Construction Arbitration Clauses for Commercial Contracts

JAMS provides arbitration and mediation services from Resolution Centers worldwide. Its arbitrators and mediators hear and resolve some of the nation’s largest, most complex and contentious disputes, utilizing JAMS Rules & Procedures as well as the rules of other domestic and international arbitral institutions.

JAMS arbitrators and mediators come from the ranks of retired state and federal judges and prominent attorneys. These highly trained and experienced ADR professionals are dedicated to the highest ethical standards of conduct.

Parties wishing to write a pre-dispute JAMS arbitration clause into their agreement should review the sample arbitration clauses below. These clauses may be modified to tailor the arbitration process to meet the parties’ individual needs.

Standard Engineering and Construction Arbitration Clause*

Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in (insert the desired place of arbitration), before (one) (three) arbitrator(s). The arbitration shall be administered by JAMS pursuant to its (Engineering and Construction Arbitration Rules & Procedures) (Engineering and Construction Arbitration Rules & Procedures for Expedited Arbitration). Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.

(Optional) Allocation of Fees and Costs: The arbitrator may, in the Award, allocate all or part of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party.

Standard Engineering and Construction Arbitration Clause Naming JAMS or Another Provider*

Sometimes contracting parties may want their agreement to allow a choice of provider organizations (JAMS being one) that can be used if a dispute arises. The following clause permits a choice between JAMS or another provider organization at the option of the first party to file the arbitration.

*The drafter should select the desired option from those provided in the parentheses.

Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in (insert the desired place of arbitration), before (one) (three) arbitrator(s). At the option of the first to commence an arbitration, the arbitration shall be administered either by JAMS pursuant to its (Engineering and Construction Arbitration Rules & Procedures) (Engineering and Construction Arbitration Rules & Procedures for Expedited Arbitration), or by (name an alternate provider) pursuant to its (identify the rules that will govern). Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.

(Optional) Allocation of Fees and Costs: The arbitrator may, in the Award, allocate all or part of the costs of the arbitration, including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party.

Alternative Dispute Resolution 

1. Design and Construction Phase

a. Project Neutral 

The Owner, Architect and Contractor (collectively, the “Parties”) shall agree to the selection of one or more Project Neutral(s) for the Project. The Project Neutral(s) shall be experienced both in the design and construction of major real estate developments as well as the mediation of design and construction disputes. The Parties shall select the Project Neutral(s) from among the members of the construction panel of JAMS or from other panels as mutually agreed to by the Parties.

The Project Neutral(s), in close consultation with all parties involved in a given dispute (the “Involved Parties”), shall assist in resolving any disputes, claims, or other controversies that might arise from the commencement of design through issuance of the final certificate of occupancy and acceptance of the Project by the Owner. The Project Neutral(s) shall have no adjudicatory authority and, therefore, shall act solely as a mediator in working with the Involved Parties.

If requested in writing by the Involved Parties, the Project Neutral(s) shall attend the regular job meetings at the site of the Project. Also, if requested by the Involved Parties, the Project Neutral(s) shall: (1) attempt to be available to attend any specific job-related meeting, and (2) attempt to be available to confer or meet with any Involved Party or Parties if so requested.

If the services of the Project Neutral(s) are retained, they shall be provided on an hourly basis and the cost shall be borne in equal parts by the Involved Parties which may include the Owner, Architect, Contractor, and any other necessary parties, including, but not limited to, consultants, subcontractors, sub-subcontractors, and suppliers (collectively, “Subcontractors”) except as agreed to in writing between any Subcontractor and the parties.

The confidentiality of any discussion involving the Project Neutral(s) shall be protected by all applicable statutes and case law with respect to mediation.

The term of service by the Project Neutral(s) shall end when the design and construction phases of the Project are complete. The Project Neutral(s) may be involved in subsequent dispute resolution negotiations or proceedings under the terms and conditions set forth herein.