SPEDR In Non‐Statutory Adjudication Systems: Reshaping Efficiency and Enforceability of Construction Dispute Resolution

Abstract

The construction industry is often fraught with disputes that lead to costly and time‐consuming litigation or arbitration, which further causes exorbitant delays and hampers justice. This necessitates the need for quick and robust dispute settlement. Thus, adjudication as a conflict resolution mechanism has gained prominence in the construction sector for its ability to provide fast and interim binding decisions. However, many countries, such as India and those in the Middle East, still lack a statutory adjudication framework to address the hurdles to achieving swift and enforceable resolutions, resulting in an indefinite, aggravated issue. Therefore, it is required to adopt a process that manages and resolves conflicts with the least escalation risks. Against this backdrop, the paper critically examines whether the UNCITRAL SPEDR Adjudication Clause can effectively resolve the persisting challenges in the non‐statutory adjudication systems. The UNCITRAL SPEDR Clauses 2024 were developed and adopted by the United Nations Commission on International Trade Law at its 57th session in New York to enhance efficiency, customize solutions and emerge as a tool to address the prevalent loopholes in construction dispute resolution. Grounded in Transaction Cost Theory and Procedural Justice Theory, the study assesses the potential of the SPEDR Adjudication Clause to reduce dispute settlement costs and enhance procedural fairness, thereby strengthening enforceability among the parties. The paper further analyses the applicability, legal recognition and practical benefits of the UNCITRAL recommended SPEDR Adjudication Clause in construction contracts of both domestic and international contexts within India and the Middle East. The effectiveness of the clause is also examined with empirical data drawn from construction professionals in India and the Middle East through a cross‐sectional survey with comparative reference to other adjudication mechanisms. 95% of the survey respondents supported the SPEDR Clause adoption, citing enforceability and procedural efficacy as primary advantages. The comparative study with other existing adjudication mechanisms reflected that the SPEDR Adjudication Clause, combining sector‐specific adjudication with compliance arbitration, can address the existing limitations by providing quick and expert‐driven enforceable arbitral awards. Subsequently, the study suggests considering the integration of the SPEDR Adjudication Clause in construction contract standards and arbitral institutions' processes to optimize the dispute resolution process, thereby redressing the amplification of conflict and strengthening the compliance dynamics in the construction domain.