Houston Construction Arbitration Attorneys

Experienced Construction Arbitration Lawyers Representing Contractors, Subcontractors, & Property Owners Throughout Texas

If your construction contract includes an arbitration agreement – and most do – then any disputes that arise from that contract must be resolved through arbitration, not civil court. Under the Texas Arbitration Act, written arbitration agreements are valid and enforceable, and Texas courts will compel arbitration when a valid agreement exists and a party refuses to honor it.

While arbitration can be a more efficient alternative to litigation, the stakes are high. The arbitrator's decision is binding and final. Your options to appeal are extremely limited – courts will overturn an award only in very narrow circumstances, such as proven fraud, arbitrator misconduct, or an arbitrator ruling on issues outside the scope of the agreement. There are no do-overs.

At Hendershot Cowart P.C., our construction law attorneys have handled disputes involving delays, defective work, unpaid contracts, and more for contractors, subcontractors, property owners, developers, and municipal utility districts across Texas. Because we are both trial lawyers and arbitration attorneys, we know how to build a case that holds up – no matter the forum.

Our Houston-based construction arbitration attorneys represent clients throughout Texas, including Dallas, San Antonio, Austin, and Fort Worth. Call (713) 783-3110 or contact us online to discuss your case.

On This Page:

• Benefits of Construction Arbitration
• What’s at Stake in Construction Arbitration
• Construction Arbitration Process in Texas
• Reviewing & Drafting Arbitration Agreements
• Why Experienced Arbitration Counsel Matters
• Construction Arbitration FAQs

Benefits of Arbitration in Construction Law

Construction arbitration offers several advantages over traditional litigation for contractors, subcontractors, and property owners in Texas. 

What's said in arbitration stays out of the public record, protecting your business relationships and reputation. And because arbitrators are often construction professionals themselves – or retired judges with commercial experience – they understand the technical realities of your dispute in a way a district court judge may not.

Other advantages of arbitration to resolve construction disputes:

• Speed: The arbitration process – especially Fast Track procedures – often resolve disputes faster than the civil court docket allows.
• Finality: Binding arbitration decisions eliminate prolonged appeals, giving both sides certainty.
• Expertise: Arbitrators with construction industry backgrounds apply informed judgment to technical disputes involving project specifications, schedules, and cost overruns

What's at Stake in Construction Arbitration

Arbitration can resolve your construction dispute faster and more privately than going to court – but the stakes are high and deserve a clear-eyed understanding before you proceed.

You may not get a second chance. Arbitration awards are almost always final. If the decision doesn't go your way, your options to appeal are extremely limited – even if you believe the arbitrator got it wrong. This makes how you prepare and who represents you critically important. There are no do-overs.

The costs can add up quickly. Arbitration is designed to be more efficient than litigation, but on complex construction projects, that advantage can disappear. Arbitrators charge by the hour, and institutional filing fees aren't cheap. Before assuming arbitration is the less expensive path, make sure you've budgeted for the full picture.

Limited discovery cuts both ways. The streamlined process moves things along, but it can also limit your ability to obtain documents or gather evidence. If your case depends on proving what the other side knew – or when they knew it – those constraints matter.

The bottom line: arbitration puts a lot on the line in a process with fewer safeguards than traditional litigation. Going in prepared – and with the right legal team – isn't optional.

The Construction Arbitration Process in Texas

Unlike litigation, arbitration moves quickly and offers few opportunities to correct mistakes after the fact, which is why knowing each stage and having skilled legal counsel at every step is essential.

1. Reviewing the Arbitration Clause

Before any action is taken, your arbitration clause must be carefully reviewed to determine:

• Which arbitration rules govern the dispute (most commercial construction contracts – including standard AIA contracts – incorporate the American Arbitration Association's Construction Industry Arbitration Rules)
• The number of arbitrators required
• The seat of arbitration (location)
• Whether step clauses require mediation or executive-level negotiation before arbitration can be initiated
• Any limitations on claims, damages, or timelines

If a party refuses to arbitrate despite a valid agreement, Texas law is clear: Courts will order the parties to arbitrate upon application showing a valid agreement exists and the opposing party has refused. If a lawsuit is filed in state or federal court instead, your attorney can move to compel arbitration and stay the court proceedings. 

2. Filing a Demand for Arbitration

The construction arbitration process officially begins when the claimant files a Demand for Arbitration with the AAA or other designated arbitration body, such as JAMS. The demand must include:

• A description of the dispute and the nature of the claim
• The amount of the claim or remedy sought
• A copy of the relevant contract and arbitration clause
• The filing fee (set by the institution, scaled to the size of the claim)

The responding party then has an opportunity to file an answering statement and any counterclaims. How the demand is framed – what claims are asserted and how damages are described – has lasting consequences. Because the arbitrator's authority is generally limited to matters properly submitted, precision at this stage is critical.

3. Mediation

Many construction arbitration clauses include step clauses that require the parties to attempt mediation or executive-level negotiation before filing for arbitration. Complying with these preconditions is not optional – failure to follow contractually agreed-upon alternative dispute resolution steps can waive rights or affect the enforceability of a claim. 

Even where mediation is not contractually required, it is often worth pursuing first. It is faster, less costly, and keeps both parties in control of the outcome, which matters when you have an ongoing business relationship to protect. If mediation fails, the formal arbitration process continues.

4. Selecting an Arbitrator

One of the defining advantages of construction arbitration is the ability to select a decision-maker with direct construction industry knowledge – unlike civil court, where a judge or jury may have little familiarity with construction contracts, building codes, or industry standards. The AAA facilitates the selection process by providing lists of qualified candidates. Parties may strike candidates they find unsuitable and rank their preferences.

For large or complex disputes, a panel of three neutral arbitrators is typically used. 

Selecting the right arbitrator – someone with relevant expertise and a track record of fair, informed decisions – is one of the most consequential choices in the entire process.

5. Pre-Hearing Discovery and Preparation

While arbitration generally limits formal discovery compared to civil litigation, parties are still entitled to exchange relevant documents and information before the hearing. The AAA Construction Industry Rules give arbitrators broad authority to order discovery proportionate to the dispute – including depositions, interrogatories, and document production.

Pre-hearing preparation typically includes:

• Document exchange and review (contracts, change orders, project records, correspondence)
• Witness identification and preparation
• Retention of expert witnesses (engineers, estimators, scheduling experts)
• Submission of pre-hearing briefs to frame the legal and factual issues for the arbitrator

Because construction disputes often hinge on technical details – project specifications, deviation from plans, delay causation, cost overruns – thorough and organized preparation is essential. Our attorneys devote significant resources to building compelling cases before a single hearing begins.

6. The Arbitration Hearing

The arbitration hearing functions similarly to a trial, but in a private, more streamlined setting. Each side presents its case through evidence, witness testimony, and legal arguments. The arbitrator – or panel – has broad discretion to manage the proceedings and may consider post-hearing evidence when the arbitration agreement incorporates rules granting such authority, provided the opposing party receives an opportunity to respond.

Hearings may span a single day for straightforward disputes or extend over multiple sessions for complex, high-value construction claims. Unlike litigation, there is no jury; the arbitrator serves as both judge and fact-finder. This underscores why presenting a clear, well-organized, and persuasive case is paramount.

7. The Award

Following the hearing, the arbitrator issues a written award – typically within 30 days under standard AAA rules. The award – which can include financial damages and other remedies – is binding and final.

Under Texas law, a court can vacate an award only in very narrow circumstances – for example, if the award was obtained through fraud or bribery, the arbitrator had an undisclosed conflict of interest, the arbitrator ruled on issues outside the scope of the original agreement, or critical evidence was improperly excluded. These are generally your only avenues for appeal.

If the prevailing party is not paid, the award can be converted into a court judgment and enforced through standard legal collection mechanisms.

Reviewing & Drafting Arbitration Agreements in Construction Contracts

Our construction law attorneys help clients evaluate, draft, and negotiate arbitration provisions in construction contracts before any dispute is on the horizon. We evaluate the nature of the contract, the size and complexity of the project, the parties involved, and the risks specific to your situation. 

When drafting or reviewing the arbitration provision of a construction contract, we consider these key variables:

• Scope. We ensure the clause uses clear, mandatory language that defines which disputes are covered and makes the obligation to arbitrate binding and enforceable.
• Selection of arbitration rules. Many construction contracts incorporate the American Arbitration Association's Construction Industry Arbitration Rules. These rules govern the arbitrator selection process, discovery procedures, and hearing conduct unless parties specify alternative procedures. 
• Arbitrator qualifications. We can specify qualifications – such as a minimum number of years of experience in construction law or engineering – and whether a single arbitrator or a three-person panel is appropriate given the complexity and value of the dispute.
• Multi-party coordination. Construction disputes often involve owners, general contractors, subcontractors, and design professionals. We include provisions for consolidating related claims and joining necessary parties to avoid inconsistent outcomes across separate proceedings.
• Choice of law and forum selection. We specify which state’s laws apply and where the arbitration will take place.
• Step clauses. Where appropriate, we build in a requirement that parties attempt mediation or executive-level negotiation before filing for arbitration, which can save significant time and cost.

Getting the language right from the start can determine how a future dispute plays out. We work with contractors, subcontractors, property owners, and developers at the contract stage to reduce risk and avoid costly surprises down the road.

The Finality Factor: Why the Arbitration Process Demands Experienced Counsel

The speed and finality that make construction arbitration attractive are the same qualities that raise the stakes at every stage. A poorly drafted demand, a misjudged arbitrator selection, or an underprepared hearing can result in a binding outcome that cannot be undone.

At Hendershot Cowart P.C., our construction arbitration attorneys bring the same rigor and preparation to the arbitration room that we do to the courtroom. Whether your dispute involves a breach of contract, construction defects, payment disputes, delay claims, or trade secrets, we develop a strategic approach tailored to your specific circumstances and the construction arbitration process – from initial contract review through final award.

To discuss your construction dispute with an experienced Texas arbitration attorney, call (713) 783-3110 or contact us online today.

Frequently Asked Questions about Construction Arbitration

Are arbitration decisions binding? 

Yes. In the vast majority of cases, an arbitration award is legally binding and final. When you agree to arbitration, you are giving up your right to a jury trial and, in most cases, your ability to appeal the outcome in court.

A court can only overturn an arbitration award in rare circumstances – for example, if the award was obtained through fraud or bribery, the arbitrator had an undisclosed conflict of interest, the arbitrator ruled on issues outside the scope of the original agreement, or critical evidence was improperly excluded.

How does the arbitrator decide the case?

An arbitrator decides the case much like a judge would, but without a jury and with somewhat more flexibility in procedure. The arbitrator reviews the evidence, listens to arguments and testimony, and applies the relevant law and contractual terms. 

After a period of deliberation, the arbitrator then issues a written decision, called an award, which states the outcome and assigns any financial damages or other remedial actions. Once issued, the award is binding and can be enforced in a court of law as a judgment.

What is the difference between JAMS and AAA?

Both JAMS and AAA (American Arbitration Association) are private arbitration institutions that administer dispute resolution proceedings, including construction arbitration. They are not the arbitrators themselves – they manage the process, maintain rosters of arbitrators, and provide procedural rules that govern how a case is handled.

AAA is the larger and older of the two, and it has a dedicated set of Construction Industry Arbitration Rules that are widely used and well-recognized in the industry. Many standard construction contracts – including AIA contracts – default to AAA. It tends to be the more common choice for construction disputes of all sizes.

JAMS has a reputation for handling larger, more complex commercial disputes. Its arbitrators are typically retired judges or highly experienced attorneys. JAMS tends to be more expensive than AAA, which makes it a more common choice for high-value disputes where parties want an arbitrator with extensive judicial experience.

In practice, the key differences come down to cost, arbitrator rosters, and the specific procedural rules each institution uses. Which institution governs your dispute is typically determined by what your contract specifies – another reason why the language in your arbitration clause matters before a dispute ever arises.

Is it better to settle or go to arbitration?

When a construction dispute arises, mediation is generally worth pursuing first. It is faster, less costly, and keeps both parties in control of the outcome – which matters when you have an ongoing business relationship to protect. A skilled mediator can help both sides reach a workable resolution without the expense or uncertainty of a formal proceeding.

If mediation fails, you and your attorney can resume the arbitration process to arrive at a final resolution.