Construction Arbitration: Guidelines for Alternative Dispute Resolution Mechanism in Construction Contracts
Dr. Moustafa I. Abu Dief1 and Prof. Dr. Ibrahim Abdlrashid2
1 Contracts and Claims Manager, Z- Benaa JV
2 Construction Engineering and management professor, Ain-Shams University, Egyp
The global fall back in the construction industry and economic recess in the Middle East revealed many consequences in the construction projects, such as suspension, delay, payment corruption, cash flow failure, termination for default/convenience, and etc. Those consequences dragged the projects to critical status cases of claims, disputes, loss of business opportunities, especially when the disputes are referred to litigation with its featured disadvantages and damages backlog in the construction industry cases. Such severe circumstances shaded the light on the need to manage and control the construction disputes through win-win resolution mechanisms which is mainly achieved when the disputing parties go into a consensual procedure that was planned and designed by their own interference, like Mediation and Arbitration mechanisms. That is typically the need for Alternative Dispute Resolution (ADR) mechanisms which had been widely adopted internationally in the construction industry to ensure fairness and maintaining the business relationships since the 1970’s. This paper will review and discuss the different ADR mechanisms which are considered most appropriate to be applied in the troubled construction projects.
Keywords: Construction- ADR- Dispute Claim-Arbitration- troubled projects
ADR is generally known as any process or procedure implemented for resolving disputes apart from the adjudication by a judge in a statutory court. The ADR basis incorporates mutual consent between the parties either for proceeding with the dispute resolution mechanism or for determining the dispute result. (ADR) has demonstrated a valued support in boosting access to justice, taking speedy and cost-effective dispute resolution mechanism based on mutual consent that maintains the businesses relationship between the parties.
Alternative dispute resolution (ADR) is a name addressed to several methods used to resolve disputes apart from the litigation, the methods include, Arbitration, Mediation, and Adjudication. ADR aims to achieve accelerated resolution of the dispute and maintaining the amicable manner in the construction industry.
The ADR may be utilized as dispute settlement and or dispute resolution mechanisms for its different advantages which are badly required in the construction industry, such as confidentiality, consensual mechanisms, and maintaining the continuality business between the disputing parties.
- Alternative Dispute resolution Categories
Main types of ADR:
ADR includes different system of its processes; it is categorized mainly into 2 categories, as demonstrated in Fig. 1, and discussed below:
About the Authors
Kingdom of Saudi Arabia
Dr. Moustafa Ismail Abu Dief. Ph.D., FICCP, CFCC™, CCP, PMOC, PMP®, Certified Forensic Claims Consultant, is a project management professional with over 25 years of experience in the field in Egypt and Saudi Arabia, mainly in contract and claims domain. Moustafa is delivering training courses in FIDIC, NEC3 contracts and claims management. Dr. Moustafa Ismail can be contacted at the following:
Ibrahim Abdlrashid is a professor of construction engineering and management at Ain-Shams University in Cairo, Egypt. He is a seasoned consulting engineer in the construction management domain.