Because of their complexity and high stakes, construction disputes are common in Pakistan’s infrastructure projects. Delays, scope variations, financial problems, and poor workmanship are the usual causes of these disputes. Projects in the public and private sectors encounter these difficulties, which call for effective resolution techniques. Domestic and international arbitration has become the go-to process for settling these conflicts.
The Preferred Mechanism of Arbitration
A more effective and adaptable option to litigation is arbitration. The Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011, which incorporates the New York Convention for the enforcement of foreign arbitral awards, and the Arbitration Act, 1940, which establishes a framework for domestic arbitration, govern arbitration in Pakistan. The increasing presence of Pakistan highlights the growing use of arbitration in construction disputes in international arbitration forums.
FIDIC in Conflicts in Construction
Because of their uniformity and clarity, FIDIC contracts are frequently utilised in Pakistani building projects. They include arbitration as the last resort and offer procedures like Dispute Adjudication Boards (DABs) for settling conflicts that arise during the course of a project. Under Pakistani law, FIDIC contracts are relevant to domestic construction projects because of their flexibility in allowing the selection of the governing law.
The function of Pakistani courts
By facilitating the nomination of arbitrators, providing temporary relief, and upholding arbitral rulings, Pakistani courts have a substantial impact on arbitration processes. However, the prompt settlement of disputes is frequently hampered by procedural delays.
Construction Arbitration’s Difficulties
Pakistan’s arbitration system has a number of issues, such as an antiquated Arbitration Act and enforcement delays.arbitral awards, as well as the arbitrators’ and solicitors’ insufficient knowledge of building disputes.
Ideas for Reform
To improve arbitration’s efficacy in building disputes, reforms are necessary. These include implementing the UNCITRAL Model Law, enhancing the skills of solicitors, and encouraging the use of conciliation and mediation in addition to arbitration as forms of alternative dispute resolution (ADR).
Resolutions Specific to FIDIC
Construction problems can be resolved more quickly by implementing FIDIC’s dispute resolution structure, especially its dependence on DABs and arbitration. Consistency and efficiency can be guaranteed by promoting the use of FIDIC contracts in public-private partnerships (PPPs) and other significant infrastructure projects in Pakistan.
Pakistan has to update its arbitration laws, successfully incorporate FIDIC frameworks, and improve its knowledge of construction-specific arbitration in order to handle the increasing complexity of construction disputes. These actions will not only speed up the resolution of disputes but also promote an atmosphere that is favorable to investors, which is crucial for the nation’s economic development.
Also Read Examining Pakistan’s Arbitration Act of 2024: A Transition to International Parameters
References
- The Arbitration Act, 1940 (Pakistan).
- The Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011 (Pakistan).
- FIDIC Conditions of Contract for Construction (Red Book).
- United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (New York Convention).
- UNCITRAL Model Law on International Commercial Arbitration.
- Ali, A. “Arbitration in Construction Contracts in Pakistan.” Journal of Legal Studies, 2023.
- Farooq, M. “Challenges in Enforcing Arbitral Awards in Pakistan.” Pakistan Law Review, 2022.
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