The Arbitration Clause in Fidic Contracts for Major Works

September 5, 2023

The use of standardized contracts can greatly simplify the process of construction projects. One such contract is the International Federation of Consulting Engineers (FIDIC) contract. This contract includes an arbitration clause that serves as a dispute resolution mechanism between the parties involved in the project. This article will explore the arbitration clause in FIDIC contracts for major works and its importance in the construction industry.

The FIDIC contract is a widely-used international contract that sets out the terms and conditions for construction projects. These projects are typically large-scale engineering works, such as bridges, tunnels, and power plants. The contract is divided into several parts, including General Conditions, Particular Conditions, and Annexes. It is important to note that the arbitration clause is located in the General Conditions section of the contract.

The arbitration clause in FIDIC contracts for major works provides a mechanism for resolving disputes that may arise during the construction process. This clause requires the parties involved in the project to submit any disputes to arbitration. Arbitration is a process where an independent third party, called an arbitrator, hears the case and makes a binding decision. The arbitration process replaces the traditional court process and is generally faster and less expensive.

The arbitration clause in FIDIC contracts for major works specifies that the dispute resolution process begins with mediation. Mediation is a voluntary process where the parties involved in the dispute try to resolve the issue with the help of a neutral third party. If mediation is unsuccessful, then the dispute is submitted to arbitration. The clause specifies the number of arbitrators and the rules that will govern the arbitration process.

The importance of the arbitration clause in FIDIC contracts for major works cannot be overstated. Disputes can arise at any stage of the construction process, from design to completion. The arbitration clause provides a mechanism for resolving these disputes in a timely and efficient manner. It avoids the lengthy court proceedings that can cause significant delays and increase costs.

In addition to the benefits of arbitration, the arbitration clause in FIDIC contracts for major works provides another advantage. It ensures that all parties involved in the construction project are subject to the same dispute resolution process. This consistency is important because it ensures that all parties are treated fairly and equitably. There is no advantage given to any party, and all parties are required to comply with the arbitration process.

In conclusion, the arbitration clause in FIDIC contracts for major works is an important tool for resolving disputes in the construction industry. It provides a mechanism for resolving disputes in a timely and efficient manner, avoiding the delays and costs associated with court proceedings. It also ensures that all parties involved in the project are subject to the same dispute resolution process, ensuring fairness and equity. As a result, it is essential to include this clause in any FIDIC contract for major works.

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