Which Dispute Resolution System Applies- Construction Lien or Arbitration?


Courts have difficulty reconcilling the rights of parties to arbitration when there are construction liens, cross claims, counterclaims and third party rights involved. How can arbitration, which is a bilateral dispute resolution system, resolve those disparate rights? And what appeal rights are there for the parties who are dissatisfied with a judge's conclusion that the dispute does not fall within the arbitration clause? The New Brunswick Court of Appeal recently addressed those questions in SNC-SNAM, G.P. a partnership between SNC Lavelin Inc and Snamprogetti Canada Inc. v. Opron Maritimes Construction Ltd.

This decision allows us to take stalk of the legal issues relating to arbitration and construction and mechanics liens.

The first issue concerns the right to appeal a judge's decision on a motion to stay an action in the face of an arbitration clause.

The second issue concerns the discretion of the application judge in the face of an arbitration clause and disparate rights arising from mechanics' or construction liens.

Owners and construction contractors need to know whether their disputes will be resolved by arbitration, by mechanics' or construction lien actions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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