ce & m- methods of dispute resolution

8/6/2019 CE & M- Methods of Dispute Resolution

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Dr. Rafiq Muhammad Choudhry

Head, Department of Construction Engineering & Management, NIT, SCEE, NUST

METHODS OF DISPUTE RESOLUTION

Associate Professor

Dr. Rafiq Muhammad ChoudhryBSc(Civil-Honor), MSc(CEM), PhD(MSE), Post-Doctorate (CEM), MIE(Pak), PE

Email: [email protected]/ [email protected]

Head, Department of Construction Engineering and Management-NIT

School of Civil and Environmental Engineering (SCEE)

National University of Sciences and Technology (NUST)

Sector H-12, Islamabad
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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MECHANISMS TO RESOLVE

CONTRACTUAL DISPUTES

Traditional Methods

Negotiation

Arbitration Litigation

Alternative Dispute Resolution (ADR)


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In litigation the parties take their disputes toCourts of Law for their resolution.

Litigation is a lengthy process (time consuming)

At times it becomes an endless process.Judgment by Court of original jurisdiction is

followed by a series of appeals/reviews/ revisions

in the hierarchy of Courts of Appeal

LITIGATION


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ALTERNATIVE METHODS

FOR DISPUTE RESOLUTION

Methods available to a contractor for resolution ofconstruction disputes.

Figure: Construction Claims Resolution Alternatives - LITIGATION.


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MECHANISMS TO RESOLVE

CONTRACTUAL DISPUTES

Alternative Dispute Resolution (ADR)


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ALTERNATIVE DISPUTE RESOLUTION (ADR)

Process and Technique that fall outside the Judicialprocess followed by Courts.

- ADR is generally classified into following sub-types:- Negotiation

- Mediation

- Conciliation

- Arbitration


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ALTERNATIVE METHODS



Figure: Construction Claims Resolution Alternatives - NEGOTIATION.


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Participation is voluntary No third party is involved to facilitate the resolution

process.

Mediation

Arbitration Third party is involved

Conciliation

NEGOTIATION


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(a form of settlement negotiation facilitated by aneutral third party) and non-binding resolution )

An act of bringing two parties in dispute closertogether toward agreement through alternative

dispute resolution (ADR), a dialogue in which a

neutral third party, the mediator, using appropriate

techniques, assists two or more parties to help themnegotiate an agreement on a matter of common

interest.

MEDIATION


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ALTERNATIVE METHODS



Figure: Construction Claims Resolution Alternatives - MEDIATION.


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An alternative dispute resolution (ADR), processwhereby the parties to a dispute agree to utilize the

services of conciliator who meets with the parties in

an attempt to resolve their differences

Main goal is to conciliate by seeking concessions

CONCILIATION


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Conciliation is an ADR process whereby theparties to a dispute agree to utilize the services

of a conciliator, who then meets with the parties

separately in an attempt to resolve their

differences.

He/She does this by lowering tensions, improving

communications, interpreting issues, providingtechnical assistance, exploring potential solutions

and bringing about a negotiated settlement.

CONCILIATION


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Conciliation differs from arbitration in that theconciliation process, in and of itself, has no legal

standing, and the conciliator usually has no authority

to seek evidence or call witnesses, usually writes no

decision, and makes no award.

Conciliation and Arbitration


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Conciliation differs from mediation in that the main goal is toconciliate, most of the time by seeking concessions. In

mediation, the mediator tries to guide the discussion in a way

that optimizes parties needs, takes feelings into account and

reframes representations.

In conciliation the parties seldom, if ever, actually face each

other across the table in the presence of the conciliator.

Conciliation and Mediation


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About:

Certification

Valuations

Instructions Determination

Opinion

Dispute


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NOTICE OF DISPUTE

ENGINEER DECISION

AMICABLE SETTLEMENT ARBITRATION

DISPUTE SETTLEMENT UNDER FIDIC - 1992


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DISPUTE ADJUDICATION BOARD (DAB)

DISPUTE REVIEW BOARD (DRB)

DAB & DRB


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ARBITRATION

A legal technique for the resolution of disputes

outside the court where in the parties to a dispute

refer it to one or more persons by whose decisionthey agree to be bound


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ALTERNATIVE METHODS



Figure: Construction Claims Resolution Alternatives - ARBITRATION.


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An ancient practice Under English law, the first law on arbitration was

the Arbitration Act,1697.

HISTORY OF ARBITRATION


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ARBITRATIONS UNDER VARIOUS LAWS &

PROCEEDURAL RULES

ARBITRATION UNDER LOCAL LAW

INTERNATIONAL ARBITRATION


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Any dispute shall be finally settled under theprovisions of the Arbitration Act, 1940 as amended

thereof for the time being in force.

The said arbitrator/s shall have full power to open up,

review and revise any decision, opinion, instruction,

determination, certificate or valuation of the Engineer

related to the dispute.

MODEL ARBITRATION CLAUSE LOCAL ARBITRATION


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Any dispute .. shall be finally settled, unlessotherwise specified in the Contract, under the Rules

of Conciliation and Arbitration of the International

Chamber of Commerce by one or more arbitrators

appointed under such Rules.

The said arbitrator/s shall have full power to open up,

review and revise any decision, opinion, instruction,

determination, certificate or valuation of the Engineerrelated to the dispute.

MODEL CLAUSE FOREIGN ARBITRATION


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ARBITRATION

UNDER ARBITRATION ACT, 1940

ARBITRATION PROCEEDINGS

CIVIL COURT ACTIONS UNDER ARBITRATIONACT, 1940


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Popular Arbitration Procedures followed in

Pakistan

No particular arbitration procedure has been

prescribed by the Arbitration Act, 1940. In the absence

of a standardized arbitration procedure, the arbitration

under the local law usually follows any one of the

following two procedures with the consent of parties:


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(i) Reliance on Documentary Evidence

Reference of Dispute (Statement of Claim) filed by the

Claimant > Written Reply (Statement of Defense) filed

by Respondent > Rejoinder filed by Claimant >Framing of Issues > Document submittal by both parties >Written Submittal > Arguments > Award.


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a) Filing of Award in the Court: At the requestof any party to the arbitration agreement or any

person claiming under such party or if so directed

by the Court the arbitrator (s) umpire shall causethe award or a signed copy of it to be filed in the

Court. Together with the award any depositions

or documents which may have been taken and

proved before them are also filed in the Court

1. COURT ACTIONS UNDER ARBITRATION ACT, 1940


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Once the arbitration award has been filed in theCourt for making it rule of the Court, the Court

issues Notice of Filing of Award in the Court.

This notice is served upon all the parties to thearbitration award. Any party willing to file

objections against the award for setting it aside or

wishing that the award be corrected or remitted

back to the arbitrator for reconsideration can doso within the prescribed period of limitation



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3. COURT ACTIONS

UNDER ARBITRATION ACT, 1940

Where the Court sees no cause to remit the award or any of the

matters referred to arbitration for reconsideration or to set aside the

award, the Court proceeds to pronounce judgment according to the

award, and upon the judgment so pronounced a decree follows and

no appeal lies from such decree except on the ground that it is in

excess of or not otherwise in accordance with the award.


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The Court passes such judgement afterthe time for making an application to set

aside the award has expired.



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Appointment of arbitrator Removal of arbitrator

Stay of Legal Proceedings

Setting aside the Award Enlargement of time for making the award



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ARBITRATION OR LITIGATION?

Almost all construction contracts include provisions

for binding arbitration of future disputes. Parties to the construction process often gain a false

sense of security from having an arbitration clause in

their contracts. Under both arbitration and litigation, the parties areasking an outside party to resolve their disputes.

Common sense dictates that the quickest, most

economical way is for the parties to resolve thedispute themselves, without intervention of others.


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Inconsistent Results

Arbitrators are not bound by rules of evidence, orfor any previously rendered decisions.

A court is obligated to be bound by previous decisions

rendered for similar circumstances.


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Speedy Results?

Arbitration hearings are not normally held on a day-to-day basis, and it is rare to be able to schedule

more than two hearings on consecutive days.

An arbitration that involves four days of hearings may

actually take two or three months.


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THE MEDIATION PROCESS

Why is a Mediator Needed?

A mediator is needed when one or more of thefollowing circumstances exist:

5. It is desired to furnish the parties with a realistic look

at the demands and possibility of obtaining them.

6. There is a wish to give the parties some idea of howtheir positions look to an impartial person.

7. The parties wish a mediator to be used as a conduit

through which private, confidential disclosures can be

made without jeopardizing their original positions. 8. There is a wish to avoid negative consequences, such

as a lawsuit.


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Mediation as Distinguished from Arbitration

Like arbitration, mediation is a private, unofficialmeans of dispute resolution.

Like arbitration, it is generally favored by modern law.

It generally promises savings in time and cost as compared

with civil litigation.


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Mediation & arbitration differ in a number of ways: 4. The arbitrator avoids all exparte communication with the

parties on the merits of the dispute or the parties' positions.

The mediator will nearly always assemble privately with each

party to learn as much as they are willing to disclose withrespect to the dispute.

5. While arbitration is a private proceeding, information

about it may become public in some circumstances.

As when a losing party seeks to have a court vacate the award. Mediations are settlement discussions, and, as such, some

information about them is inadmissible.


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Mediation & arbitration differ in a number of ways: 6. The arbitrator imposes a decision upon the parties that

he/she has made, which please neither party.

The mediator, if successful, guides parties to a decision

that they can have a major role in shaping. And with which, by definition, they both agree.


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Use of Mediation as a Dispute Resolution Tool

Mediation is generally used first, and its use mayprecede either arbitration or litigation.

It may be used even afteran arbitration or litigation.

Butpriorto an award.


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SETTLEMENT OF DISPUTES BY ARBITRATION

Business Disputes

In the world of business, disputes are inevitable,as one person may understand rights & obligations

differently from another.

No matter how carefully a contract is written.

When disputes arise out of day-to-day activities,

parties frequently like to settle privately & informally.

This is what commercial arbitration is for.


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What is Arbitration?

Arbitration is the voluntary submission of a disputeto one or more impartial persons for final and binding

determination.

It is private and informal, designed for quick, practical,

inexpensive settlements. An orderly proceeding, governed by rules of procedure

and standards of conduct prescribed by law.


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Arbitrators are experts, whose decisions representtheir judgments of the rights of the parties to a

dispute.

The guiding principle is to hear all material evidence

& notto hear arguments/evidence from one side on

which the other has no opportunity to comment/rebut.

A significant difference between court action & arbitrationis that, in arbitration, strict rules of evidence do not apply.


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Most arbitration cases are heard by a panel of threearbitrators, each usually representing a different field

of specialization.

Governed by majority rule, both in procedural decisions

and in rendering the award.

When three-person boards are used, it is customary

for one of the arbitrators to serve as a chairperson.

Whose powers are the same as those of the other two.


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Authority of the Arbitrator

This decision-making authority must be exercised bythe arbitrator alone to the best of its ability.

It may not be delegated to others.

Broad powers to determine matters of fact, law & procedure.

Under rules of arbitration, the award must be in

writing & represent the judgment of at least the

majority of the board. Unless the contract requires a unanimous decision.


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Arbitration Agreements Regulated by Law

Arbitration agreements are recognized by statute bythe Arbitration Act 1940.


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