Beijing Arbitration Commission

    The launch ceremony for the “TravelSky Beijing Shunyi Hi-tech Industrial Park Project Construction Dispute Review System” was successfully held at the BAC international conference room on November 27, 2013. Officials from National Development and Reform Commission (NDRC), State-Owned Assets Supervision and Administration Commission (SASAC), China TravelSky Technology Limited, China State Construction Engineering Corporation (China Construction), China Construction Eighth Engineering Division Corp., Ltd. and BAC, along with dispute review experts from the program’s standing review board and reporters from news and media outlets, participated in the ceremony. Officials from NDRC, SASAC, China Construction, TravelSky and BAC addressed the ceremony and affirmed the positive role of dispute review system in improving corporate risk control and facilitating the implementation of construction projects. NDRC and SASAC officials further commented this joint launch of the dispute review system by TravelSky, China Construction and BAC was an innovative exploration using the ideas and methods of the rule of law to provide solutions to the risks and problems faced by companies and was of great significance to the exploration of legal risk control system for major, complicated and difficult projects. Then TravelSky and China Construction officially signed the Review Expert Agreement with three dispute review experts from the program’s review board and signed the Cooperation Agreement with BAC, marking the official establishment and operation of the program’s standing review board as well as the official launch of the construction dispute review system.

Signing of the Review Expert Agreement

Signing of the Cooperation Agreement

    Construction dispute review is a method of dispute resolution where independent review experts chosen by the parties make timely suggestions or decisions to settle disputes between the parties arising from or in connection with construction projects. With its mechanism of “detailed segmentation”, this method allows real-time dispute resolution, timely settlement of small disputes and prevention of dispute escalation, thus averting the delay, losses and costs resulted from disputes and ensuring the smooth progress of projects. Originated from the West, this method has applied to large-scale international engineering projects including World Bank loan projects such as Xiaolangdi Hydropower Station and Ertan Hydropower Station construction projects. Compared with traditional methods of dispute resolution such as litigation, arbitration and mediation, construction project dispute review has advantages in terms of real-timeness, professionalism, speediness, flexibility and economy. By early settlement or containment of disputes, the method has helped the successful settlement of many disputes in large-scale projects. Construction project dispute review provides a new opportunity to cut down on the dispute resolution costs for projects and improve project management. In 2007, the Standard Construction Contract (Demonstration Text) was issued by nine state departments, marking the first introduction of dispute review in domestic contracts and the state-level promotion of the localization of dispute review system. In early 2008, BAC drafted the BAC Construction Dispute Review Rules (Exposure Draft). On March 1, 2009, the BAC Construction Dispute Review Rules was officially put into implementation and in order to ensure its implementation, BAC also developed the codes of practice for review experts, the list of review experts, review expert agreements and relevant documents and organized review expert training. Thanks to the efforts from all sides, dispute review system is gradually known, understood and accepted by parties to construction disputes.

    As a key construction project for a large state-owned enterprise, the TravelSky Beijing Shunyi Hi-Tech Industrial Park Project is of crucial importance to the safety, efficiency and cost of the operation of the nation’s key information system and features large-scale investment and construction, extended construction period, high quality and supervision requirements. Enterprising in its explorations and steadily-paced in its implementation, TravelSky began the first to introduce the standing dispute review system in the management of domestic funded construction projects by optimizing the advanced common international practice based on domestic conditions and then winning the collaboration of its project partner China Construction Eighth Engineering Division Corp., Ltd. through negotiations and the support of BAC’s existing dispute review platform. This dispute review program is the first of its kind in China launched by market-oriented means for an entirely domestic funded and national key project. Its official launch is a milestone in the development of construction dispute review system in China, marking the leap of domestic dispute review from theory to rules and then to practice and putting an end to the foreign monopoly of dispute review practices. This program not only adopts the BAC Construction Dispute Review Rules, but also innovates and optimizes the review system, by means of integrating advanced foreign experience with the requirements of legal risk management for project owners and the characteristics of project management, to develop dispute review into an effective tool for legal risk management. Providing the institutional context for the review system and acting as the system’s coordinator and operational center, BAC plays a crucial role in maximizing the effect of the dispute review system. The undertaking of the program not only has Chinese characteristics but also is universally applicable. It greatly increases the function and effect of dispute review, significantly reduces risks and saves social resources, and its explorations and practices will benefit the expanded application of the dispute review system in domestic construction and have profound impact on promoting the healthy development of the Chinese construction industry.