Institutional Arbitration in Construction and Real Estate Disputes: Evolving Mechanisms and Emerging Challenges

Abstract

The construction and real estate sectors are pivotal to global economic development, yet they remain susceptible to complex and high-stakes disputes arising from project delays, cost escalations, technical deficiencies, and regulatory intricacies. Given the industry’s need for confidentiality, procedural flexibility, and technical expertise, arbitration has long been the preferred dispute resolution method. In recent years, institutional arbitration has gained prominence as a structured and efficient alternative to ad hoc mechanisms, particularly in managing the intricacies of construction and real estate conflicts.

This paper critically examines the evolving role of institutional arbitration in these sectors, with a focus on how leading arbitral institutions—such as the ICC, SIAC, LCIA, DIAC, and MCIA—have developed sector-specific rules and procedural innovations. Key features such as expert appointment mechanisms, model arbitration clauses, fast-track and emergency procedures, and technology-enabled hearings have enhanced the appeal of institutional frameworks. However, several emerging challenges threaten to limit their efficacy, including procedural delays, multi-party complexities, high costs, enforcement difficulties, and tensions between institutional procedures and bespoke contract clauses.

Through a comparative analysis of global and regional arbitral institutions, this study explores the strengths and weaknesses of institutional approaches across diverse jurisdictions. It also assesses the influence of national arbitration laws and UNCITRAL principles on institutional development. The paper concludes by recommending targeted reforms, including legislative alignment, industry-specific arbitration panels, institutional capacity building, and enhanced cooperation with professional bodies. These reforms are essential to ensure that institutional arbitration continues to evolve as a viable and effective mechanism for dispute resolution in the construction and real estate sectors.