Arbitral Tribunal Proceedings Case Study: Egyptian Large-Scale Construction Project

Abstract

This paper investigates how arbitration is used as a dispute resolution mechanism in Egyptian large scale construction projects and what are the types of issues that construction professionals should address when they encounter claims in the Egyptian construction market. To meet the goals and objectives of this study, a research project was conducted to study the arbitration process for a dispute that was in excess of $31 million, which arose out as a result of the proceeds of a large-scale project with an original contact price of $85 million that was constructed in Cairo, Egypt. This research project analytically investigated the background of the conflicts, the arbitral proceedings, and the award issued by the arbitral tribunal. Based on such thorough study, it was concluded that arbitration did not provide a timely and cost-effective resolution for the said dispute. Moreover, the same study has raised questions in relation to the overall management of megaconstruction projects in Egypt namely: (1) the impartiality of project managers; (2) the magnitude of change orders and consequent delays; (3) the magnitude of claimed amounts; and (4) the level of management and administration of claims and disputes. It is perceived that this paper would trigger professionals to think of other suitable dispute resolution mechanisms, such as dispute review boards, for settlement of claims arising from Egyptian large scale construction projects. Furthermore, this study would be of value for contractors and owners who intend to work in the Egyptian construction market.