Arbitrator Andrew Aglionby says that the main sticking points in construction disputes centre on quality, costs and time, most often when there are changes to contractual terms. Common examples are projects not being completed to the agreed standards, going over-budget or facing very lengthy delays. “These projects involve billions of dollars of investment and one of the biggest challenges is change: a change in the project specifications; a change in the timeframe; a change of mind; or sometimes a change of management,” he states. “When this occurs, and companies suddenly find themselves exposed or facing financial loss, the main question is who should be held responsible?”

The challenges and risks are diverse and substantial. Construction projects will see a multitude of contracts between private and public sector entities, often from different geographies. There have been Middle East investors – usually deploying Islamic finance mechanisms – constructing projects in London, Chinese companies going into Africa and Spanish developers taking on schemes in the US and Latin America. Companies such as Vinci, Flour, Grupo ACS, Hochtief and Skanska, meanwhile, have created global portfolios of projects.

As such, establishing minimally disruptive dispute resolution processes for cross-border projects – including where cases should be heard – are now high on the agenda for all parties. Aglionby, who practised in Hong Kong for 17 years, notes a trend towards resolving infrastructure disputes locally, but exceptions, particularly on smaller projects remain. “Asian-related disputes now gravitate more towards Hong Kong or Singapore, while cases in the Americas may go to New York or Miami,” he says, pointing out that contracts governed by the industry standards of the International Federation of Consulting Engineers (also known as FIDIC) have tended to focus on the UK.

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