The Building and Construction Arbitration Board has recently adopted new rules concerning the arbitration procedure for building and construction disputes. The purpose of the new rules is to make the arbitration proceedings more effective and thus quicker.
The Building and Construction Arbitration Board provides dispute resolution for the building and construction industry under the General Conditions for the Works and Supplies in the Construction Sector (AB 92). AB 92, the General Conditions for Turnkey Contracts (ABT 93) and the General Conditions for Consultancy and Assistance (ABR 89) declare that all disputes must be brought before the board.
However, construction disputes - and thus arbitration - are not automatically governed by AB 92, ABT 93 or ABR 89 as general conditions must be agreed upon by the parties in each specific case. Still, as these general conditions are referred to in the majority of contracts, nearly every construction case in Denmark is governed by one of them.
The board provides various dispute resolution models, including:
- preparing arbitral awards;
- commissioning expert opinions;
- mediating; and
- guiding the regulation of AB 92 and ABT 93.
Until now, a normal case before the board lasted from six to 18 months - and longer in some cases. In order to make arbitration proceedings more effective and thus quicker, the board recently adopted a new set of procedural rules. The main change is that parties are now responsible for the proceedings early in the procedure.
Parties made responsible for proceedings
Under the new rules, the arbitration tribunal summons the parties to a preliminary meeting at the beginning of the proceedings. This meeting shares similarities with meetings held during traditional court proceedings in Denmark, and its aim is for the parties to:
- fix deadlines for the exchange of pleadings;
- decide when to appoint experts to report on specific issues; and
- decide when the case should be heard.
If a party fails to meet a deadline for submitting a written pleading, the arbitration tribunal may enforce an award based only on the existing evidence. The arbitration tribunal may also decide that the pleading is not to be considered in the proceedings, although in practice an actual barring of claims is unlikely.
To ensure that the parties do not protract the proceedings, the arbitration tribunal can order a party to indemnify the other party, in full or in part, for the costs incurred by the opponent in connection with the arbitration case. When apportioning the costs, the arbitration tribunal can - now to a greater extent than before - attach significance to the fact that a party has protracted proceedings. The new rules have also made it easier for the board to order a party to pay a special fee if it has delayed proceedings.
Adaptable arbitration tribunal
In general, an arbitration tribunal consists of one professional and two expert arbitrators, appointed by the board depending on the nature of each individual case. As of January 1 2011, if the nature of a case changes or if the problems involved prompt it, the board may adjust the composition of the arbitration tribunal accordingly after the proceedings have commenced.
The new rules took effect on January 1 2011 and apply to all arbitration proceedings brought before the board.(1)
For further information on this topic please contact Peter Schradieck at Plesner by telephone (+45 33 12 11 33), fax (+45 33 12 00 14) or email ([email protected]).