Effectiveness of Arbitration in Contractual Disputes: Tension between Procedural Efficiency and Award Quality

Abstract

The concept of arbitral effectiveness remains an active subject of debate in academia and industry. Despite concerted efforts aimed at enhancing its effectiveness, construction arbitration remains ineffective because much of the debate is based on anecdotes and opinions. The aim of this qualitative multiple-case study is to explain such arbitral effectiveness by applying the theories of distributive justice to three cases involving voluntary arbitration of contractual disputes in construction. Relying on documentary analysis and nine semistructured interviews, findings suggest that perception of distributive justice influenced the effectiveness of arbitration across the three cases. Not only were participants more concerned about the quality of the award than the efficiency of the proceedings leading to the award; they were also grossly misguided in their expectations about arbitration. Although the three cases were found to be ineffective, participants still preferred arbitration as a method of resolving future contractual disputes, suggesting that alternative approaches were bound to be more ineffective. This vote of confidence requires implementation of the proposed internal training improvements and continuous professional development that will impart skills to ensure efficient processes aimed at producing equitable arbitral awards.