Alternative Dispute Resolution (ADR) is a process whereby parties in a dispute attempt
to resolve their differences with the assistance of a neutral third party. In the
construction sector, companies prefer ADR over litigation as it is faster and more cost-
effective. ADR includes neutral evaluation, negotiation, conciliation, mediation and
arbitration. Here are some advantages of alternative dispute resolution and how
construction arbitration is different from general arbitration dispute resolution.
Advantages of alternative dispute resolution:
When used appropriately, ADR can:
Construction arbitration vs general arbitration:
Here are some of the differences between construction arbitration vs general arbitration:
1. Unique nature of dispute:
Construction disputes are unique in that they often involve multiple parties that may not be directly connected to the dispute but are nonetheless affected parties. This isn’t the case in general arbitration cases. Also, the life of a construction project may be spread over a few years. During a project cycle, a large volume of data will be generated which will need to be reviewed and analysed at the time of the dispute, this may not be the case in generic arbitration.
2. Calculating the quantum of damages:
In construction arbitration, the issues range from overtime schedules to defects in engineering designs. So to decide damages, the arbitrator must take the help of expert surveyors and specialists or should be a construction expert. In generic arbitration, the parties generally pre-estimate the loss and contract clauses provide how damages are to be calculated or there is a pre-estimate amount decided by the parties.
3. Multiple stakeholders in construction disputes:
Construction projects are complex undertakings that involve a multitude of parties, each with its own contractual agreement and dispute resolution process. When delays, inefficiencies or defects occur, it can be difficult to determine who is responsible. One way to achieve a universal resolution is to join all the interested parties in a single proceeding. This allows for an award to be apportioned appropriately and avoids inconsistent decisions.
4. Arbitration contract:
Construction arbitration is a domain-specific type of arbitration that deals with construction disputes that may arise in the lifecycle of a project. As compared to generic arbitration, construction arbitration has its own set of rules and procedures that are designed to suit the needs of the specific situation encountered by the parties. One of the key differences between construction arbitration and generic arbitration is the use of oral witnesses. In construction arbitration, the use of oral witnesses is very low as compared to generic arbitration. This is because construction disputes usually involve deciphering complex contracts and documentation.
How can Contract Square Pvt Ltd help your business resolve construction disputes?
At Contract Square Pvt Ltd, we have well-experienced arbitration and dispute resolution experts who can be entrusted with all your contract and claims management issues while you focus on timely execution and delivery of the projects. Our experts encourage ADR for speedy and cost-effective resolution of claims.