IN THE PROFESSION
reasoned award allows a decision to identify which claims are being allowed or discounted . Additionally , due to the complex and tiered arrangement of construction projects , parties not named in the arbitration proceedings , including subcontractors , designers , and insurance companies ( to name a few ) may have stakes in the outcome or ultimate liabilities . A reasoned award also helps give closure to the dispute . Parties in a complex construction case are repeat players . They want to understand what lessons can be learned from a dispute even if the outcome is not favorable .
FINAL AND BINDING DECISIONS
Construction case arbitration awards are rarely overturned or modified in court . (“ If there is one bedrock rule in the law of arbitration , it is that a federal court can vacate an arbitral award only in exceptional circumstances . [ citations omitted ] In accordance with this country ’ s ‘ liberal federal policy favoring arbitration ,’ AT & T Mobility LLC v . Concepcion , 563 U . S . 333 , 339 ( 2011 ), ( citation omitted ) our courts understand arbitration as a complete method of dispute resolution , not ‘ merely a prelude to a more cumbersome and time-consuming judicial review process ,’ Hall Street Assocs ., LLC v . Mattell , Inc . 552 U . S . 566 , 588 ( 2008 ) ( citation omitted ).” Grupo Unidos Por El Canal , S . A ., et . al ., v Autoridad de Canal de Panama , 78 F . 4th 1251 ( 11th Circuit 2023 ), ( cert . denied 2024 )). As such , appeals are rarely successful . Historically , some contracting parties have been concerned about the essential absence of appellate rights in arbitration , preferring to trust the legal rulings of a court . Contracting parties who choose arbitration prefer this finality , trusting instead in the logic of the process and the competence of the arbitrators . As a practical matter , most complex construction disputes ( like most commercial disputes , statistically ) settle before hearing . The final and binding nature of arbitration tends to promote settlement . In the event a case is fully arbitrated and results in a reasoned award , most parties are content to accept the outcome and glad to avoid the expense of an appeal that is not likely to succeed .
INTERNATIONAL ENFORCEABILITY
Construction projects and participants are increasingly international , both in terms of supply chain and multilayered contracting parties . International parties are comfortable with arbitration as a dispute resolution mechanism and less comfortable with court proceedings . The United States and 172 other countries are parties to the New York Convention that governs international arbitrations . See Contracting States | New York Convention
The New York Convention is codified in Chapter 2 of the Federal Arbitration Act . The presumption against vacatur discussed above applies with even greater force to international arbitrations reviewed by U . S . federal courts . See Mitsubishi Motor Corp . v . Soler Chrysler Plymouth , Inc ., 473 U . S . 614 , 631 ( 1985 ). Both international and U . S . courts recognize that the complex system of international commerce only functions properly when standardized rules are applied , permitting predictable results around the world . See also Grupo Unidos , supra . Accordingly , arbitration of construction disputes involving multi-national parties is a favored dispute resolution mechanism worldwide . 16 NOVEMBER / DECEMBER 2024