Guided Arbitration in Construction Partnership Contracts

In the Iranian legal system, disputes arising from construction partnership contracts are primarily resolved through arbitration, wherein arbitrators operate within narrowly defined legal mandates. This approach confines arbitral authority to a strictly legal function, limiting its effectiveness in addressing the complex, long-term dynamics of such contracts. By contrast, many advanced jurisdictions employ innovative dispute resolution mechanisms that empower arbitrators to play a more proactive role in managing proceedings, preventing conflicts, and ensuring the continuity of contractual relations. Empirical evidence demonstrates the success of these methods in reducing litigation and fostering mutual trust between parties. The central question, therefore, is how such progressive models may be reconciled with the domestic legal framework of Iran. Examination of Islamic jurisprudence and general principles of law reveals that the essential foundations for such adaptation already exist, though their effective implementation requires enhanced arbitral techniques and a departure from purely traditional models. This article, grounded in the philosophy of pragmatism and drawing upon the capacities of Islamic jurisprudence, customary practice, and statutory law, introduces the model of “Guided Arbitration.” This dynamic and hybrid approach integrates negotiation, mediation, and arbitration, while granting arbitrators the authority to adjust and supplement contractual terms. In doing so, Guided Arbitration offers a context-sensitive and legally coherent framework for managing disputes and maintaining contractual equilibrium in Iran’s construction sector.