International Construction Law Review
THE RISE AND RISE OF “TIME-BAR” CLAUSES: THE “REAL ISSUE” FOR CONSTRUCTION ARBITRATORS1
HAMISH LAL
BEng, BA(Oxon), Ph D Partner, Dundas & Wilson LLP
I. THE OPPORTUNITY AND BURDEN FOR CONSTRUCTION ARBITRATORS
Construction Arbitrators sitting in domestic and international arbitrations now have a vital role in deciding whether “time bar” clauses are effective as a complete defence to contractors’ claims that are not submitted in accordance with the express notice provisions. This is because the use of express “time bar” clauses in standard forms is rising (and is expected to rise further) and because arbitration is increasingly becoming the final form of dispute resolution.
The rise of express “time bar” clauses in the standard forms is, in particular, evident in clause 20.1 of the FIDIC Contracts for Major Works2
(the Red Book; the Yellow Book; and the Silver Book) and the new clause 61.3 of NEC3 Engineering and Construction Contract.3
The NEC3 is endorsed by the UK Office of Government Commerce and such endorsement is likely to encourage greater use of NEC3 in the public sector.4
In addition, there is now a preference in the public sector that arbitration should be the final tier in the dispute resolution process.5
The rise of “time bar” clauses coupled with the increased use of international and domestic arbitration presents an opportunity for construction arbitrators to resolve finally the jurisprudential tensions that exist
1 This paper was awarded the inaugural Norman Royce Prize by The Society of Construction Arbitrators. It was judged to be the best paper on a topic relevant to or touching on domestic or international construction disputes, including, but not limited to, their resolution and avoidance; and the lessons to be learnt from them. For further details please see www.arbitrators-society.org
2 (1) Conditions of Contract for Construction (for building and engineering works designed by the employer) (the Red Book); (2) Conditions of Contract for Plant and Design-Build (for electrical and mechanical plant, and for building and engineering works, designed by the contractor) (the Yellow Book); and (3) Conditions of Contract for EPC/Turnkey Projects (the Silver Book).
3 Third Edition, June 2005, published by Thomas Telford Ltd: ISBN 0 7277 3359 1.
4 The NEC Third Edition was launched just over a year ago on 14 July 2005. It was endorsed by the UK Office of Government Commerce and such endorsement is likely to encourage greater use of the NEC3 in the Defence Estate and Civil Estate works as well as in the private sector. It is also reported to be used by the Olympic Delivery Authority and the Nuclear Decommissioning Authority.
5 For example, the Nuclear Decommissioning Authority (NDA) has issued details of the “Outline of the Dispute Resolution Process” which expressly states that “in the event the Dispute is not otherwise settled, compromised or resolved in accordance with [senior representatives; adjudication; mediation] it shall be finally resolved by reference to arbitration”.
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