dispute resolution in construction industry recent … · · 2017-06-27dispute resolution in...

Dispute Resolution in Construction Industry

Recent Trends and the Way Forward

Christopher To - Executive Director, Construction Industry Council

13 November 2013

Society of Construction Law Hong Kong

Content

• Characteristic of Construction Industry in Hong Kong

• Payment Problems and Legislative Approaches

2

• Adjudication

• Expert Determination

• Independent Expert Certifier (IEC)

• Dispute Resolution Advisor (DRA)

• CIC’s work on Dispute Resolution and Partnering

Characteristic of Construction

3

Characteristic of Construction Industry in Hong Kong

Characteristics of the Construction Industry in Hong Kong

• One of the major pillars of theoverall economy and majoremployers in Hong Kong

4

� overall contribution to GDP was3.3% in 2010

� overall employment share was7.8% in 2011

� There were 1,228 activeconstruction sites in March2013

Characteristics of the Construction Industry in Hong Kong (Cont’d)

• Wide range of construction activities - fromnew construction to alteration, repair ordemolition of buildings and civilengineering works

• High level of multi-tier sub-contracting

5

• Projects of different scale and complexity

• Increasingly complex and fast-trackconstruction projects

• Changes to the details of the design aretypical and frequent throughout theconstruction process

• Intense competition among contractors


• Latest statistics (as at 13 June 2013)

Q1 2013

(HK$ billion)

% change

Gross value of construction works in nominal

terms performed by main contractors

6

terms performed by main contractors

• Private sector sites

• Public sector sites

• Locations other than sites

11.6

16.3

15.2

+3.4

+24.0

+14.2

Total 43.2 +14.4

Residential building projects 9.3 +8.8

Transport projects 10.5 +55.7


7

Parties Involved in Construction Projects

• Rights and obligations of the parties are governed by a contractual web formed by a series of separate and often independent contracts

Employer

8

Employer

Architect/civil engineer

Quantity surveyor

Structural engineer

Services engineers

General contractor

Domestic sub-contractor

Sub-sub-contractor

Supplier

Nominated sub-contractor

Example: Traditional Form of Contract

CIC’s Work on Dispute Resolution

The Reference Materials summarises the

discussions and recommendations of the

Reference Materials for Applications of Dispute Resolution in Construction Contracts (Version 1) January 2013

99

discussions and recommendations of the

Task Force on Dispute Resolution

Documentation on the sample contract

clauses and to facilitate the incorporation of

the relevant alternative dispute resolution

methods recommended in the 2010

Guidelines into construction contracts.

Payment Problem and

10

Payment Problem and Legislative Approaches

Payment Problems and Legislative Approaches

� “Construct for Excellence” reportpublished by the Construction IndustryReview Committee in 2011.

� Suggested the need for enacting

11

� Suggested the need for enactingsecurity of payment legislation

� to facilitate quick and easy payment forwork or suppliers provided by contractors,subcontractors and suppliers to headcontractors or principals underconstruction contracts

Payment Problems and Legislative Approaches: HKCA Survey

2008

HKCA conducted a survey on“General Building Contractors andSpecialist Contractors’ Status on

12

Specialist Contractors’ Status onCash Flow & Other Relation Issues”

Objectives:

� to collect information on theextent of cash flow problems

� to formulate strategies toimprove the situation

Payment Problems and Legislative Approaches: HKCA Survey (Cont’d)

Results:

• Inflation and high cost of materials was a big problemfor contractors

• Outstanding payment problem from the contract parties

13

• Outstanding payment problem from the contract parties

• Insufficiency of new projects awarded

• Demand on wages by workers

• Other contract parties’ non-proactive attitude on contractadministration

• Payment in disagreement with the other contract parties

• Change of terms and requirements by the other contractparties

Payment Problems and Legislative Approaches: CIC Survey

2009

• CIC conducted a survey on “ Problems of Outstanding Payment in Construction Supply Chain”

14

• Survey respondents: employers, consultants, contractors, subcontractors and suppliers

• Objectives:

� to identify problems of outstanding payment within the industry

� to formulate strategies to improve the situation

Payment Problems and Legislative Approaches: CIC Survey (Cont’d)

Results (serious payment problems in private works):

• Late resolution of disputes

• Continuation of work while arrears were notsettled

15

settled

• Late settlement of final account

• Delay in certification of interim payments

• Other obstacles for payment

Payment Problems and Legislative Approaches: CIC’s Initiatives

Initiatives proposed by CIC to address the seriouspayment problems:

• To set up

�Task Force on Standard Contract Provisions for

16

�Task Force on Standard Contract Provisions forDomestic Subcontracts

�Task Force on Dispute Resolution Documentation

�Task Force on Security of Payment Legislation

Payment Problems and Legislative Approaches: CIC’s Initiatives (Cont’d)

Task Force on Standard Contract Provisions forDomestic Subcontracts

• To work out a set of standard clauses forincorporating into domestic subcontracts as

17

incorporating into domestic subcontracts asappropriate

• The standard domestic subcontract is expected tobe launched in 2013

Payment Problems and Legislative Approaches: CIC’s Initiatives (Cont’d)

Task Force on Security of Payment Legislation

• To consider the necessity of security of paymentlegislation in Hong Kong

• To made recommendation of suitable legislative

18

• To made recommendation of suitable legislativemeasures to the government

Payment Problems and Legislative Approaches: CIC & DEVB Survey

2011

Task Force on Security of Payment Legislation andDevelopment Bureau (DEVB) conducted anindustry-wide survey on “Payment Practice in theConstruction Industry”

19

Construction Industry”

• Objectives:

�To ascertain the magnitude of the paymentproblems in the local construction industry

�To seek views of stakeholders on the effectivenessof possible administrative and legislativesmeasures to secure payments in the constructionsupply chain

Payment Problems and Legislative Approaches: CIC & DEVB Survey (Cont’d)

Details:

• Survey frame: 8,100 companies

• Reference period: 1 Jan 2009 – 31 Dec 2010

• Participants: Private sector developers and public

20

• Participants: Private sector developers and publicsector employers, Consultants, Main contractors,Sub-contractors (both specialist and domesticsub-contracts), Suppliers

• Selected sample: 1,900 companies

• No of interviews conducted: 1,200

• Overall response rate: 64%


Key findings:

• Average outstanding payments per annum

� for main contractors: HK$9.4 billion (8% of annualaverage business receipts)

21

average business receipts)

� for sub-contractors: HK$9.9 billion (12% of annualaverage business receipts)

• Major reason for payment problems encounteredby the main contractors, sub-contractors andconsultants

� disagreements and disputes between the contractingparties


Key findings (cont’d):

• Considered payment problems to be very serious/seriousSubcontractors Suppliers Main

Contractors

Consultants

57% 59% 45% 37%

22

• Considered conditional payment practice as not acceptable/not reasonable

57% 59% 45% 37%

Subcontractors Suppliers

74% 79%


Key findings (cont’d):

• Respondents’ views on the effectiveness of administrative and legislative measures to improve payment problems in contracts

Administrative Measure Legislative Measures

23

Administrative Measure Legislative Measures

Public Works Very Effective/Effective Very Effective/Effective

Private Works Very Effective/Effective


Survey report:

• Incorporated with views from REDA, HKCA, HKFEMCand HKCSA

• Submitted to DEVB in September 2012

24

• Submitted to DEVB in September 2012

�as a reference for the Government to effectively enactsuitable legislation to resolve the underlining problemsof payment practice along the construction supplychain

Working Group on Security of Payment Legislation for the Construction Industry

• Working Group on Security of Payment Legislation for theConstruction Industry was set up in October 2012.

Issues with general

consensus• A total of 49 key

25

67%8%

25%

consensus

Issues with

difference in views

but with adequate

deliberations

Issues with

difference in views

and require further

deliberations

issues have beendiscussed.

(33)(4)

(12)

Working Group on Security of Payment Legislation for the Construction Industry (Cont’d)

Key Issues with General Consensus

• Scope of Application

26

� Applicable when law of the contract is not HK law

� Same treatment for parties with different nationalities

� To include different types of consultancy services (e.g. feasibility andplanning studies), but excluding accounting, legal and financial services

� To include ‘Supply Only’ contracts and ‘Supply & Installation’ contracts

� To include industry / specific exclusions (e.g. employment contracts),insurance, loans, BOT, PPP and investment contracts.



• Rights to Progress Payments� Parties should be free to agree when entitlement to payment would rise

27

� Parties should be free to agree when entitlement to payment would rise

� Default payment interval provided in SOP legislation (Default Interval = 1calendar month)

� Payment period - 60 days (interim progress payment) and 120 days (finalpayment)

� Payment response period - 30 days (interim progress payment) and 90days (final payment)

� Payment claim model to be adopted

� Failure to respond to a payment claim should not lead to full amount ofclaim becoming due for payment



• Adjudication� Right to adjudicate applies to claims / disputes arising up or down the contractual

chain� Time limits for referring claims / dispute = 28 days

28

� Time limits for referring claims / dispute = 28 days� No exclusion of certain types of claim from adjudication� No statutory control on who can be an adjudicator and a nominating body (left to

the free market)� Parties to be free to agree the nominating bodies and to agree their own

adjudicator. HKIAC to be the sole default nominating body� Adjudicators should not have the power to order one party to pay the other’s legal

costs� Adjudicator should have the power to order one party to pay adjudicator’s costs

and expenses� The SOP legislation should not provide for a review adjudication mechanism



• Right to Suspend Works for Non-Payment� Party intending to suspend for non-payment should give notice to the principal and

site owner (if known)

• Prohibition on Conditional Payment

29

• Prohibition on Conditional Payment� Pay-when-paid type provisions should be outlawed� SOP legislation should prohibit ‘pay-when-certified’ provisions. No exceptions

should be allowed for Nominated Subcontractors� ‘Pay-when-paid’ arrangements should be ineffective in the event of insolvency

• Enforcement of Adjudicator’s Decision� Express provision for enforcement by allowing adjudicator’s decision to be filed

directly in court� No express right to stay enforcement pending conclusion of court / arbitration

proceedings� Adjudicator should not have express power to issue approval for a charging order

against the site where a claim was against the site owner


Key Issues with Different Views and Adequately Deliberatedin Previous Meetings

• Geographical Scope (Application of SOP legislation limited to work carriedout inside HK due to legal uncertainty and small number of cross-boundary

30

out inside HK due to legal uncertainty and small number of cross-boundaryprojects)

• Written and Oral Contracts (Written, oral and partly written and oralcontracts to be included in the SOP legislation)

• Limitations on / Conditions Precedent to the right to Adjudication(Calculation of progress payment, statutory right to adjudication, initiation ofadjudication in relation to payment response, right to adjudication followingclaim handling procedures)


Key Issues with Different Views for Further Deliberations

• Adjudication timetable and problems of ‘Ambush’ and insufficient time forlarge / complex claims

31

large / complex claims� A period of 60 working days should be the maximum time allowed for the adjudication

process (from submission of adjudication claim to adjudicator’s decision)

� Flexibility should be provided for preparation of defence by respondent and/or therendering of adjudicator’s decisions in complex cases

� Time for responding party to submit his defence should be 20 working days

� Adjudicator has no power to dismiss claims considered too large and complex foradjudication



• Statutory right to suspend works for non-payment� There should be a statutory right to suspend work by the unpaid parties in the event of

32

� There should be a statutory right to suspend work by the unpaid parties in the event ofnon-payment by paying party.

� Right to suspend should arise only after adjudication and when respondent failed tocomply with adjudicator's decision.

� Unpaid parties should have advance notice of suspension to the paying parties

� Unpaid parties should have statutory rights to additional time for completion andreimbursement of costs arsing from suspension

� Flexible approach to assess entitlement to EOT and additional costs

� Unpaid parties should be entitled to suspend the whole or part of works or to reduce rateof progress



• Enforcement of Adjudicator’s decision� The principal (the employer of the non-paying party who fails to honour an adjudicator’s

33

� The principal (the employer of the non-paying party who fails to honour an adjudicator’saward) has the right (but not obligation) to make direct payment of an adjudicator’saward to the unpaid party.

The above issues were discussed in the Working Group Meeting held on 31October 2013.

Disagreement

DRA/DRB/Partnering

Dispute

Mechanisms for Dispute

Avoidance Measures

Dispute Resolution

Mechanisms

Overview of Construction Dispute Resolution Mechanisms (Cont’d)

34

Independent

Expert Certifier

Post-Completion Arbitration or

Litigation (if no Arbitration Agreement)

Adjudication

Arbitration or

Litigation (if no

Arbitration

Agreement)

Expert

DeterminationMediation

(Interim) (Interim)

Valuation/Payment

related mattersAll matters

(Final)

(Final)(Final)

(Supplemental

contract)

All mattersTechnical matters

All matters

Interim

settlement

before contract

completion

Disagreement

Disagreement

resolved

DRA resolves

disagreement

DRA appointed

One party initiates Dispute Resolution (DR)

DRA’s recommended Agree on one of the

YesYes

NoNo

NoNo

Overview of Construction Dispute Resolution Mechanisms (Cont’d)

35

DRA’s recommended

DR method accepted by

both parties

Agree on one of the

DR methods

Mediation Adjudication Independent

Expert

Certifier

Expert

Determination

Short Form

Arbitration

Execute the decision immediately

Enter into

settlement

agreement

Post-Completion Arbitration

Execute the decision immediately

Dispute

resolved

Dispute resolved

A party wants to

challenge the decision

Yes

No

Yes

NoNo

Yes

No

Yes

Adjudication

36

Adjudication

What is Adjudication?

A dispute preliminary resolved within a short time by an

adjudicator, usually an expert in technical matters, with his

decision to be bound for an interim period, i.e. until

completion of a construction project or until review in

(See for example the application of adjudication in UK under the

Housing Grants, Construction and Regeneration Act 1996)

decision to be bound for an interim period, i.e. until

completion of a construction project or until review in

arbitration or court proceedings.

What is Adjudication? (Cont’d)

Key features:

• Temporarily binding

38

• Adjudicator is a third party neutral

• The adjudicator will produce a decision after receiving evidence and writtenand/or oral submissions from the parties

• The decision is binding in the interim, but it is not final and can bechallenged in post-completion arbitration

• A statutory process in oversees security of payment legislation

Adjudication Procedure

Dispute

resolution

clause

provides

applicable

rules

Notice of

intention to

refer dispute to

adjudication.

Nominate

adjudicator.

Notice often

contains:

Response

addresses

matters set out

in notice,

attaches other

relevant

documents and

Adjudicator

appointed.

Adjudication

commences.

Adjudicator Adjudicator

39

Dispute

Parties agree

applicable

rules (no

HKIAC

adjudication

rules)

contains:

- summary of

nature and

background of

dispute;

- relief claimed;

- references to

relevant

documents,

copies

attached.

documents and

agrees

appointment of

adjudicator or

suggests

alternative.

HKIAC can play a

role in

appointment

depending on

what applicable

rules provide, or

parties’

agreement.

Adjudicator

often given

discretion to

decide

procedure.

This may involve

witnesses and

expert evidence

or a hearing, or

may be on a

documents-only

basis.

Adjudicator

makes written

decision.

Binding until

overturned by

an arbitrator

or court.

say

14

days

say

42

days

Adjudication: Hong Kong Experience

• Not commonly used in Hong Kong

• Provided for as a mandatory process in the Airport CoreProgramme in 1990s

� four construction disputes were resolved in two

40

� four construction disputes were resolved in twoadjudications with no further steps taken to challenge theadjudicator’s decisions

• One other adjudication was conducted in 2009 inanother context

• Dispute Resolution Advisor (DRA) system coupled withvoluntary adjudication� Specified in the civil engineering works contracts of the

Government with contract sum exceeding HK$200 million

Adjudication: Concerns over the Current Application

• Adjudication is too lengthy,time consuming andresource demanding.

41

resource demanding.

• The procedures are similarto those of arbitration.

Adjudication: Strengths and Weaknesses

Strengths Weaknesses

Quick resolution for disputes while the project team still

existed and memories still freshThe party who knows the rule of the game will give

threat for adjudication

Economical means to resolve disputes A party may ambush the other party since a party can initiate complicated adjudication at any time of the contract. There is a time limit for the other party

42

the contract. There is a time limit for the other party to prepare response

Jurisprudentially much more closely allied to certification by an architect or engineer

It is not sure if different disputes can be consolidated

Good cash flow for the Contractor It is not sure if additional parties, i.e. a subcontractor, can be added to the adjudication

Good budget control for the Employer By limiting the people involved in the adjudication process

and most evidence provided in documentary only (for

practicality and cost savings), the adjudicator may not be

properly informed of all the facts and only rough justice

may be obtained

Adjudication: Strengths and Weaknesses (Cont’d)


Avoid undesirable knock-on effects There is a time limit for adjudicator’s decision, so Only rough justice is done

Practical business decisions prevent an adjudicator’s decision be reviewed after practical completion of a construction project

Complex disputes may not be solved in the shorttime frame allowed in most adjudications, but can beExtended by the parties’ agreement

43

construction project Extended by the parties’ agreement

Unlike an Award of arbitration, there may be problems in Court enforcement of adjudicators’ decisions

Enforcement of international adjudication decision may Be problematic since adjudication is not covered by any international convention, i.e. New York Convention, or state legislation, i.e. Arbitration Act or Ordinance

New Adjudication Rules in Hong Kong??

The ‘Task Force on Dispute Resolution Documentation’ proposed a set of newAdjudication Rules with key elements as follow:

• Language – To remove ‘English’ as the language required to be morefavourable to smaller-sized contractors / subcontractors

44

• Place of Adjudication – no specific place to make it less formal

• Appointment – time take to appoint will need to be trimmed down

• Witness – adjudicator should not be called as a witness in subsequentarbitration or litigation

• Cost Allocation – absolute discretion and express power to determinewhich party pays for the costs

Expert Determination

45



Key features:

• A binding dispute resolution form

• A third party with expertise in a particular field is askedto give a determination on a disputed issue in that field

46

to give a determination on a disputed issue in that field

• Single issue or handful of related issues, not a wholedispute

• Either technical, financial or contractual issues

• Flexible procedures, query if due process required

• Consensual and confidential

• Challenges in limited circumstances

Appointment of Experts

Methods:

• Agreed by the parties

• Appointment by the HKIAC if no agreement can

47

• Appointment by the HKIAC if no agreement canbe reached

� HKIAC will establish and maintain a list of expertsin consultation with the HKIA, HKIE and HKIS

Appointment of Experts (Cont’d)

Requirements to become an Expert:• registered professional

• qualified by relevant professional institutes to have attained “fellow”

48

• qualified by relevant professional institutes to have attained “fellow”membership status or such qualification as recognized by theinstitutes

• complete a compulsory training course

• fulfill other criteria as determined appropriate by respectiveprofessional institutes

Experts Determination: Strengths and Weaknesses


Experts to resolve complicated technical or engineering issues

The determination is not backed by any legislation or international convention

Save costs and time for the adjudicating tribunal to understand the issues of dispute

Expert investigation process may be not be conducted properly and may have no control

49

Ensure relevant complicated technical or engineering issues identified, understood and adjudicated correctly by the expert

Unlike arbitration, investigation process is not backed by any legislation, i.e. compelling discovery

Difficult to appeal

Enforcement of determination is by enforcing contractual right which may be subject to set-off and counterclaim

Independent Expert Certifier Review

50

Independent Expert Certifier Review

Independent Expert Certifier (IEC) Review

• A new type of ADR• Independent Expert Certifier (IEC)

� an independent third party neutral with experience or expertise relevantto the area of the dispute

� conducts an independent and impartial review of the decision orcertification made by the Architect/Engineer/Surveyor (the Certifier)

51

certification made by the Architect/Engineer/Surveyor (the Certifier)� provides a second opinion based on the same documents and

information that were initially provided to the Certifier

• Decision of the IEC� the decision on the dispute is binding in the interim, i.e. during the

currency of the Works� the decision of the IEC is not final and can be challenged by post-

completion arbitration

• Role of IEC� IEC will not replace or alter the Authorised Person’s statutory duties, functions

and power.

Appointment of IEC

Methods:

• Agreed by the parties

• Appointment by the HKIAC in consultation with the HKIA,HKIE and HKIS if no agreement can be reached

52

HKIE and HKIS if no agreement can be reached

� HKIAC is recommended to establish and maintain a panelof IECs in consultation with the HKIA, HKIE and HKIS

� this appointment mechanism might be subject to review ofthe HKIA, HKIE and HKIS

Dispute Resolution Advisor (DRA)

53



Dispute Resolution Advisor is a neutral third partyjointly appointed by the Employer and Contractor at thebeginning of the project to familiarise the project and

54

follow through the project pro-actively to prevent disputeand to assist settlement of disagreement before they getcrystallized to become a dispute. The DRA has no powerto make decision but has his function to be facilitative.

Dispute Resolution Advisor (DRA) (Cont’d)

The role of DRA is to

� foster cooperation between the Contractor and theEmployer and their consultants and sub-contractors

55

� minimise the number of claim

� avoid conflicts in the first instance and

� settlement disagreement or disputes as they emerge andbefore the become disputes

DRA: Hong Kong Experience

• The concept of employing DRA to avoid constructiondisputes was practiced by the public sector since 1991� Architectural Services Department:

• used DRA in over 70 building projects since1991

• used Notice of Dispute - the DRA shall within 14 days attempt to

56

• used Notice of Dispute - the DRA shall within 14 days attempt toresolve the dispute; a written report should be provided within afurther 3 days if the dispute is not resolved

� Hong Kong Housing Authority: used DRA on all building andfoundation contracts since 2004

� Other Works Departments (DSD, CEDD, HYD, WSD): DRAextended to civil engineering works in 2005

• DRA system was also adopted by Hong Kong Scienceand Technology Parks Cooperation (HKSTP)

DRA: Hong Kong Experience(Cont’d)

The role of DRA in Building Contracts (e.g. of the HKHA) is also stipulated into the dispute resolution clause as a SCC:

57

“The role of the DRA is to foster co-operation between the

Employer and the Contractor and amongst Nominated Sub-

contractors …, to minimise the volume of claims, disputes and

disruptions to the Works, and to ensure the cost-effective and

expeditious resolution of those disputes that do arise,…”

DRA: Hong Kong Experience(Cont’d)

• The role of DRA in Civil Engineering Contracts of the HKSAR is stipulated into the dispute resolution clause as an SCC:


58


Contractor and the Employer and their consultants and sub-

contractors, minimise the number of claims, avoid conflicts in

the first instance and settlement disagreements or disputes as

hey emerge and before they become disputes….”

Use of DRA in Subcontracts??

The ‘Task Force on Dispute Resolution Documentation’ recommendedto consider the use of DRA in Subcontracts.

Factors to be considered:

59

Factors to be considered:

• Work Commitment - DRA may easily be overwhelmed by heavycommitments on all meetings with different parties

• Fee Payment - concerns of Employer paying the DRA fees forsubcontracts

• Domestic Subcontracts - dispute resolution for domesticsubcontracts may be more useful and practical then DRA insubcontracts

Admission of DRA

• Current list by Joint Management Committee (JMC) withrepresentatives from HKSAR Government WorksDepartments and HKCA.

60

• Whether there is a need for another DRA list for private sectorshould be further discussed.

• A good DRA may not necessarily be an experienced mediatoror arbitrator.

• Experience in project administration and site management aremore critical

Partnering

61

Partnering

Partnering

Partnering is defined by Bennett J. and Peace S. as:

‘a set of actions taken by the work teams that form a project team to helpthem cooperate in improving their joint performance’

62

The Construction Industry Institute in the United States definedpartnering as:

‘‘a long-term commitment between two or more organizations for the

purposes of achieving specific business objectives by maximizing the

effectiveness of each participant resources. This requires changing

traditional relationships to a shared culture without regard to organization

boundaries. The relationship is based on trust, dedication to common goals,and an understanding of each other’s individual expectations and values’

Partnering (Cont’d)

• Partnering requires cooperativeattitude among the parties that isbuilt on mutual trust and commongoals to achieve excellence

63

goals to achieve excellence

• Partnering can take the form ofcontractual or non-contractual

Non-Contractual Partnering

• Non-contractual partnering places emphasis on the process ofbuilding harmonious working relationship between stakeholders.

• The general principles and objectives that are intended to guideand govern the relationship between the parties are set out in the

64

and govern the relationship between the parties are set out in thepartnering charter which is not legally binding.

• During the project implementation stage, mutual objectives andperformance improvement are put forward through agreeddecision-making processes reinforced by partnering workshopsconvened by facilitator throughout the project.

Contractual Partnering

• Contractual partnering regulates the parties’ behaviour through a contractual framework which is legally enforceable

• Forms of standard partnering contracts includes� New Engineering Contract (“NEC”)

65

� New Engineering Contract (“NEC”)

� Be Collaborative Contract

� PPC 2000

• Happy Valley Underground Stormwater Storage Scheme� Largest NEC contract awarded by the HK Government (HK$678 million)

� Completion expected in early 2018

Partnering in Hong Kong

• Non-Contractual Partnering as a means for dispute avoidance was introduced in Hong Kong since the 1990s

• It is fairly common in Hong Kong public sector whereas private sector generally continues to adopt it on an ad-hoc basis

66

sector generally continues to adopt it on an ad-hoc basis

• Projects that adopted non-contractual partnering include � Choi Yuen Shopping Centre Phase 2,

� Central Concourse Expansion at the Hong Kong International Airport

� Route 8 Traffic Control and Surveillance System

� Design and Build of Improvement to Castle Peak Road

Partnering in Hong Kong(Cont’d)

• To date, most partnering relationships seen in Hong Kong havebeen non-contractual, although contractual partnering is gainingmonument

67

• MTRCL New Extension Projects will all be delivered usingpartnering whist the government is implementing a series of pilotprojects under the NEC form of contract using a suitable contractualpartnering arrangement.


68

CIC’s Work on Dispute Resolution and Partnering


The Guidelines aim to provide

industry stakeholders, particularly

private sector employers, with

Guidelines on Dispute Resolution (Version 1) September 2010

6969

private sector employers, with

more information about the use of

dispute avoidance measures and

various dispute resolution methods

for resolving different forms of

disputes in their construction

contracts.

Guidelines on Application of Dispute Resolutions inConstruction Contract (to be published)

To prepare sample contract clauses for implementing the

CIC’s Work on Dispute Resolution(Cont’d)

7070

To prepare sample contract clauses for implementing thedispute resolution mechanism as recommended in theGuidelines on Dispute Resolution to facilitate the adoptionof the new mechanism in the local construction contracts.

CIC’s Work on Partnering (Cont’d)

The Guidelines are intended as a reference document for employer, consultant and contractor

Guidelines on Partnering (Version 1) August 2010

7171

consultant and contractor organisations considering the use of partnering on construction projects in Hong Kong. They aim to provide practical advice with guidance on the use of the forms of partnering contracts that are currently available.

CIC Website <www.hkcic.org>

72

A Quote

“World Peace, like community peace, does not

require that each man love his neighbor – it

requires only that they live together with mutual

7373

tolerance, submitting their disputes to a just and

peaceful settlement.”

By John F. Kennedy

A Quote

“Discourage litigation. Persuade your neighbors to

compromise whenever you can. As a peacemaker

the lawyer has a superior opportunity of being a

7474

good man. There will still be business enough.”

By Abraham Lincoln

Thank you

75

Thank you

dispute resolution in construction industry recent … · · 2017-06-27dispute resolution in...

Documents