Memo Regarding the Activation of the Arab Arbitration Chamber for Engineering and Construction Contracts

Introduction

With the increasing spending in the construction sector in Arab countries, the specificity of construction contracts and general terms of works, and the prolonged duration of dispute resolution in these contracts, the Arab Contractors Union has recognized the importance and necessity of establishing a reference body to expedite the resolution of disputes related to engineering and construction contracts. To achieve this, the Union initiated contact and coordination with the Arab Lawyers Union and the Arab Engineers Union, as these are relevant bodies concerned with contracts, to discuss the establishment of an independent entity focused on arbitration in engineering and construction contracts.

After several meetings, discussions, and studies, and based on the understanding of the three unions about the importance of arbitration as a primary means for dispute resolution—especially when the parties involved are from different nationalities and countries—and their conviction that arbitration should occur under conditions similar to those under which the contract was signed and executed, the three unions agreed in principle to establish an independent Arab Arbitration Chamber specializing in disputes related to engineering and construction contracts.

Historical Development

On April 26, 1992, in Tunisia, the first steps toward establishing the Arab Arbitration Chamber were announced at a meeting that included representatives from the Arab Contractors Union, the Arab Engineers Union, and the Arab Lawyers Union. The basic principles of the Chamber were approved, as well as the number of representatives from each of the founding unions in its general assembly. A temporary executive committee was formed to follow up on the establishment procedures and prepare a draft of the Chamber’s bylaws, which were later approved at the founding general assembly. The executive committee included Engineer Awni Al-Saket, President of the Arab Contractors Union, Professor Suleiman Al-Hadidi, representative of the Arab Lawyers Union, Engineer Sadiq Ben Jumaa, representative of the Arab Engineers Union, and Engineer Awni Al-Masri, Secretary.

On June 27, 1993, the first meeting of the Chamber’s founding assembly was held in Amman, under the patronage of the Jordanian Minister of Justice. During this meeting, the first executive office was elected, and it was decided that Amman would be the Chamber’s headquarters, with the approval of the Jordanian government, recognizing the Chamber as an independent Arab entity. The general principles of the Chamber’s bylaws were also approved.

On December 23, 1993, April 24, 1994, and April 16, 1995, the executive office held several meetings in Amman, during which the internal regulations for the Chamber, the conditions for registering arbitrators and experts, and the arbitration rules were prepared.

On December 2, 1996, an agreement was made to form the Chamber’s general assembly, consisting of three members from each of the founding unions (Contractors, Lawyers, and Engineers), and one member from any national body or union that the general assembly agrees to accept (national bodies interested in engineering contracts but not members of the founding unions). The general assembly would also include representatives from national arbitration associations approved by the general assembly, as well as a number of arbitrators and experts who are members of the Chamber.

On September 12, 1997, a meeting was held in Beirut where the general assembly elected the president and members of the executive office, discussed the work plan of the Chamber, its funding sources, and its fees, and proposed amendments to the bylaws. The elected executive office included Engineer Awni Al-Masri, representative of the Arab Engineers Union, as President, Professor Abdulazim Al-Maghribi, Assistant Secretary-General of the Arab Lawyers Union, as Vice President, and members such as Mr. Abbas Helal, President of the Bahraini Lawyers Association, Fouad Khazen, President of the Lebanese Contractors Syndicate, Dr. Adnan Al-Khatib, representative of the Arab Contractors Union, and Engineer Ghassan Rizwan, Secretary-General of the Arab Engineers Union.

On April 29, 2012, the Jordanian Contractors Syndicate hosted a meeting of the Arab Arbitration Chamber’s general assembly in Amman, attended by Engineer Ahmed Youssef Al-Tarawneh, the Syndicate President, and delegations from participating countries. During the meeting, discussions were held about arbitration procedures, the possibility of opening branches of the arbitration chamber in Arab countries, and reducing the litigation duration. At the end of the meeting, Engineer Awni Al-Saket was nominated as the Executive Director of the Chamber, with Engineer Wael Al-Saqa as Deputy Director.

On December 15, 2015, Engineer Darwish Ahmed Hassanin, First Vice President of the Arab Contractors Union, announced that the Union’s Board of Directors had discussed a memorandum proposing amendments to some articles of the Arab Arbitration Chamber’s bylaws to enable it to play an effective role in resolving various disputes in a timely and just manner.

On February 1, 2016, Professor Fahd Al-Hammadi, President of the Arab Contractors Union, declared in a press statement that the Union decided to suspend its membership in the Arab Arbitration Chamber for Engineering and Construction Contracts. He confirmed that no party or member representing the Union had the right to attend any meetings held by the Arbitration Chamber, and that the Union now represented itself.

On March 15, 2017, Professor Fahd Al-Hammadi, President of the Arab Contractors Union, called for the activation of the Arab Arbitration Chamber’s system to become a reference for Arab businessmen to settle economic disputes. He added that the Chamber would contribute to developing the Arab construction sector.

Objectives of the Chamber

The Chamber works to provide administrative services to arbitrators and dispute parties and aims to raise awareness of arbitration through various means, informing parties about its importance and benefits as a way to resolve disputes in engineering contracts. It also provides technical services such as translation, session minutes writing, scientific and legal references, and appointing experts. The Chamber registers and accredits arbitrators and experts, introduces them, and serves as an appointment authority when one of the dispute parties refers to it for appointing an arbitrator, fixing fees, or other matters. The Chamber does not interfere in the arbitration procedures or the decisions of the arbitrators.

Tasks of the Executive Office

The Executive Office consists of fifteen members elected every three years. It works on adopting a plan to activate the Chamber, raise awareness about it, and strive for it to be recognized as a leading regional arbitration center. Additionally, it invites specialists to include the Chamber’s reference in the general terms of tenders for engineering and construction contracts in Arab countries that require international arbitration.

Agreement Between the Government of the Hashemite Kingdom of Jordan and the Arab Arbitration Chamber

The Jordanian government, in its efforts to strengthen Arab cooperation, approved the Chamber’s permanent headquarters to be in Amman. The government granted exemptions and privileges based on agreements related to the founding regulations of Arab specialized unions. This agreement established the relationship between the Jordanian government and the Chamber, empowering it to begin its activities of resolving disputes in engineering and construction contracts.

The agreement stipulates that the government grants the Chamber exemptions from customs duties for imported materials and office equipment, as well as tax exemptions. The Chamber is granted legal personality, enabling it to own movable and immovable assets, manage arbitration operations, contract with others, and litigate.

Activities of the Chamber

The Chamber’s activities and operations within Jordan include:

• Issuing guidelines for arbitration bodies and mediation procedures.

• Preparing lists of accredited arbitrators.

• Selecting and appointing arbitrators upon request from the dispute parties, as per the arbitration agreement.

• Providing advice and consultation to various parties within its scope.

• Organizing seminars, conferences, and specialized training in arbitration and contracts, in collaboration with relevant bodies.

• Retaining and notifying parties of arbitration decisions.

Benefits and Exemptions

The government applies the privileges and immunities granted under the Agreement on the Privileges and Immunities of the Economic Unity Council to the Chamber, its President, Executive Office members, employees, and representatives of the Arab bodies attending the Chamber’s meetings. The Chamber enjoys exemptions from customs duties on imported materials and office equipment, and tax exemptions for its operations.

Legal Personality

The Chamber has legal personality, allowing it to own property, manage arbitration operations, contract with others, and engage in litigation.

Facilitations

The Jordanian government provides necessary facilities for the Chamber to fulfill its objectives.

This agreement was signed in Amman on Thursday, August 2, 2001, by Engineer Awni Al-Masri, President of the Chamber, and Dr. Fares Al-Nabulsi, Deputy Prime Minister and Minister of Justice of the Jordanian Government.

Important Joint Meeting Between the Arab Economic Unity Council and the Arab Arbitration Chamber

A key meeting took place between Dr. Ahmed Al-Juweili, Secretary-General of the Arab Economic Unity Council, and members of the Arab Arbitration Chamber’s Executive Office on December 15, 2005. The meeting discussed the importance of having an Arab Arbitration Chamber for resolving disputes in engineering and construction contracts. Dr. Al-Juweili emphasized the Chamber’s role in supporting investment and resolving disputes, considering arbitration as the primary solution. The Chamber’s legal framework was discussed as a significant asset to the Arab business community.

Conclusion

Despite the Arab Arbitration Chamber’s eligibility to be the main reference for arbitration in Arab countries, it has not received adequate support and recognition from all relevant professional unions and organizations. Awareness campaigns and media coverage, as well as workshops, are necessary for educating contractors, engineers, and lawyers about the Chamber’s roles and benefits. The Chamber needs backing from its members in their respective countries to ensure its recognition in engineering contracts. There is also a need for a summit meeting between the three founding unions to discuss how to activate the Chamber and resolve any potential conflicts or competition with other arbitration bodies.

A proposal to include the Chamber in the Arab Ministers’ Council meetings and officially recognize it as the primary dispute resolution body for engineering and construction contracts in the Arab world is also crucial for its future success.