This Section 8 discusses the importance of governing law and dispute resolution considerations and provisions in PPP Contracts. As explained further below, the choice of governing law determines the substantive law that will be applied to determine the rights and obligations of the Parties under the PPP Contract. This includes resolution of disputes arising out of the PPP Contract. However, the choice of governing law does not determine the means by which any dispute will be resolved; for example, whether this is by a court of a particular country, or by arbitration. This must be specified in the dispute resolution clause in the PPP Contract. For example, the Parties might select English law as the governing law of the PPP contract, and international arbitration as the means of dispute resolution. This would mean that any dispute arising out of the PPP Contract would be resolved by an arbitral tribunal applying English law.
This Section 8 first explains the concepts of governing law and dispute resolution provisions and then explains some key considerations for Contracting Authorities, including how Parties might select a dispute resolution provision, and what the key elements of such a provision are. Particular guidance is given on important considerations where arbitration is selected as the dispute resolution mechanism. Finally, some guidance on alternative dispute resolution and the use of independent experts for technical disputes is provided.