M006 - Confli Conflict ct Avoid Avoidanc ance, e, Ma Manag nageme ement nt and and spu e eso u on roce ures
By:: Ya By Yasa sas s Ch Chan andr drad adas asa a
MSc,, BSc (QS) Hons, MSc Hons, MRICS MRICS,, MACostE MACostE
M006 - Con Confli flict ct Avo Avoida idance nce,, Mana Managem gement ent and Dispute Resolution Procedures Description of Competency “This
competency
covers
t he
quantity
surveyor’s
involvement with the avoidance, management and resolution
of
disputes
in
construction
projects.
and techniques commonly used in the industry. They should have a detailed understanding of how these are applied in practice.” (RICS APC Pathway Pathway Guide, March 2014 – Quantity Surveying and Construction)
M006 - Con Confli flict ct Avo Avoida idance nce,, Mana Managem gement ent and Dispute Resolution Procedures Mandatory Competency – Level 1
Level 1 Demonstrate knowledge and understanding of the techniques for conflict avoidance, conflict management and dispute resolution procedures including for example adjudication and arb ar bit itr rat atio ion, n, ap appr prop opr ria iate te to yo your ur AP APC C pa path thw way ay..
Level 2 Provide evidence of practical application in your area of practice having regard to the relevant law.
Provide evidence of the application of the above in the context of ad advi vis sin ing g cl clie ient nts s in va vari riou ous s ci cir rcu cum msta tanc nce es.
(RICS APC Pathway Pathway Guide, March 2014 – Quantity Surveying and Construction)
M006 - Con Confli flict ct Avo Avoida idance nce,, Mana Managem gement ent and Dispute Resolution Procedures Study Check List • How standard forms of contract deal with conflict avoidance and dispute resolution • Con Con li lict ct avo avoid idan ance ce • Partnering • Ne otiation • Mediation • Conciliation • Adjudication • Arbitration •
re-ac on
ro oco
• Litigation • Ex ert Witness • Independent Expert Determination (RICS APC Pathway Pathway Guide, March 2014 – Quantity Surveying and and Construction)
What is Conflict? “1. A situation which people, group or countries are involved in a serious disagreement or argument, 3. A situation in which there are opposing ideas, opinions feelings or wishes; a situation in which it is difficult to choose” (Oxford Advanced Learner’s Dictionary)
Pre-Contract Stage
Post-Contract Stage
PrePr e-Co Cont ntra ract ct St Stag age e Have a carefully drawn up set of Contract documents at the begging of a project to ensure that there is no or minim min imum um am ambi bigu guit ity. y. • Prepare Tender documents with proper coordination among various trades (architectural, structural, MEP, etc.) • Use Stan ar
Met o s o Measurement
• Allow sufficient time • Appoint qualified professionals • Chose the correct procurement path • Use standard forms of Contracts (CoC) • Provide proper answers for tender queries & distribute them to t o all tenderers • Provide Correct information at the right time t ime • Car arr r
outt ou
ro er te tend nde er eva valu luat atio ion n
Post Po st-C -Con ontr trac actt St Stag age e Administrate the Contract by fully competent Contract Administrators, in accordance with the Contract Agre Ag reem emen entt . • Properly Properly discharge the obligations and the liabilities in timely manner • Have a proper knowledge of their rights
How standard forms of contract deal with conflict – • Provide clear definitions and interpretations • Clear explanations of the parties rights and obligations • Clear explanations of the Engineer’s duties and authorities • Clear explanations of the procedures; e.g. Variation procedure • Priority of Contract Document
What is Dispute? “An argument or a disagreement between two people, group or countries” (Oxford Advanced Learner’s Dictionary)
Litigation
Dispute Resolution Procedures Alternative Dispute Resolution
Litigation: The process of resolving disputes by filing or answering a complaint through the public court system
When to Litigate • Where negotiations have proved unsuccessful and there is no right of adjudication (in UK) and/or Arbitration; or • Where there is no dispute resolution clause in the contract; or
Advantages of Litigation: • judgments of the court are readily enforceable; • judgments are subject to very limited rights of appeal; • the quality of judges is usually very high; • the court and judge's time is free (subject to the payment of court fees); • an array of interim remedies, such as injunctions, is available to support the process; • t e process s a
e to
ea ea e as y w t
t
r
part es;
• judges are usually full-time and are therefore very experienced. Arbitrators in contrast usually only sit as arbitrators once in a while;
• claims can be brought against several defendants in the t he same action; and • the processes are detailed, well defined and widely understood.
Disadvantages of Litigation: • proceedings are often time-consuming and complex. The process requires the use of solicitors and/or barristers, and is therefore often expensive; • the courts are not able to t o deviate from the Civil Procedure Rules (CPR). They are relatively inflexible; • the process is necessarily adversarial. This often leads to conflict and a destruction of any goodwill between the parties; • t e courts are open to t e pu
c an
t e press; an
• the losing party has to pay the t he costs of the winning party (subject to any offers) thus turning the attention of the parties very quickly form an .
Pre-action Protocol • to agree a pre-requisite procedure before commencing the litigation.
Alternative Dispute Resolution (ADR): ADR is a collective description for methods of resolving disputes without the need to go to court Thes Th ese e in incl clud ude: e: Common Advantages of ADR
• Mediation • Expert Witness • Adjudication • Ar Arbi bitr trat atio ion n
Confidentiality
No or less destruction of any goodwill and business relationship between parties
• Dispute Boards • Expert Determination (RICS, 2014)
• Negotiation
Negotiation: The principles of negotiation in the context of a dispute are similar to the principle les s of negotia iattio ion n in any oth the er conte tex xt. Each party has expectati tio ons and a lower limit (usually expressed in monetary terms). Where the lower limits overlap, it should in theory be possible to negotiate a settlement. Howe Ho weve ver, r, th the e si situ tuat atio ion n is ra rare rely ly th this is st stra raig ight htfo forw rwar ard. d. (http://ww (http: //www.isu w.isurv.com rv.com,, 2013)
Mediation: Mediation is the name given to a confidential process whereby parties to a dis isp pute in inv vit ite e a neutr tra al individual to fa fac cilit ita ate negotiati tio ons betw twe een them with a view to achieving a resolution of their dispute. (http://ww (http: //www.isu w.isurv.com rv.com,, 2013)
Conciliation: Similar to mediation but the independent third party (conciliator) gives his/ hi s/h her op opin inio ion n on th the e di disp spu ute te..
Expert Witness : A person who is a specialist in a subject, often technical, who may present his/her expert opinion without having been a witness to any occurrence relating to the lawsuit or criminal case. It is an exception to the rule against giving an opinion in trial, provided that the expert is qualified by evidence of his/ hi s/he her r ex expe pert rtis ise, e, tr trai aini ning ng an and d sp spec ecia iall kn know owle ledg dge. e.
xper
e erm na on:
An independent expert is appointed jointly by the two parties to give an expert opinion on the matter to be decided. The expert may have regard to evidence submitted or may have a hearing and adopt what they consider to be th the e most appropriate proce ced dure. The expert's decision is not enforceable directl tly y by th the e courts and they are lia iab ble for actio ion n for negli lig gence. (http://www (http: //www.isur .isurv.com, v.com, 2013)
Dispute Boards: An independent board evaluates disputes as similar to the DAB in FIDIC .
Adjudication: Adjudication is a statutory procedure by which any party to a construction contract has a right to have a dispute decided by an . than th an li liti tiga gati tion on or ar arbi bitr trat atio ion. n. It is normally used to ensure payment (although most types of dispute can be adjudicated), “Pay now argue later” . The Adjudicator must generally decide the dispute in less than 42 da s. The decision is binding and is usually upheld by the Courts in the UK. The scope of adjudication is set out in the provisions of the Hous Ho usin ing g Gr Gran ants ts,, Co Cons nstr truc ucti tion on an and d Re Rege gene nera rati tion on Ac Actt 19 1996 96.. However, there is no law provision in UAE law.
Arbitration: “Arbitration
is a private form of binding dispute resolution,
conducted before an impartial tribunal, which emanates from the
the th e st stat ate” e” (Latham & Watkins (2014), “Guide to International Arbitration”)
The arbitral tribunal can be made up of legal and/or industry ex erts chosen b
the
arties or a
ointed b
a
rofessional bod
that has been requested to do so by the parties. Arbitration is a private and confidential process to a greater degree. It can provide for the quick, practical and economical settlement of cr cros osss-bo bord rder er di disp sput utes es..
Advantages of Arbitration: • Usually a confidential process; • More flexible in terms of procedure than litigation; • Allows the parties to choose the tribunal; • Can be a neutral forum (for international disputes); • Award is final and binding; and • Relatively easy to enforce the award internationally.
Main factors to be considered when drafting an arbitration clause or agreement; • Seat of Arbitration Arbitration - The Arbitration Arbitration Act 1996 (UK) defines defines the seat of the arbitration as its judicial seat. The seat of the arbitration determines the procedural rules that govern the arbitration • Governing Law of Arbitration Agreement • Language of Arbitration • Number of Arbitrators • Scope of Disputes Covered • Institutional or Ad Hoc • Enforcement
Arbitration Under UAE Law: • Arbitration agreements are currently governed by the UAE Civil Procedure Law No.11 of 1992 (the Civil Procedure Code). • Article 203 of the Civil Procedure Code allows parties to provide in their contract or by subsequent agreement that any dispute between them in relation to the contract shall be referred to arbitration for resolution. • The same article also makes it mandatory that any such agreement for ar
trat on must
e n wr t ng n or er or t e ar
trat on prov s on to
enforceable.
• Abu Dhabi Commercial Conciliation and Arbitration Centre – ADCCAC • Dubai Chamber of Commerce and Industry Conciliation and Arbitration Centre Cen tre (know (known n as Dubai Dubai Int Intern ernatio ational nal Arbitr Arbitratio ation n Centre Centre – DIA DIAC) C) • Dubai Internatio International nal Financial Financial Centre Centre – DIFC
e
Challenging an Award: • The arbitrator's decision is final and binding on both parties (unless they otherwise agree) and can be challenged only on the basis of serious irregularity, lack of jurisdiction, or on a point of law. Where the award is incomplete or contains an error, the correct course of action is to apply to the arbitral tribunal and the tribunal can correct the award or make an addi ad ditio tiona nall aw awar ard d as ap appr prop opri riat ate. e.
New York Convention (also known as New York Arbitration Convention): •
e
onven on on
e
ecogn ec
on an
n orcemen o
ore gn
r
ra
Awards. • The two basic actions contemplated by the New York Convention are
the refe referral rral by a court court to arbitration arbitration.. • UAE made entry into force on 19 November 2006.
How stan How standa dard rd for forms ms of of cont contra ract ct deal deal wi with th Dis Dis ut ute e Resolution Relevant Clauses in FIDIC 87: • Su Subb-C Cla laus use e 67 67.1 .1 – En Engi gin nee eer r’s De Deci cisi sion on • Su Subb-C Cla laus use e 67 67.2 .2 – Am Amic icab able le Se Sett ttle leme ment nt • Su Subb-C Cla laus use e 67 67.3 .3 – Ar Arbi bitr trat atio ion n
Relevant Clauses in FIDIC 99: • Su Subb-C Cla laus use e 3. 3.5 5 – De Dete ter rmi min nat atio ion ns “…..If agreement is not achieved, the Engineer shall make a fair dete ter rmin ina atio ion n in acc cco ordance with the Contract, takin ing g due regard of all relevant relev ant circu circumstan mstances…” ces…” • Su Subb-C Cla laus use e 20 20.5 .5 – Am Amic icab able le Se Sett ttle leme ment nt • Su Subb-C Cla laus use e 20 20.6 .6 – Ar Arbi bitr trat atio ion n
How stan How standa dard rd for forms ms of of cont contra ract ct deal deal wi with th Dis Dis ut ute e Resolution Relevant Clauses in FIDIC 99
(cont…):
• Sub-Clause Sub-Clause 20.2 – Appointment of the Dispute Adjudication Board • Sub-Clause Sub-Clause 20.3 – Failure to Agree Dispute Adjudication Board • Sub-Clause Sub-Clause 20.4 – Obtaining Dispute Adjudication Board’s Board’s Decision • Sub-Clause 20.7 – Failure to Comply with Dispute Adjudication Board’s Decision “In th the e event th tha at: … c a
ar y a s o comp y w
s
ec s on,
then the other Party may, without prejudice to any other rights it may have, refer the failure itself to arbitration under Sub-Clause 20.6 .
-
.
’
Decision] and Sub-Clause 20.5 [Amicable Settlement] shall not apply to this thi s ref refer erenc ence.” e.” • Sub-Clause 20.8 – Expiry of Dispute Adjudication Board’s Appointment Appointment
M006 - Con Confli flict ct Avo Avoida idance nce,, Mana Managem gement ent and Dispute Resolution Procedures Study Check List • How standard forms of contract deal with conflict avoidance and dispute resolution • Con Con li lict ct avo avoid idan ance ce • Partnering • Ne otiation • Mediation • Conciliation • Adjudication • Arbitration •
re-ac on
ro oco
• Litigation • Ex ert Witness • Independent Expert Determination (RICS APC Pathway Pathway Guide, March 2014 – Quantity Surveying and and Construction)
M006 - Con Confli flict ct Avo Avoida idance nce,, Mana Managem gement ent and Dispute Resolution Procedures
ues ons • What is arbitration? What are the things we should write in the contract unde un der r th the e ar arbit bitra ratio tion? n? • How do you deal with the arbitration award in a dispute between a UK con co ntr trac acto tor r an and d a UA UAE E Emp mplo loy yer er? ? • Why dispute adjudicatio ion n board in FIDIC 99 and advantages? • Is adjudication used in UAE? • Is DAB practicing in UAE? • How various forms of contracts deal with conflict avoidance ce? ?
M006 - Con Confli flict ct Avo Avoida idance nce,, Mana Managem gement ent and Dispute Resolution Procedures
Many Thanks !
