When we talk about construction projects, with their long timelines, multiple suppliers, cost variability, and the constant need for technical decisions, the choice of dispute resolution method is far from a mere detail. It can be decisive in terms of cash consumption, time, and a company’s reputation.

You might think this text will address the various problems a construction project can generate, but in fact it is about a strategic option for resolving conflicts arising from construction projects: arbitration.

Let us start with the essentials. Arbitration is a private method of dispute resolution in which impartial arbitrators render a decision that has the force of an enforceable title. In simple terms, the parties voluntarily choose to submit their disputes to professionals with expertise in the relevant subject matter and agree that the decision will be final and binding, provided that it concerns disposable patrimonial rights.

In the construction sector, this makes particular sense because disputes often involve highly technical issues (construction defects, price variations, specification deviations, schedules, and price adjustments) that require specialized knowledge and, frequently, complex expert evidence.

Instead of waiting years for a judicial decision rendered by professionals who, although highly experienced and legally trained, may not master all the technical issues involved, the parties may submit the dispute to arbitrators who understand the industry and define procedural rules tailored to ensure efficiency, speed, and suitability to the type of project and controversy at hand.

The advantages of arbitration translate into strategic value for the project: it ensures that disputes are decided by industry specialists (who understand construction jargon), provides flexibility by allowing the selection of rules adapted to the specific dispute or contract, and offers the confidentiality necessary to protect the company’s reputation, among many other benefits.

What do the parties gain from this? Faster resolution, increased legal certainty, and a significant reduction in unforeseen costs and public exposure, thereby safeguarding business continuity.

For managers and entrepreneurs, experience shows that some simple precautions make all the difference: including a well-drafted arbitration clause from the outset; carefully selecting the arbitral institution that will administer the proceedings; paying close attention to the procedural rules incorporated into the clause; and establishing objective criteria for the allocation of arbitration costs and expenses, among others.

From a contractual governance perspective, the involvement of lawyers specialized in construction and arbitration is also a structural and strategic element to ensure that contracts and arbitration clauses reflect the technical complexity of the projects, not only to prevent disputes, but also to ensure that, if they arise, the process is efficient, technical, and properly managed.

In short, arbitration is not a universal remedy, but it is a powerful tool when properly designed. It brings specialization, predictability, and confidentiality to conflicts that, in the construction industry, are often extremely technical and costly. When integrated into well-structured contracts, arbitration protects project cash flow and invested capital—without eliminating the need for prevention and sound contract administration.

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