Critical Determinants of the Decision to Arbitrate Construction Disputes: An Empirical Study

Abstract Construction disputes are frequent due to the complexity, high stakes, and diversity of stakeholders involved in projects, making arbitration a widely adopted resolution mechanism. However, the decision to arbitrate is influenced by multiple interrelated factors that remain insufficiently examined as a whole. This study empirically examines the critical factors influencing the decision to arbitrate construction disputes through a mixed-methods design integrating a questionnaire survey of 49 legal and engineering professionals with thematic analysis. The factors were ranked using the frequency-adjusted importance index (FAII) and validated through Kruskal–Wallis testing to assess group-based differences. The results reveal that confidentiality and privacy of proceedings ( <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" alttext="upper F upper A upper I upper I equals 0.96" display="inline" overflow="scroll"> <mml:mi>FAII</mml:mi> <mml:mo>=</mml:mo> <mml:mn>0.96</mml:mn> </mml:math> ), carefulness and quality of documentation ( <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" alttext="upper F upper A upper I upper I equals 0.94" display="inline" overflow="scroll"> <mml:mi>FAII</mml:mi> <mml:mo>=</mml:mo> <mml:mn>0.94</mml:mn> </mml:math> ), and tribunal competence ( <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" alttext="upper F upper A upper I upper I almost equals 0.74" display="inline" overflow="scroll"> <mml:mi>FAII</mml:mi> <mml:mo>≈</mml:mo> <mml:mn>0.74</mml:mn> </mml:math> ) are the most influential determinants shaping the decision to arbitrate. In contrast, cost-related factors ( <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML" alttext="upper F upper A upper I upper I less than or equals 0.20" display="inline" overflow="scroll"> <mml:mi>FAII</mml:mi> <mml:mo>≤</mml:mo> <mml:mn>0.20</mml:mn> </mml:math> ) were rated the lowest, indicating persistent concerns about proportionality and affordability. The analysis also shows that lawyers emphasize procedural precision and cost control, whereas engineers prioritize technical competence and time efficiency. The results indicate that confidentiality, quality of documentation, and tribunal competence are the most influential determinants, while cost-related considerations significantly reduce the attractiveness of arbitration for low-value disputes. This study provides evidence-based guidance for practitioners, policymakers, and arbitral institutions in designing arbitration mechanisms that enhance efficiency, fairness, and stakeholder confidence in the construction sector.