Unpacking Recent Trends in Major Projects and Infrastructure Arbitration

Amid the evolving complexities of infrastructure projects, stakeholders are increasingly seeking innovative solutions to mitigate risk and manage disputes more efficiently. 

Below, we discuss recent trends shaping major projects and infrastructure arbitration in Canada and highlight key considerations and emerging strategies for proactive engagement.

1. Arbitration Precedents. In three recent cases, Orica Canada Inc. v. Arvos GmbH, IBI Group Architects v. City of Edmonton, and Husky Oil Operations Limited v. Technip Stone Webster Process Technology Inc. (Husky Oil), Canadian courts affirmed the importance of arbitration, even if there are parallel litigation proceedings, and stayed court actions that should have been commenced as an arbitration. These cases underscore the importance of thoughtful forum selection and the potential inclusion of multi-party arbitrations in dispute resolution provisions.
2. Third-Party Beneficiaries. In Husky Oil, the Court of King’s Bench of Alberta determined that third-party beneficiaries will be subject to an arbitration clause if they choose to enforce their rights under the underlying arbitration agreement. This ruling signals that third parties cannot benefit from arbitration agreements while side-stepping the associated burdens. 
3. Collaborative Contracting. Collaborative contract models have arrived in Canada, bringing new contractual terms that tend to share risks among all the parties and dispute resolution mechanisms that may significantly limit or even exclude recourse to traditional arbitration or litigation. This signals the emergence of a new frontier for managing disputes about large infrastructure projects. 
4. Dispute Resolution Provisions. When drafting dispute resolution provisions (DRPs), it’s important to consider: the interrelation between the steps of an escalation process and limitation periods; providing for a specific process to reduce the difficulties associated with appointing arbitrators, experts, and mediators; providing for the confidentiality of all the steps of a DRP; and contemplating the role of third parties or non-signatories in arbitration. 
5. Proactive Strategies. Much like infrastructure projects, infrastructure arbitrations require significant investment to be successful. Many steps can be taken during the project stage to benefit future infrastructure arbitration. Those include diligent recordkeeping, consistent training for personnel, and proactive coordination with in-house or external counsel to determine legal strategy.

Have more than five minutes? Watch our recent webinar on this topic or contact any member of our Arbitration group to learn more.