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Dispute resolution methods comparison toward Aircraft contracts

STUDENT PAPER

By Laura Faivre

SKEMA Business School

Paris, France

 



ABSTRACT

The aircraft industry is a very complex business because its products required a high expertise and heavy technologies. This complexity causes disputes between the parties which most of the time makes the contracts to fail. Thus, the aim of this paper is to identify and to compare the different dispute resolution methods thanks to the Additive Weighting Technique. This Multi-Attribute Decision Making method enables the author to find out which is the most suitable dispute method resolution. Indeed, at the end of the paper the author suggest the use of the Negotiation method to best resolve the disputes in Aircraft contracts. By applying that particular method Aircraft contractors will be able to resolve the disputes without damaging the relations between parties meanwhile saving time and money (compare to the other methods).

Key Words: Contract, dispute, resolution, process, aircraft industry

INTRODUCTION

In less than 5 years the Aircraft market is forecasted to increase till 209 billion of dollars. Even if the aircraft industry is very profitable it’s a complex business as well. This complexity weakens the Aircraft contracts and most of the contracts failures are due to disputes between the parties. In the major cases, these disputes arise because of a poor scope definition of the project. The causes of the disputes are several like: aircraft crash, payments, cultural issues, unprofessional procedures, insufficient durability, missing part of work, delayed delivery… However, there are an amount of process and tools to resolve those contracts disputes. Indeed there is: mediation, arbitration, adjudication, court action, meetings…

In this paper I’m going to review what are the different alternatives to disputes resolution according to those references: EJCDC, CSI Manual Practice,  Fidic, Consensus Docs and AIA. I will develop the outcomes of each alternative and compare them thanks to some criteria. Finally, I will be able to select which is the best alternative to resolve disputes in Aircraft contracts.

Disputes in Aircraft contracts can damage the relationship between different parties and can also threaten the meet of requirements as well as affect negatively the quality of the output and its time delivery. That’s why the recommendations that I will make at the end of my paper is a good opportunity for Aircraft contractors to avoid losing time and money using disputes resolution methods that don’t work for their industry.

In this paper I will answer these questions:

  1. What are the different methods that could be used to resolve disputes in Aircraft contracts
  2. What is the most suitable dispute process in this particular industry and why?

METHODOLOGY

In order to answer the problem of this paper I used several methods of the Multi-Attribute Decision Making (MADM) because most of the attribute are subjective so it’s a good way to quantify them. Therefore, I chose to use a Disjunctive Reasoning Technique (from the non-compensatory model). Moreover, I used a Relative Weighting Technique and an Additive Weighting Technique (from the compensatory model).

More…

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].




About the Author


Laura Faivre

Paris, France

 

 

Laura Faivre is a SKEMA Business School’s student from the Msc Project & Programme & Business Development (PPMBD) program in Paris at La Défense. She graduated from a 2 years technical degree in Marketing in 2015 from the University of Amiens. In January 2018 she will do 6 months internship in transversal project management at the Headquarter of La Société Générale (a bank). She is currently living in France and can be contacted at [email protected].