In construction contracts, escalation clauses are frequent but they can become procedural deadlocks: a dispute within the dispute.
The key questions often revolve around the workability of such clauses when a dispute has already arisen:
- Has a dispute crystallised?
- Were the required steps properly initiated?
- Can arbitration be commenced while discussions remain ongoing?
- And most importantly: what happens where a contractual time bar, limitation period, or urgent need for interim relief leaves insufficient time to complete the agreed procedure?
“Properly used, an escalation clause is not a barrier to arbitration: it is a controlled procedural pathway. Poorly used, it becomes the first dispute the parties must arbitrate.”
In the third article of our Contract Management Series, "From Contract Management to Arbitration: Compliance with Escalation Clauses in Construction Arbitration", we explore how escalation clauses can be an effective tool to access arbitration in the best conditions but also how and when they can become a procedural deadlock. Through practical insights, our goal is to help contract managers and in-house counsels draft, understand, and implement escalation clauses that promote the efficient resolution of disputes rather than crystallising them.
Read the third article bellow!
