To be competitive, construction companies have increasingly found that they must become involved in projects abroad or involved with firms having an international presence. In much of the world, international arbitration of construction disputes has become the preferred method of dispute resolution because of it is private, binding, and not tied to any particular nation’s laws or legal systems. It is quicker and less costly than litigation and has the added advantage of being able to have industry experts as decision-makers in resolving the disputes. Standard construction contracts, particularly those published by The International Federation of Consulting Engineers (FIDIC), have led to the standardization of international projects.
Volatility has been the consist characteristic of the international oil and gas industry. In an international industry with long terms contracts, often, multiple partners from multiple jurisdictions, government – private sector actors, and being highly vulnerable to price fluctuations, and political and regulatory risks, international arbitration is a preferred method of contractual dispute resolution because of its private, binding, cost effective and efficient nature. More recently, with the global emphasis on mitigating climate change and the Russian invasion of Ukraine with Western companies determined to facilitate international sanctions against Russia’s aggression, international oil and gas companies are utilizing arbitration to resolve their contractual disputes arising from their rethinking of priorities and business focus.
The energy (non-oil and gas) industry includes both renewable; i.e., solar, hydroelectric, wind, etc. and non-renewable; i.e., coal and nuclear sources. The industry’s projects can be characterized by being capital intensive, highly regulated with long term contracts, involving public-private (frequently international) partnerships, and since they provide energy to the public, disrupts of services is not an option. Such characteristics make the industry risk prone to contractual disputes which arbitration is the preferred method of dispute resolution.
The international nature of the mining industry with its complex, capital intensive projects, often involving multiple jurisdictions, and a mixture of private and public parties has meant that that the mining sector has become one of the main users of international arbitration in the last decade. Mining projects are most often long term, highly sensitive to political and regulatory change, and highly sensitive to business risks which characterizes them as having ever present vulnerability to the risk of disputes.
In international commercial contracts in which parties are from different countries and parties often participate in commercial activities in a nation other than their home countries, international arbitration avoids any party or nation from having a so-called “home court advantage” by independent, non-biased third parties to resolve contractual disputes.
The State of Nevada Court-Annexed Arbitration Program began in 1992 and is currently utilized in the Second (Washoe County), Fourth (Douglas County), and Eighth (Clark County) Judicial Districts. The Program was developed as an effective method to facilitate the State’s Courts from becoming overwhelmed by civil cases. For example, in the most populous jurisdiction, the Eighth Jurisdiction, since the inception of the program the average annual number of cases is 4,000 with approximately 85% of the cases either being settled or an award being issued.