directly bound by that contract. 

For example, an employer’s claim against the main contractor based on alleged defects in the subcontractor’s work will often trigger a recourse claim by the main contractor against the subcontractor. Parties to international commercial contracts, including construction contracts, regularly resort to arbitration as a main dispute resolution method because of the advantages that arbitration offers over litigation. Arbitration proceedings typically take place only between the (typically two) parties to the contract. 

Third parties, who are non‐signatories to that contract, may not participate in the same proceedings. As a result, related disputes on similar points of law and fact, such as the one mentioned above, often have to be resolved in parallel arbitration. 

This takes time, incurs costs and may result in inconsistent findings. Multi‐party arbitration is not a new topic. It has been the focal point of discussion and debate for several decades. Numerous articles and a number of other contributions have been written on the topic. In this context, it may seem surprising that very few of these contributions focus on the construction industry, where multi‐party disputes occur on a regular basis. 

The present book is the first book on the market that provides for an in‐depth analysis of the legal issues associated with multi‐party and multi‐contract arbitration in the construction industry. Having the background of a practising lawyer and a scholar, the author has approached this intrinsically difficult subject and its attendant problems from both a theoretical and a practical perspective. In Chapters 1 and 2, the book opens with an introduction to the problem of multi‐party arbitration. In Chapter 3, the author steps into the shoes of each major participant in construction projects with the purpose of identifying their potential interests in participating in this type of arbitration. 

Chapter  4 contains an in‐depth analysis of the approaches to multi‐party arbitration under arbitration rules commonly encountered in construction disputes. In this analysis, the author draws upon numerous articles and commentaries. In Chapter 5, different legislative approaches to the problem are described and evaluated. 

In Chapter  6, the book then focuses on the contractual solutions to multi‐party arbitration in a wide range of popular international and  domestic standard forms together with case law pertaining to them. 

the contractual solutions available so far. The purpose is to inform users of the forms of potential pitfalls and complexities that may result from the application of these   solutions. The guidelines for drafting multi‐party arbitration clauses suggested by the author in Chapter 7 are of particular interest for practitioners.

 This chapter contains a  practitioner‐ oriented discussion of how to create a proper multi‐party arbitration clause. Last, but not least, the author has proposed an intriguing redraft of the arbitration clause in the FIDIC Red Book, which contracting parties willing to engage in multi‐party arbitration may want to adopt. 

The book is the first comprehensive work on the topic. It is well thought out, clearly structured and written in a straightforward style. It offers an up‐to‐date and comprehensive coverage of existing materials and case law, tacked with the author’s original ideas as to how the current regulation of multi‐party arbitration may be improved. In view of the importance of the issues it addresses, this book will be a precious reference work for practitioners and scholars alike.