The author whose copyright is declared on the title page of the work has granted the British University in Dubai the right to lend his/her research work to users of its library and to make partial or single copies for educational and research use. The author has also granted permission to the University to keep or make a digital copy for similar use and for the purpose of digitally preserving the work.
- Introduction
- Research Background
- Statement of the problem and research question
- Aim and objectives of the research
- Significance of the research
- Research methodology
- Structure of the research
There are several dispute resolution methods used in the construction industry, including mediation, arbitration and award. The fifth and final chapter will contain a summary of the dispute in the construction industry and the mechanism available to resolve them.
History of Dispute Resolution (DR)
According to common law, it is risky to pursue a premature claim because it prevents the party from submitting new documents for defects discovered later in the same project32. However, it is also believed that litigation is unsuitable for construction projects because it does not preserve the relationship between the parties, and there may be future work that depends on the relationship between the parties involved.34 In addition, there is no time limit for a case. must be resolved by court proceedings: some cases can be concluded within a year, while others can take seven35.
Types of DR
- Negotiation and Senior management level discussions
- Conciliation
- Mediation
- Expert determination
- Dispute boards
- Adjudication
- Arbitration
- Mini Trial
- Early Neutral Evaluation
- Arb-Med- Arb
- Litigation
If no time frame is specified in the DR clauses, the efficiency of the process is also reduced. However, at the request of the parties, they will make a proposal for a non-binding settlement agreement. Moreover, the choice of the mediator is entirely dependent on the free will of the parties involved.
In addition, the parties can choose the time, location, language and structure of the proceedings, ensuring the autonomy of the parties. The success of this process depends on the willingness of the parties involved to cooperate fully with the mediator. It is said that no agreement is reached on using the same neutral party for both mediation and arbitration in the same dispute.
Summary
Its informal nature makes it an easy method in simple disputes even in the construction industry. In addition, the parties may choose to seek help from an expert in the construction sector when the basis of the dispute is more technical than legislative reasons to assist in resolving the dispute and rectifying it. In neutral assessment, the neutral provides each party with an assessment of their current status in the dispute if they wish to proceed to arbitration.
In a hybrid arb-between-arb, a dispute may be referred to mediation for resolution after arbitration. The customer may end up paying enough costs if the amount they can get becomes insignificant. In the end, it comes down to the two most important variables, namely cost and time, which play a large role in choosing a DR method.
DAB: What they are, where they come from, and what they do
History of Dispute Boards
DBs are formed at the beginning of a project's contract by mutual agreement between the disputing parties. The Consortium shall be impartial to resolve any disagreements arising at any stage of the project. Therefore, DB's decisions are dependent on the law in the contract80, which is either the law of the country where the project was built, or of a country that both parties agree on.
These members hired to resolve disagreements that arise at every stage of the project are impartial. Combined Dispute Committees make decisions based on the request and mutual consent of the parties. The parties may request DAB to provide informal assistance to resolve any disagreement that may arise during the performance of the contract.
What is a Dispute Board
They also hold hearings when necessary to allow all parties to be heard before making any binding decisions or recommendations that may be submitted to arbitration later. When a party refers a dispute to the DB, the board holds hearings, requests the production of documents, questions witnesses and makes a decision within a certain period of time. The enforcement of the decision however depends on the contractual obligation of the board, whether it is DAB or DRB.
Although it results in non-binding decisions, the DRB is recommended by the Dispute Resolution Board Foundation85. There is a period until which a party can challenge the decision after it has been officially issued. However, even if a party objects within this period, neither arbitration nor litigation can begin until the project is completed86.
Types of DAB
Characteristics of DB process
Moreover, no formal pleas are required and the written documentation is considered less compared to court proceedings. This informal characteristic is more attractive to the demographic that is afraid of litigation or simply unable to participate in such formal systems. Because this system operates without formal representation and takes place in a less formal set-up, the costs of attorneys and/or arbitrators and the costs of such proceedings are reduced, reducing delays and lowering the cost of litigation.
As non-judicial instruments, they play a role in the application of equity instead of the rule of law. A third party is hired to give a recommendation or a decision on the dispute based on concepts and terms that promote fairness in that case and not based on conventional applied legal usages/standards. If this method's system fails, parties can appeal to the court and arbitration decision if the recommendation or decision was unsatisfactory, which in turn can monitor the result of this method to ensure fairness and equity or reverse it.
DAB under FIDIC standard form contracts
Unlike court hearings which are public, there is a higher level of confidentiality in DBs as they maintain a higher level of privacy in all proceedings.
Appointment of DAB
Cases may be referred to the board jointly by mutual agreement of the parties. No member is allowed to refer a dispute to the DAB without the consent of the other party94. If the parties fail to agree on the appointment of a one-member panel by the date agreed in the contract tender addendum.
If one of the parties fails to nominate a member of a three-member board for the approval of the other party before the date agreed in the tender annex of the contract. If both parties cannot agree on the appointment of the chairman of the DAB before the date agreed in the annex to the tender. When one of them applies, the appointing entity specified in the contract must make the appointment after obtaining the agreement of the parties, and it must be final and conclusive98.
Duties and Obligations and Operations of the board
53. assigned without the consent of all parties involved and any remaining committee. d) Decision of the DAB. Members of the DAB must adhere to the deadline agreed in the contract for issuing a decision. This period can be changed with the consent of the parties. e) Procedures related to decisions.
A dispute reference must be in written form, as seen in subclause 20.4 of the 1999 FIDIC Red Book. The decision must be issued within 84 days of the appointment of the DAB, but this period can be extended by amending the contract and depends on the approval of the parties. Disputes will be referred directly to arbitration following the expiry of the DAB appointment and completion of the contract.
DAB decision , it’s enforceability, and the failure to comply
- Costs of hiring DAB
- Time spent on DAB
- Advantages and disadvantages
Since they are employed equally by both parties, the board's remuneration should be shared between them. According to subsection (d) of paragraph (6) of the FIDIC Red Book Supplement discussing payments, “any tax properly charged in the country on payments made to the member (unless a national or permanent resident of the country) under to this section 6". First, there is a period of 84 days or more allotted by the parties jointly for the board to make a decision, from the date of the submission of the dispute to the board.
Being present at all stages of the construction of the project in dispute, DBs differ from other non-judicial DR methods. These include shorter hearings116, shorter preparation time and the non-threatening nature of the procedure. Clients may want to borrow from banks, and the costs are the same regardless of the size of the project.
Arbitration: Definition, Process, and Features
- Arbitration between the past and the present
- Brief overview
- Characteristics of Arbitration/ Advantages and Disadvantages
- Types of Arbitration
- The arbitral process
- Selecting a tribunal
- Preliminary meeting
- arbitration agreement
- The award
- Costs of arbitration
- Time limitations to settle an award
- summary
The result of the procedure is final and binding decisions, and at the same time it is adapted to the needs of the clients. 123 Robert Karrar Lewsley "The confidentiality of arbitrations in the UAE" (Al Tamimi and Co., September 2012)
The decision on tribunal fees depends on the speed and efficiency of the initiation and compilation of the case. This corresponds to the full amount claimed or counterclaimed plus 20% of the tribunal's fee advance is added to the cost of arbitration's advance. The tribunal will also notify the parties of the award by sending a signed original copy within 15 days of its issuance.
Parties will divide the payment equally, and the lack of payment by one party will be compensated by the payment of the other party and will then be paid by the losing party. Furthermore, 5% of the award amount will be paid to the court to obtain a consent award, provided that it does not exceed AED 40,000. In addition, 20% of the arbitrator's fees will be paid in advance to cover the tribunal's expenses.
Artikel 37(1) i UAEs føderale lov nr. 6) af 2018 om voldgift Artikel 6(3) i Chartered Institute of Arbitration Rules. Cavaleri S, 'Construction Adjudication In A Comparative Perspective: The Case Of The Danish Speedy Resolution International Construction Law Review. Gould N, 'An Overview of the CIArb Dispute Board Rules' (7th Annual IBC Construction Law: Contracts and Disputes-konference, London, juli 2015).
