Contractual dispute resolution procedures – how far do parties have to comply with the pre-conditions to formal proceedings?
The seminal House of Lords’ judgment in Channel Tunnel Group v Balfour Beatty (1992] highlighted the importance given to compliance with contractual dispute resolution procedures. Such provisions generally require the parties to refer their dispute to a tiered process; only after exhausting the process at each tier are the parties allowed to bring the dispute before an arbitral tribunal or court. This sort of dispute resolution procedure is frequently encountered in the PFI/PPP market in the UK and is a feature of many bespoke forms used on construction projects in the UK as well as in FIDIC standard form contracts used internationally. However, there are limitations to the process and these can give rise to some interesting outcomes. The subject is topical and relevant to all those concerned with dispute resolution in the construction sector.