Large construction and infrastructure projects generate disputes almost by design. Designs change, ground conditions surprise everyone, prices move and deadlines slip. The question is not whether disagreements will arise but whether they can be settled without halting the work or ending up in years of litigation. That is where arbitrators, mediators and, increasingly, former in-house general counsel come in.
The main tools
- Negotiation and escalation clauses. Most contracts first require the parties' project managers, then senior executives, to try to resolve a dispute.
- Dispute boards. A standing panel, often of three experts, is appointed at the start of a project, visits the site regularly and gives recommendations or binding-until-overturned decisions on disputes as they arise. The FIDIC contracts widely used in international construction provide for dispute avoidance and adjudication boards.
- Mediation. A neutral helps the parties reach their own agreement. Mediation is confidential and flexible. Since 2020 the United Nations Convention on International Settlement Agreements Resulting from Mediation, known as the Singapore Convention, has made mediated settlements easier to enforce across borders in countries that have ratified it.
- Arbitration. A private tribunal hears the case and gives a binding award, enforceable in most countries under the 1958 New York Convention. It is the usual end point for international project disputes.
Why former general counsel
Experienced in-house lawyers have sat on the client side of these disputes. They know how decisions are made inside companies and governments, what a business can live with, and how to stop a disagreement becoming a relationship-ending fight. Many now work as mediators, dispute board members or arbitrators, and their commercial perspective is often valued alongside that of engineers and litigators.
The trade-offs
Early, informal resolution is cheaper but depends on goodwill. Arbitration is binding but can be as slow and expensive as court. The best-run projects tend to invest in dispute avoidance, with a standing board and regular meetings, so that fewer issues reach the formal stages at all.