How International Construction Arbitrators Make Their Decisions: Status of Commercial Norms and International Construction Law

Abstract

International construction arbitration is the main dispute resolution technique for international construction projects. The number of international construction arbitrations has significantly increased during the last decades. This increase has been accompanied by an increased interest in understanding how arbitrators make their decisions on the substance of disputes arising from international construction contracts. This paper constitutes the third publication of research undertaken to develop a conceptual framework to explain this arbitral decision-making process. It aims to assess the extent to which arbitrators take into account commercial norms and international construction law when determining the parties’ disputes. This research follows a grounded theory approach and draws on primary and secondary data. The primary data are collected via semistructured interviews with 28 international construction arbitrators. The secondary data are collected from international construction arbitration awards and scholarly writings. This study finds that international construction arbitrators appear to pay considerable attention to the parties’ contracts and the governing law of the contract when determining their disputes. However, the parties’ contracts and its governing law do not seem to be the only sources of obligations. Some arbitrators are receptive to arguments based on commercial practice and international construction law but do not concur on the authority of these substantive norms. The prevailing opinion seems to give customs and usages the same authority they have under the substantive law and to constrain the invocation of international construction law.