Content.
Synopsis
Dispute Resolution—Mediation and Arbitration
Synopsis.
AIA Document B161™–2022 is drafted for a U.S. architect (Consultant) who is hired to perform design services for a foreign-based Client and project where the Client retains a local architect in the foreign jurisdiction to prepare Further Design (Construction) Documents based on the Consultant’s Design Development Documents. B161 is not intended for U.S. architects who are licensed in the foreign jurisdiction or have an office in the foreign jurisdiction. It is anticipated that B161 will be used with private foreign companies, as opposed to foreign governments.
This document is intended to clarify the assumptions, roles, responsibilities, and obligations of the parties; to provide a clear, narrative description of services; and to facilitate, strengthen, and maintain the working and contractual relationships among parties. Unlike other AIA documents, no General Conditions are associated with B161. Also, some terms used commonly in domestic, standard form AIA agreements, such as program and construction documents, do not have the same meaning in B161 (however, their modified definition is provided in B161).
When undertaking design services for a foreign Client and negotiating the contract, it is important to consult an attorney who is licensed to practice in the jurisdiction where the Project is located. An attorney based in the foreign jurisdiction can confirm the legality of design consulting services in the agreement and determine if they conflict with any local laws. Additionally, consultation with insurance and tax advisors who are knowledgeable about, among other things, professional liability insurance requirements and their availability, as well as tax requirements in the foreign jurisdiction, is crucial.
For use and execution of B161, see its instructions »
Dispute Resolution.
Unlike domestic AIA standard form contracts that provide a check box provision for the parties to select among arbitration, litigation, or another method of binding dispute resolution, B161 defaults only to arbitration for binding dispute resolution. The document provides that arbitration shall be administered by the International Centre for Dispute Resolution (ICDR), the international division of the American Arbitration Association (AAA), in accordance with their International Dispute Resolution Procedures (Including Mediation and Arbitration Rules). A provision for mediation precedes the arbitration language. Mediation is a non-binding process.
B161 requires the parties to designate a city for mediation, which will also determine the seat of arbitration. Designating the seat results in application of that location’s procedural law to the arbitration 1) as a supplement to any arbitration rules that the parties select in their agreement and 2) when the selected rules are silent on a particular issue. Under ICDR, regardless of the seat selected, hearings can be held anywhere.
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, more commonly known as the New York Convention, permits enforcement of international arbitral awards in other countries that are parties to the Convention (signatory states), subject to very limited exceptions. The default cities listed in B161 for mediation are part of the countries that are contracting states to the New York Convention.
The AIA does not administer dispute resolution processes. To submit disputes to mediation or arbitration or to obtain copies of the applicable mediation or arbitration rules, contact the ICDR at (888) 855-9575 or visit the website at icdr.org.