What Happens When a Party Refuses to Arbitrate?


A construction lawyer must keep track of the general law of contract and arbitration. In turn, many construction cases have settled fundamental principles of the general law. The recent decision of the UK Supreme Court in Dallah Real Estate and Tourism Holding Company v. The Ministry of Religious Affairs, Government of Pakistan is a case in point. This decision dealt with a fundamental element in the principle of competence-competence in relation to the jurisdiction of arbitration boards.

At its heart, this case was just an ordinary construction case. But its international dimensions may take it out of the radar screen of construction lawyers.

In the result, a case of international proportions has some down-to-earth-lessons for construction lawyers. First, if a construction agreement contains an arbitration clause, an award under that clause is only as good as the binding effect of the agreement, unless the opposing party separately agrees to submit to the jurisdiction of the arbitrators. Second, it is difficult to impose a construction agreement on a party which has not signed and expressly agreed to be a party to that agreement.

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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.

© Thomas Heintzman, Arbitration Place | Attorney Advertising

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