Baseball Arbitration as a Suitable Alternative for Construction and Real Estate Disputes

Abstract

Baseball Arbitration (or Final Offer Arbitration (FOA)) is a dispute resolution mechanism to resolve controversies where each party submits a final offer. The arbitral tribunal must then decide by picking only one of these proposals. Given the arbitrators’ powers’ limitations, these proceedings are usually shorter and less expensive than traditional dispute resolution mechanisms. In addition, contrary to conventional arbitration, parties tend not to assume unrealistic or extreme positions, which could promote amicable settlement since it is an all-or-nothing proceeding. FOA could effectively resolve monetary disputes in industries where parties seek to preserve the commercial relationship while avoiding unnecessary delays. Therefore, Baseball Arbitration could be advantageous in the construction and real estate sectors. However, most arbitral institutions do not have specific rules for conducting Baseball Arbitration proceedings. This article proposes a model clause for parties wishing to submit their disputes to FOA. In our proposal, the arbitrator will receive the parties’ final offers and then issue its reasoned award, asserting the rationale to choose one offer over the other. Arbitration, Baseball Arbitration, Final Offer Arbitration, ADR Mechanisms, Construction Disputes, Construction Arbitration, Real State Disputes, Real Estate Arbitration, Model Clauses