In the Middle East most disputes emanate from a failure to properly administer the contract that the parties entered into. There can be many causes of this. Three common causes are the contract administrator does not wish to award the contractor an extension to the time for completion when one is in fact due for fear that this may jeopardise its relationship with the employer. The contractor fails to comply with the relevant notice provisions in the contract. And, lastly, parties do not fully understand their respective design obligations.
Transport and social infrastructure are especially prone to dispute due to the nature and complexity of the works involved. The works often span great distances where there are varied and challenging land conditions. The land conditions in one area of the works can involve existing major underground utilities that require relocation. The land conditions may be such that the works are undertaken within the built environment where great care has to be taken because surrounding buildings are occupied and roads operational. These circumstances often cause delay and additional cost to contractors due to third party requirements.
Transport and social infrastructure projects often involve state of the art technology that is not procured from the country where the project is located. The shipping and installation of these materials is a cause of delay because of the procurement time and the international specialists required to install them not being familiar with the project country conditions.
Delays due to land conditions and procurement often prompt contractors to claim from employers. Then the cycle again begins with the contract not being administered properly which in turn causes disputes. There are of course many other causes of dispute but these could be said to be the most common.
Communication, a possible solutions
There is no panacea that resolves all disputes but quite often a very helpful remedy is clear, honest and effective communication. This communication should take many forms. The first is a clearly written contract where the obligations and rights of each party are easily discernable. The second is where the parties agree to communicate, be that written or orally, in a respectful courteous manner to avoid inflammatory language. And, lastly to openly and promptly communicate with one another to find an amicable solution when problems arise. Through effective and prompt communication the issues with contract administration can be greatly mitigated.
Dealing with the gap
Due to the fantastic and exciting construction industry in the Middle East where the projects are state of the art and pushing the boundaries of imagination it is inevitable that challenges will arise. The gap in the market is to practice effective dispute avoidance. This can be through the use of Arcadis professionals where effective communication is instilled into the project and or where there is an effective dispute resolution procedure in place that preserves the relationship of the parties to the contract.
The Middle East has some of the best construction litigation lawyers in the world. By having a litigation lawyer involved one may suggest that a dispute has already crystalised. Perhaps what is required is more properly trained dispute avoidance practitioners be that lawyers or construction professionals such as architects, engineers or surveyors. These practitioners can be involved at any stage of the project from drafting of the respective contracts or throughout the construction phase and beyond to assist the parties in avoiding painful and costly formal dispute resolution proceedings. As Benjamin Franklin said, “an ounce of prevention is worth a pound of cure”.