THE IMPACT OF INCLUSION OF ARBITRATION CLAUSE BY REFERENCE IN MAIN CONTRACT AND SUB CONTRACT DOCUMENTS IN THE CONSTRUCTION INDUSTRY AND ITS NEGATIVE CONNOTATIONS

摘要

In construction contracts an arbitration clause comes into being, as an exclusive clause in the mainrncontract or by reference to another contract. In the dispute resolution process the Arbitrator derive hisrnpower from the arbitration agreement and from the applicable law which invariably makes it mandatoryrnfor the arbitration clause to be in writing. Such clause prevents Court jurisdiction since party autonomyrnwill prevail. Therefore, it is important to identify, which form of arbitration clause would serve thernpurpose, since the usage of such clause in the dispute resolution process may become void if it isrnincorporated by general reference. The Court will not allow proceedings unless the arbitration clause isrnproperly constituted. The Arbitration Clause by reference in itself could lead to disputes! An arbitrationrnclause in a contract comes into being through a separate agreement, as an exclusive clause in the mainrncontract or by reference to another contract. Therefore, it is important to have a properly constitutedrnclause, and if it is by specific reference or general reference, or both, it would pave the way for disputes.rnThe arbitration clause is a self-contained co-lateral contract preventing Court jurisdiction and wouldrnsurvive even if the main contract is void. When the arbitration clause is incorporated with lacuna, thernopposing party could successfully challenge its validity in Courts. Disputes can be compounded when arnmain contractor sub-contracts to another who in turn sub-contracts to others making reference to thernterms of the main contract. In this context, this paper is presented with a literature review and Englishrncase law to show the importance of properly constituting an arbitration clause to reduce disputes in thernconstruction industry.