ARBITRATION AND OTHER ALTERNATIVE DISPUTE RESOLUTION

(AS TOOLS FOR DISPUTE RESOLUTION IN THE CONSTRUCTION INDUSTRY)

 

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ABSTRACT

 

The word dispute resolution is a term that refer to several different methods or ways of resolving disputes “Arbitration and other alternative dispute resolutions can be defined as all forms of alternative disputes resolution (ADR) is a legal techniques for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons the arbitrary tribunal by whose decision the award they agree to be bond it is a settlement techniques in which a third party reviews the case and imposes a decision that is legally bonding both sides in construction industries.

My aim of writing on this topic is to emphasis on the strategies and critical conditions by which alternative disputes resolutions should be used in any dispute that might arise in construction firms, the research moved further to illustrate that with the growth of building industry all over the world, disputes cannot be easily settled and subsequently becomes the subject of claims by one party to the contract against the other.

Data were collected using well structured questionnaires administered to two professionals from Trans Ekulu Enugu metropolis.

The study background of the topic expressively revealed that arbitration is more preferable to all other alternative disputes resolutions. The paper concluded that all alternative disputes resolution are necessities for achieving a successful disputes settlement and reconciliation of both parties involved.

Keyword;  Arbitration, construction industry, Adjudication, mind trial, mediation, negotiation, motivation, litigation.

 

CHAPTER ONE

• Introduction 1
  • Aims and Objective of the study 9
  • Scope and Limitation of the Study 10
  • Methodology 10
  • Research Question 11
  • Research Hypothesis 11
  • Significance of the Study 12

 

 

 

CHAPTER TWO

• LITERATURE REVIEW 13
  • Dispute in the construction industry 14
  • The importance of arbitrations and other alternative

dispute resolution (OADRS) in construction  industry 15

• Persons who may be parties to arbitrators 21
• Reference to number of arbitrator 22
• Arbitrations differentiated with valuation 25
• Arbitration practices in Nigeria construction industry 26
• How matters can be referred to arbitration 33
• Requirement of an arbitration 34
• Appointment of an arbitration and umpire 35
• Arbitrators conduct 36
• Essential valid of arbitrator 37
• Removal of arbitration 38
• The pleading 40
• Discovery 42
• The hearing 43
• Stating a case 48
• The award 49
• Cost of arbitration 52

CHAPTER THREE

• RESEARCH METHOD 54
  • Method and source of data collection 54
  • Method of investigation 56
  • Description of respondents 57
  • Method of data analysis 57
  • Analysis and presentation 58

 

CHAPTER FOUR

• Data collection and their interpretation 59

4.1   Questions, results and interpretation                      64

 

CHAPTER FIVE

• Conclusion 69

5.1   Recommendation                                                     71

 

Bibliography                                                            72

Appendices                                                              74

 

CHAPTER ONE

 

INTRODUCTION

ARBITRATION AND OTHER ADRS ALTERNATIVE DISPUTE RESOLVEMENT AS TOOLS FOR DISPUTE RESOLUTION IN THE CONSTRUCTION INDUSTRY

 

DEFINITION

Alternative dispute resolution is a term that refer to several different methods or ways of resolving disputes between not less than two parties for determination, after hearing both sides in a judicial manner by a person or persons other than  a court of competent jurisdiction.

Here, mediation, conciliation mitigation and arbitration are commonly used in different areas of construction works rather than litigation, due to long time it takes the too much expense and other factors.

Mostly preferable, arbitration is common practice that is being adopted in Nigeria construction industry, so it is the reference of a disputes or difference between not less than two persons for determination, after hearing both sides in a judicial manner by a person or persons like other alternatives disputes resolution except litigation.

A person or persons to whom a reference to arbitration is made is known as an arbitrator or arbitrators, as the case may be. This or their decision is called AWARD. One or more arbitrators may be constituted into an arbitrary tribunal. The decision of such tribunals is called award also. If it is provided that in the dispute is to be resolved by a third party / person. Such person is called UMPIRE the decision of the umpire is also called AWARD.

Arbitrators is an alternative to litigation likewise all other alternative disputes resolution OADRs, conciliation, mediation and mitigation etc which are much used for settling disputes which involves technical or commercial elements. The essence of arbitration is that disputes are determined by a tribunal of parties choosing the right to arbitrate and powers between third parties involved. An arbitration agreement is often to be found as one of the clauses of a standard form of contract e.g. article five (5) f the JCT form. If these clauses are inserted into the contract conditions, it means that the parties agree to submit specified future of disputes to arbitration.

There may be an agreement to arbitrate made after the dispute has arisen. Either types of agreement provided that it is in writing is governed by the arbitration act of 1950. This provides that the arbitrators authority is irrevocably except through the court and that the arbitrators award is final and binding unless the parties otherwise.

The act provides that a reference in arbitration is deemed to be made to a single arbitrator unless the contrary is expressed. It is unnecessary for arbitrators to be in the arbitration agreement. Written agreement usually provide for the arbitrator to the agreed by the parties or to be appointed by a specific persons or body. The JCT form provides for appointment of the RIBA where the parties cannot agree and their is no mechanism for the appointment, the court has the power then to appoint an arbitrator.

Arbitrator is of big importance to the construction company for the proceeding are outsider the arbitral process is expedition and co-operations of the parties may be less expensive than court action.

The arbitrator award is final and binding on the disputants unlike a judgment in the court which can be challenged on appeal, there are very few grounds on which a party can apply to the high court to have an arbitrator’s award set aside and these grounds almost invariably relate to acts of misconduct by that arbitrators and not to the wealth or power of one of the parties.

The expert witnesses have role to play in arbitration. The expert witnesses are persons usually unconnected with the case but who are invited to give their professional opinion on the matters in issue leg as to whether certain materials are deflective. He differs from an ordinary witness for the fact that while the a=ordinary witness would be paid his expenses only, the expert witness is paid a proper fee for his work.

In enforcement of awards and payments of interest an arbitrator award does not in itself compel the loosing part to comply with the terms. The aids of the court must be involve and this may be done in the following ways:

 

1. Under section 26 of the arbitration act, the award may be the leave of the high court, be enforced as a judgment for the purpose of obtaining leave, an originating summons is issued by the high court.
2. If the award is for sum of money, the claimant may seek to enter summary judgment for the amount awarded. The arbitrator payment of cost and interest are the two final maters, which must be dealt with by an award. As costs the arbitrators should adhere to the principles of the court (I.e.) the successful party should have his costs unless there are proper reasons for not so awarding.

 

An award which deprives the successful party of costs without reason may be remitted by court. As to interest, the arbitrator has an implied power to induce this in his award. He should normally do so. Interest being awarded at a realistic rate from the date the money ought originally to have been paid i.e. for the period the successful party has been deprived of the sum awarded.

What is alternative dispute resolution? OADR as it is commonly called this is a legal techniques for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons (the arbitral tribunal) by whose decision (the award) they agree to be bond, this also comprises arbitration, mediation, conciliation, negotiation and mitigation.

The courts are backlogged with waits often measured in the years. People with disputes to settle want to do so quickly and then get on with their lives. ADR can in must cases be the answers to dilemma.

Construction industries business contracts and man status now contain requirements that disputes arising be settled using ADR

 

WHY WE USE ADR?

Some of the benefits of using ADR are as follows:

• Can be completed quickly
• Scheduled to suit the parties
• Generally less costly than proceeding through court of trial (Litigation)
• Confidentially – ADR settlement are private matter between the parties and there is not public record.
• ADR is generally voluntary except where it is required by contract or by statue.
• It is a rare for ADR settlement to be appealed to the court.

 

MEDIATION (THE PARTIES DECIDE)

This is a dispute resolution process in which the parties choose t participate and any agreement reached to settlement of dispute is done solely by the parties without interference.

The mediation is selected by the parties and once selected the mediator will arrange the mediation processes.

The mediator makes no decision instead he/she acts as a facilitator only to assist the parties to understand the dispute, provide structural discussion and to help the parties reach a dispute settlement agreement.

If the parties cannot reach a settlement agreement, they are free to pursue other options. The parties generally decide in advance how they will contribute to the const of the mediation is a very important form of ADR particularly if the parties wish to preserve their relationship.

 

CONCILIATION

It is a frequently used of ADR and can be described as similar to mediation. The conciliators role is to guide the parties to a settlement

The parties must decide in advance whether they will be bound by the conciliators recommendation for settlement. The parties generally share equally in the cost of the conciliation.

Conciliation is used in labour disputed before arbitration and may also take place in several areas of the law. A court of conciliation is one that suggests the manner in which two opposing parties may avoid trial by proposing mutually acceptable terms. In the past some states have had bureau of conciliation for se in contract / construction proceedings.

 

The federal government has established the federal mediation and conciliation services, an independent department devoted to settling labour disputes by conciliation and mediation or settlement of disputes through the interest variation of neutral party.

 

1.1   AIMS AND OBJECTIVE OF THE STUDY

The objective of this work is to bring basically tto the knowledge of practitioners in construction industry, the importance of resolving disputes in arbitrail manner. Also, adjudication, mitigation and litigation manner in Nigeria construction industries. It is also for the parties in construction contract to know that arbitration is more advantgageous (common. Easy to proceed and cheaper) in some things disputed than any other alternatives disputes resolution method. Though some others are still similar to arbitration.

 

 

 

• SCOPE AND LIMITATION OF THE STUDY

As a result of redundancy of many company director and consultants to give useful information that would have helped in this research. The researcher had to limit the scope of this work finding how many stakeholders in construction industry who know about arbitrator, conciliation and mediation and how many of them they use in preference to litigation. Other interesting factors are availability of funds and time.

I therefore will dully accept that there are other areas on this subject that more researchers can be carried out on.

 

• METHODOLOGY

The method used in researching is multiples data gathering method or techniques. The questionnaire and interview were used as the primary data and gathering instrument. The major research instrument was the questionnaire. It was used to provide a health and wealthy knowledge and information in situation where only experimental method can provide meaningful answer.

 

• RESEARCH QUESTIONS

In order to make this research work real, we have to introduce some of the questions.

1. What is the need for adequate information in arbitration for dispute resolution in the construction industry?
2. Can professional experience be used for arbitration in disputes in construction industry?

RESEARCH HYPOTHESIS

Ho:   Arbitration and disputes resolution has no need for adequate information for disputes resolution in construction industry

Ho:   Arbitration and disputes resolution has need for adequate information for disputes resolution in construction industry

Ho;   Arbitration and disputes resolution in construction industry does not require a professional experience.

Hi;    Arbitration and disputes resolution in construction industry require a professional experience.

 

 

SIGNIFICANCE OF THE STUDY

This research work on Arbitration and other alternative disputes resolution in construction industry will be very much important to the quantity surveyor role in the construction industry and to the student.

1. To the quantity surveyor role: for one to appreciate the role of quantity surveyor in the arbitrator practice in Nigeria building and civil engineering contracts, it would be necessary to first understand the professional skill required of him in the construction industry general.

To the student and general public: some of those who want to acquire knowledge of arbitration  and other alternative disputes resolution in the construction industry is equally