DISPUTE RESOLUTION

WHAT IS DISPUTE
Arguments lead to Disagreements
Disagreements lead to Controversies
Controversies lead to Disputes
between the parties

WHAT IS RESOLUTION

Act of settling the Disputes.

Who Are Parties To The Construction Contracts

Main Construction Contract
Only The Employer and The Contractor are
parties to the Contract
Note
1. The Engineer is not a party to the Contract.
The Engineer is appointed by the Employer to
administer the Contract impartially.
The Employer is liable for the Engineers faults
vicariously.
2. Vicarious Liability
Master is liable for the servants faults.

Who
WhoAre
AreParties
PartiesTo
ToThe
TheConstruction
ConstructionContracts
Contracts
SUBCONTRACT
Only the Contractor and Nominated/Domestic
Subcontractors are parties to the Contract.
SUPPLY CONTRACT
Only the Contractor/ or Employer and Nominated /
Domestic Supplier are parties to the contract.
CONSULTANCY CONTRACT
Only the Employer and the Consultant/the
Engineer are parties to the contract.

FACTORS RELATED TO DISPUTES

Clauses related to the Conditions of Contract
Technical issues
Parties involved
Biased decisions
Project Conditions
Third Party
Organizational Behavior
Cultural Problems
Magnitude

ADVERSARIAL DISPUTE RESOLUTION

In Litigation , arbitration, adjudication ,Dispute

Adjudication Board(DAB), Minitral; the parties are

concern to win their own arguments; by playing
within a established Legal Framework using skill
and ability; in arguing and scoring points over
each other.
Generally, these conducts are not appropriate for
amicable settlement.

NON-ADVERSARIAL DISPUTE RESOLUTION

Settle the dispute cordially and amicably.
Parties may try to settle their dispute even sacrificing

some of their entitlements for the settlement. (Mediation

,Conciliation , etc.)

LITIGATION- (Adversarial)
Ultimate legal method for settling controversies or
disputes between and among persons, organizations,
and the State.
In litigation process, a case (called suit or lawsuit) is
brought before a court of law suitably empowered
(having the jurisdiction) to hear the case, by the parties
involved (the litigants) for resolution (the judgment).

ALTERNATE DISPUTE RESOLUTION (ADR)

ARBITRATION-(Adversarial)

This is one of the Alternate Dispute Resolution

(ADR) method . The determination of a dispute
by one or more independent third parties (the
arbitrators) rather than by a court .
Arbitrators are appointed by the parties in
accordance with the arbitration clauses of the
relevant conditions of contract . The judgment
of an arbitrator is called his award

ARBITRATION (contd)
The following chart explain the way of commencing arbitration as indicated in
the FIDIC red book
Disput
e

Yes

Exists
no

Ask for
E's decision
Cl.67.1

84 days

yes

satisfied

Ask for E's

Determination- Cl.44.5

no

56
days

no

attempt
amicable
settlement

no
Attempted

yes

satisfied

yes
no
no
Finally settle under the
rules of
arbitration
Yes

Resolved

Resolved

Give notice of intention to

commence Arbitration

time ?

Agreeable

yes

decision
70
days

Determines

E gives

If notice of intention to
commence Arbitration
is not given within 70 days
then the Engineer's
Decision becomes final
binding on the parties
and

no

yes

Resolved

ARBITRATION (CONTD)
Clause 2.3
Any communication given by the Engineers representative to the
contractorshall have the same effect as though it had
been given by the Engineer . Provided that:
a) .
b) If the Contractor questions any communication of the Engineer
s Representative he may refer the matter to the Engineer who
shall confirm , reverse or vary the contents of such
communication

ARBITRATION (CONTD)
Clause 67.1
If a dispute of any kind whatsoever arises between the
Employer and the Contractor..including any
dispute as to any opinion , instruction ,determination , certificate
or valuation of the Engineer ,t he matter in dispute shall ,in the
first place be referred in writing to the Engineer with a copy to
the other party . Such reference shall state that it is made
pursuant to this clause. No later than the eighty fourth day
after the day on which he received such reference the Engineer
shall give notice of his decision to the Employer and to the
Contractor. Such decision shall state that it is made
pursuant to this clause.
.

ALTERNATE DISPUTE RESOLUTION(CONTD)

ARBITRATION (Contd)
Clause 67.1 (contd)
If either the Employer or the Contractor be dissatisfied with any decision of the
Engineer ,or if the Engineer fails to give notice of his decision on or before the
eighty fourth day,then either the Employer or the Contractor
may,on or before the seventieth day give notice to the other party
with a copy for information to the Engineer, of his intention to commence
arbitrationno arbitrationmay be commenced unless such
notice is given.
If the Engineer has given notice of his decision ..and no notice of
intention to commence arbitration..has been given..on or
before the seventieth day .the said decision shall become final
and binding upon the Employer and the Contractor.

ARBITRATION (contd.)
Clause 67.2
Where notice of intention to commence arbitration as to a dispute
has been given..the parties shall attempt to settle
such dispute amicably before the commencement of arbitration .
Provided that unless the parties otherwise agree
,arbitration may be commenced on or after the fifty sixth day
.even if no attempt at amicable settlement thereof has
been made
Clause 67.3
Any dispute in respect of which:
a) the decision ,if any of the Engineer has not become final and
binding pursuant to Sub-Clause 67.1,and
b) amicable settlement has not been reached within the period
stated in Sub-Clause 67.2,
Shall be finally settled..under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by one
or more arbitrators appointed under such Rules

PROCEDURE IN ARBITRATION
a)Appoint according to prior arrangement
i) Institutional Arbitration agreement
Use institutional procedures/monitoring
ii) Ad-hoc arbitration agreement Based on the parties agreement
b) Forward issue to Arbitrator
c) Exchange information/evidence
d) Proceed with the hearing according to the suitable method chosen
by the Arbitrator as follows:
(i) Full-Process
* Fairly resemble Litigation model and procedure and used for
major
disputes
(ii)Documents-only
* Reach decision based on documents only. Mainly to interpret the
Contract Clauses

LAW RELATED TO ARBITRATION

Refer
Arbitration Act 1996 (United Kingdom)
Construction Industry Model Arbitration Rules (CIMAR)
Institute of Civil Engineers arbitration procedure 2006
Arbitration Act 1995 (Sri Lanka)
Arbitration Act 2001(Sri Lanka)
FIDIC conditions
JCT conditions
NEC conditions
ICTAD condition
Related Texts and Webs

ADJUDICATION-(Adversarial)
Adjudication is an Alternative Dispute Resolution(ADR)
process within the construction industry has taken off with
many disputes now being resolved using the Adjudication
process as set out in the standard forms of contract, subcontract and consultant agreements. It is intended to be
quicker and more cost effective than litigation or arbitration.
It is normally used to ensure payment (although most types
of dispute
can be adjudicated)
.The Adjudicator must generally decide the dispute in less
than 42 days (Less than 24 days as Local SBDs). Dispute shall
be adjudicated by a recognized Dispute Adjudications Board
(DAB)

Procedure in adjudication
*Notice of reference to for adjudication to the other party in
dispute
*Appointing/invoking the adjudication to prior agreement
*Submission of the written claim
*Giving the defending party a chance to answer the
complaint
Obtaining evidence/submission
*Once heard the parties to the dispute Adjudicator will issue
the decision (after performing site visit If necessary)

DAB (Dispute Adjudication Board)

Is a job site Dispute Adjudication process,
typically comprising three independent and an
impartial persons selected by the contracting
parites.

Procedure in DAB
Similar to Adjudication.

A COMPARISON OF DISPUTE RESOLUTION

BOARDS AND ADJUDICATION
The construction industry has always had a
special need for mechanisms to resolve
construction project disputes promptly. The two
newest and most promising devices for
providing real time dispute resolution on
construction projects are the Dispute
Resolution Board, developed in the United
States, and the adjudication process,
developed in England.

1. Over one hundred years ago the construction

industries in both the United States and the United

Kingdom, because of the need to keep construction
projects moving, and because of the vast potential for
disputes and conflict on projects, developed a two-step
process for resolving disputes at the project site:
whenever a problem arose that the parties could not
immediately resolve they would call on the project
architect or engineer to make an objective ruling on the
issue. If that ruling did not resolve the problem, the
parties could then refer the issue to a relatively informal
ad hoc arbitration process whereby an arbitrator
promptly held a hearing and issued a binding decision.
These two processes were designed to enable the
parties to put problems behind them and move forward
with the project.

2. Although the combination of these traditional job

site dispute resolution methods served the
construction industry reasonably well for several
generations, unfortunately during the past 30
years they have ceased to be as effective as they
once were. The architect/engineer (A/E)
decisions are no longer given the weight that
have traditionally been accorded to them; and
prompt, informal ad hoc arbitrations to resolve
discrete disputes are now practically unheard of.
Instead, arbitrations today tend to be massive
post-project proceedings that involve a host of
disputes that have.

ALTERNATE DISPUTE RESOLUTION (Contd)

MINITRIAL-(Adversarial)
The minitrial is an Alternative Dispute Resolution
(ADR) procedure that is used by businesses and the
federal government to resolve legal issues without
incurring the expense and delay associated with court
litigation. The mini-trial does not result in a formal
adjudication but is a vehicle for the parties to arrive at
a solution through a structured settlement process.

PROCEDURE IN
MINITRIAL
As per the organizational procedures

MEDIATION (Non-adversarial)
This is an Alternate Dispute Resolution (ADR)method in which an
independent third party (mediator) assists the parties involved in a dispute or
negotiation to achieve a mutually acceptable resolution of the points of conflict
.The mediator who may be a lawyer or a specially trained non-lawyer ,has no
decision-making powers and cannot force the parties to accept a settlement.
Mediation is widely used in all sorts of disputes, ranging from divorces to civil
lawsuits to very complex public policy problems to international conflicts. Many
disputes that have not responded to an initial attempt at negotiation can still be
settled through mediation. Mediation is of particular importance in long-running,
deep-rooted conflicts, as this type of conflict is rarely resolved without such
outside assistance. Even if the full range of grievances cannot be resolved,
mediation is often useful for dealing with particular limited aspects of the wider
conflict.

PROCEDURE IN
MEDIATION
There is no hard and fast procedure for this method.
Ad-hoc procedures may adopt after negotiating with the
parties

Conciliation- (Non-adversarial)
Conciliation is an Alternative Dispute Resolution (ADR)
process whereby the parties to a dispute (including future interest
disputes) agree to utilize the services of a conciliator, who then
meets with the parties separately in an attempt to resolve their
differences. He does this by lowering tensions, improving
communications, interpreting issues, providing technical
assistance, exploring potential solutions and bringing about a
negotiated settlement.
Procedure of peaceful settlement of international disputes . The
matter of dispute is referred to a standing or ad-hoc commission
of conciliation ,appointed with the parties agreement. The
eventual report is expected to contain concrete proposal for a
settlement , which , however , the parties are under no legal
obligation to accept.

PROCEDURE IN
CONCILIATION
There is no hard and fast procedure for this
method.
Ad-hoc procedures may adopt after
negotiating with the parties

QUANTITY SURVEYORS ROLE IN ALTERNATIVE DISPUTE

RESOLUTION PROCESS
Quantity Surveyor is the Cost and Contract specialist in Construction Industry.
His expertise and capabilities in Contract Administration , Construction
Cost , Construction Technology , Contract and Construction Law, Conditions
of Contract , Arbitration Acts, Project Management etc. , He is suitable and
entitle
to perform any of the following roles in Alternative Dispute Resolution
processes.
He can be:
a) an Arbitrator or Adjudicator or a member of arbitration tribunal,
b) a member of DAB,
c) a Consiliator or Mediater,
b) an expert witness in a Alternative Dispute Resolution process,
e) representing a party,
f) advice the Arbitrator , Adjudicator, tribunal or board
g) an independent expert to the dispute

ANY QUESTIONS

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