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Zach Torres-Fowler

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Zach concentrates his practice in construction-related disputes and specializes in complex domestic and international arbitration proceedings. He has advised clients on nearly every continent in connection with projects in the United States, Africa, the Middle East, and Latin America. Zach has represented owners, EPC contractors, and equipment manufacturers in disputes arising from a wide variety of construction projects including power plants, airports, commercial buildings, and other civil infrastructure works.

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This article was published in Mealey’s International Arbitration Report – March 2021. Copyright 2021, LexisNexis. All rights reserved. It is reprinted here with permission.

On February 15, 2021, the International Bar Association (IBA) released the long-awaited 2020 update to its highly influential Rules on the Taking of Evidence in International Arbitration (“IBA Rules”). Known for their flexibility and practical blend of common law and civil law traditions, the IBA Rules have come to reflect the most common practices in international arbitration proceedings over the past two decades. The 2020 update is important because, prior to the 2020 update, the IBA Rules had only been revised once, in 2010, after first being formalized in 1999. As a result, given the prevalence of the IBA Rules, the 2020 update is likely to remain the benchmark standard for international arbitration practice for the next decade.

Published in Law360 on February 25, 2021. Reprinted here with permission.

On Feb. 15, the International Bar Association released the long-awaited update, adopted by the IBA Council on Dec. 17, 2020, to the IBA Rules on the Taking of Evidence in International Arbitration.[1]

First formalized in 1999, the IBA rules have become the most widely accepted set of guidelines for international arbitration proceedings. Known for their flexibility, practicality, and blend of common law and civil law practices, the IBA rules are commonly used to fill in the procedural gaps left by arbitral rules and represent basic norms that parties have come to expect from international arbitration.

As published in Dispute Resolution Magazine, Volume 26, Issue 3, September 2020.

Imagine a complicated engineering and construction project that has lasted years and has already cost hundreds of millions of dollars. During the project, the contractor submitted dozens of claims for additional time and money – all of which the project’s owner has rejected. Amid mounting costs, claims from various subcontractors and suppliers boiling to the surface, and the threat of liquidated damages or even termination of the project, the contractor proceeds without receiving any relief from the owner. Although the parties have tried to resolve their disputes through negotiation and even mediation, they have not been able to reach an acceptable settlement. The contractor says it has incurred significant costs to perform the work and feels it is essentially funding the owner’s changes to the project. The owner, however, says the disputed issues are the contractor’s, not the owner’s risk. Accordingly, without a dispute resolution mechanism in place to resolve these disputes in real time, the costs continue to mount, and the prospect of a lengthy, expensive, and protracted arbitration or litigation looms.

On September 14, the U.S. Court of Appeals for the Third Circuit addressed the perennially thorny issue of whether the courts or arbitrators retain the authority to resolve questions involving the enforceability of arbitration agreements. In MZM Construction Company, Inc. v. New Jersey Building Laborers Statewide Benefits Funds,[1] the Third Circuit held that the courts must decide questions of arbitrability in cases where a party challenges the validity of the underlying contract that contains the arbitration agreement — even when the putative arbitration agreement refers these questions to the arbitrators. The court’s decision highlights the complexities associated with the enforcement of arbitration clauses and the limits to a party’s ability to compel arbitration.

Published in Dispute Resolution Journal (June 2020, Vol. 74, No. 3), the flagship publication of the American Arbitration Association. © 2020, American Arbitration Association. It is reprinted here with permission.

EXCERPT:

“There is a deceptive simplicity about the way in which arbitral proceedings are conducted… In fact, the appearance conceals the reality.”

Introduction

Arbitration is simple. Parties select a person or persons — the arbitrator(s) — whose expertise or judgment they trust to resolve their differences in a privatized forum. After each party puts on their case, the arbitrator(s) consider the arguments and evidence and renders a binding decision.

The U.S. Supreme Court issued a unanimous decision on June 1 in GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, holding that, in some circumstances, even nonsignatories to an agreement may invoke international arbitration. The Court ruled that the U.N. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) did not prohibit the application of the U.S. doctrine of equitable estoppel to permit the enforcement of arbitration agreements by nonsignatories. In doing so, the Court clarified that the doctrine of equitable estoppel recognized under Chapter 1 of the Federal Arbitration Act (FAA) for U.S. domestic arbitrations could also be applied to international arbitration proceedings governed by Chapter 2 of the FAA.

For parties who regularly engage in multi-tiered international commercial arrangements like the kind seen in GE Energy, the ruling expands the reach of international arbitration agreements and gives those parties greater clarity into their own ability to utilize international arbitration to resolve complex disputes.

Days after the World Health Organization declared the COVID-19 outbreak a global pandemic, governments from around the world scrambled to enact measures aimed at mitigating the spread of the virus. In the United States, cities and states have enacted travel restrictions, issued shelter-in-place orders, and directed nonessential businesses to shutter. While all aimed at mitigating the spread of the virus, these measures will have an immense disruptive impact on businesses and industries around the world — the construction sector included.

As notices concerning force majeure, changes in law, and change orders swirl, parties should prepare themselves for how these disputes will be managed and resolved. The COVID-19 outbreak will rapidly reshape how the construction sector does business. This article offers our insight into just once facet of the construction industry: alternative dispute resolution and how the COVID-19 outbreak has and will affect construction disputes going forward.