an introduction to dispute resolution

21
AN INTRODUCTION TO DISPUTE RESOLUTION Dilan De  Silva  

Upload: dilan-de-silva

Post on 09-Apr-2018

221 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 1/21

AN INTRODUCTION TO DISPUTE

RESOLUTION

Dilan De  Silva  

Page 2: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 2/21

An Introduction to Dispute Resolution 

www.qsonline.info 

Table of  Contents 

How conflicts are come up: ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ 2 

How disputes are come up: ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ 3 

Dispute resolution mechanisms‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ 4 

Litigation‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐

Alternative dispute resolution methods (ADR)‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ 7 

Negotiation ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐10 

Conciliation ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐12 

Quasi conciliation ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐13 

Mediation ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐14 

Mini‐trial‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐15 

Arbitration ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐16 

Adjudication ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐18 

REFERENCE ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐19 

Page 3: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 3/21

An Introduction to Dispute Resolution 

www.qsonline.info 

How conflicts are come up 

Most of products are a combined effort of several peoples/organizations. Buildings/ Infrastructures are

unique products with more complex production process than other. So many professionals have

contribution to do a building in various capacities. Among construction team members, each may have

different objectives in relation to their profession, but their main objective should be to complete the

project within a given frame.

Conflicts between team members may arise when their objectives are incompatible. For an example

contractor has made a Rs. 1 million claim and the engineer has rejected it. The contactors objective is to

get Rs. 1 million for some losses he got, but engineer’s objective is to reject the Rs. 1 million claim

because, from his point of view the contactors hasn’t entitled to a such claim.

Then there is an incompatible between contractor’s and engineer’s objectives; in other word, there is a

conflict between the contractor and engineer.

Page 4: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 4/21

An Introduction to Dispute Resolution 

www.qsonline.info 

How disputes are come up 

What happen if either party become flexible and agreed to the other or both agreed to a middle point?

Then, there is no further conflict, because objectives of both party become same.

But if one or both party becomes intransigent, then the conflicts may turn to a dispute. In another word,

disputes are come up when parties are unable to manage their conflicts properly. Dispute can be defined as

a disagreement between parties in connection with their objectives.

In the example, if the engineer become flexible and agreed to pay Rs. 1 million to the contractor or both

agreed to Rs. 0.5 million, then there is no further conflict because their objectives become same.

But if one or both parties couldn’t become flexible, then the conflict become to a dispute. Construction

industry is with high probability to occur disputes, because of its complex production process. In

construction industry the incompatible objectives cause for disputes may be a claim, prolongation cost or

such right contractor believed he is entitle.

Then there should be some mechanisms in construction industry to solve disputes.

Page 5: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 5/21

An Introduction to Dispute Resolution 

www.qsonline.info 

Factors affecting for disputes: •  Personal objectives

•  Perceptions about roles (Themselves and others)

•  Discrepancies and errors in contract documents

•  Business relationship

•  Issues of principles

Dispute resolution mechanisms 

Well known traditional mechanism for dispute resolution is litigation, but it’s a more expensive and time

consuming method. Also when considering the special nature of construction contracts litigation may not

be the best method for dispute resolution, especially for the disputes with a technical matter as the subject

matter, because judges and lawyers are not experts in technical matters. But litigation may be the best

method, if the subject matter of the dispute is a point of law. Because of several drawbacks in litigation

peoples tried to develop new methods for dispute resolutions.

According to the John Murdoch & Will Hughes (1993 cited in Brown and Marriott, 2000, p.342), the

development of alternative dispute resolution (ADR) techniques has arises from dissatisfaction with and 

alienation from the legal system. Also Dora, I.I. (1986, p.3) has said that the delays and expenses inherent 

in the formalistic procedures and practices of overworked judicial systems the world over have stimulated 

renewed interest in those alternative methods of dispute settlement that mitigate if not eliminate the

drawbacks of litigation.

Page 6: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 6/21

An Introduction to Dispute Resolution 

www.qsonline.info 

However, Now the society have several well established several alternative dispute resolution (ADR)

techniques.

1)  Negotiation

2)  Conciliation

3)  Quasi conciliation

4)  Mediation

5)  Adjudication

6)  Mini-trial

7)  Arbitration

Other than above listed mechanisms there are some other mechanisms also available in society. For an

example, in Sri Lankan culture the “Village councils” was a forum for settlement of disputes.

We can categorise Negotiation, Conciliation, Quasi conciliation, Mediation, Private enquiry and Mini-trial

methods as non-adversarial dispute resolution methods, while litigation, Arbitration and Adjudication

labelled as an adversarial dispute resolution method.

Page 7: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 7/21

An Introduction to Dispute Resolution 

www.qsonline.info 

Litigation 

“Discourage litigation. Persuade your neighbours to compromise whenever you can. Point out to them

how the nominal winner is often a real loser in fees, expenses and waste of time” - by Abraham Lincoln

“Litigation is the use of the courts or lawsuits to settle issues”. (The Penguin Pocket English Dictionary.

2004)

In litigation, there is a plaintiff (one who brings the charge) and a defendant (one against whom the

charge is brought).

(i)   Advantage of  Litigation 1)  More suitable for the disputes, which the subject matter of dispute is a point of law.2)  Legal aid available.

(ii)  Disadvantage of  Litigation 1)  Open to public hence there is no privacy and confidentiality.

2)  Judges may not be experts in construction disputes.

3)  Decision is based on presented evidence, not address the underlying issues for the dispute.

4)  Parties to the dispute are outside the dispute solving process, whole process flow according to the

law and as lawyers and judges wishes.

5)  Financial disadvantage.

6)  Rigid method.

7)  Possibility of appeal.

Page 8: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 8/21

An Introduction to Dispute Resolution 

www.qsonline.info 

 Alternative dispute resolution methods (ADR) 

ADR can be identified as an informal dispute resolution method compare to court, which parties try to

solve their disputes with an assistant of a neutral third party.

According to the John Murdoch & Will Hughes (1993 cited in Brown and Marriott, 2000, p.342), ADR is

based on philosophy of empowering the disputants, putting them back in control of their own dispute. In

litigation the control of dispute resolution is out of the parties and mainly on the lawyer and judges.

(iii)   Advantage of   ADR 1)  Financial and emotional advantage.

Parties have to pay both neutral party’s fee (e.g.: Arbitrators) and Administrative expenses;

although, If the process short, there may be financial advantages. But, if the process is too lengthy,

it may be more expensive than litigation.

2)  Duration of dispute resolution process is less.

Time taken to solve a dispute through a litigation process may high when compare with ADR

methods. Especially in constructions projects, dispute resolution duration shall be short; because,

most of the construction projects are with shorter durations like one or two years. If the contractor

or the employer has to phase the project because of a dispute, it may not be favourable for bothparties. Always the conditions of contracts are avoiding the possibility to disrupt the construction

process by using ADR methods in the case of dispute.

For an example In FIDIC red book, sub clause 20.4 has stated “Within 84 days after receiving such

reference, or within such other period as may be proposed by the DAB and approved by both

Parties, the DAB shall give its decision, which shall be reasoned and shall state that it is given

under this Sub-Clause.  The decision shall be binding on both Parties, who shall promptly give

effect to it unless and until it shall be revised in an amicable settlement or an arbitral award as

described below”.

Page 9: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 9/21

An Introduction to Dispute Resolution 

www.qsonline.info 

3)  Chance to get a Win-Win solution

In some methods like mediation/negotiation the neutral party help disputants for agree to a middle

point. Hence it’s more cooperative than competitive.

4)  Ability to address the underlying issues for a dispute.

If the case referred to a court, the court will examine evidence and take a decision to comply with

statutory laws. Judges does not address the underlying issues. But in most of the ADR methods,

the third party may be examined any underlying issues relevant to the dispute.

5)  Party autonomy in dispute resolution process.

In most of the cases parties will select the third party. Also they can be decided the procedure.

Kanag  Isvran  (2007,  pp.54)  has  stated  that  “party   autonomy   is  the  guiding   principle  in determining  the   procedures  to  be   followed   in  an  international   commercial   arbitration”. Furthermore,

 

Leslie (2007,

 

pp.85) 

has 

stated 

the 

party 

autonomy 

as 

the 

cornerstone 

of  

the 

process of  arbitration. 

In some ADR methods parties may solve the dispute by agreement of the parties, not by a third

party.

6)  Flexibility.

Most of the ADR methods are not bound by specific rules; hence parties can customized the ADR

process according to their requirements. There are some institutions has introduced set of 

procedural rules for some ADR method like UNCITRAL (United Nations Commission on

International Trade Law) arbitration rules and UNCITRAAL conciliation rules. Also parties may

not be need to bound to any institutions procedural rules, they can be used their own customized

set of rules. According to the Hon. P de jersey (1999) flexibility nature is a great benefit of ADR.

But in litigation, the process is based on specific rules.

7)  Freedom to use professional knowledge to make decisions.

In arbitration, arbitrators can be used their professional knowledge and also they can seek 

professional advice from third parties to make a decision. But in litigation judges shall take

decision based on the evidence has presented.

8)  Appealable.

Arbitration is not subjected to appeal, but there are limited grounds which can suing the court for

setting aside and object for the enforcement of the award.

9)  Privacy and confidentiality.

Page 10: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 10/21

An Introduction to Dispute Resolution 

www.qsonline.info 

10)  In ADR methods parties can control the privacy and confidentiality but in litigation every things

are open to public.

(iv)  Disadvantage of   ADR 1)  May not be appropriate for disputes with a legal point as a subject matter.

2)  Decisions are not binding and enforceable. (Except arbitration).

3)  Lack of legal expertise.

4)  No precedent system.

5)  May not be a guaranteed resolution.

Page 11: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 11/21

Page 12: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 12/21

An Introduction to Dispute Resolution 

11 

www.qsonline.info 

Competitive style: - Also this style known as the Win-Loss strategy. This may suit for negotiations where

the collaborative style is inappropriate. This may adopt when the outcome of the negotiation is important

than the relationship between parties. This style may not cause for a good relationship between parties,

hence this may adopt when the parties do not wishes to future negotiation with the other party.

Collaborative: - Also this style known as win-win strategy. This may adopt when the relationship between

parties is important than the outcome of the negotiation. This style may strength the current relationship

between parties.

As we have described earlier, disputes are arise when one or both party becomes intransigent/   unable to

manage conflicts properly.

Negotiation can be used in conflict stage also. Hence negotiation is not only a dispute resolution method,

it also a conflict resolution method. 

When negotiation using as a conflict resolution method, the level of conflict between parties may reaches

to the peak. At the peak point negotiation may be useless and conflict become to a dispute.

Conflicts may reach to the peak when the communication brake down as a result of blame or increased in

tension.

There are some strategies/techniques using in negotiations to avoid the negotiation get failure like take out

from the emotional climate by doing a joke.

Page 13: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 13/21

An Introduction to Dispute Resolution 

12 

www.qsonline.info 

Conciliation 

The conciliation is a process of a neutral third party assist to disputants to establish a common ground.

Ultimate goal of the conciliator is an amicable settlement between the parties. Conciliators are impartial

and do not make decision or judgments. They talk to each party in privately and later bring both parties for

an open discussion which the conciliator chairs.

Confidentiality is an essential characteristic in Conciliators; conciliators do not reveal any things to other

party. Also if there any judicial precedents relevant to the dispute, conciliators should advice to parties

regarding that. He may explore potential solutions, provide technical assistant and improve

communication. Ultimately parties may reaches to an agreement by themselves.

According to the Dore, I.I. (? Cited in M. Domke, 1986, p.4) if conciliation ends successfully, with the

parties reaching a settlement as anticipated, the entire process is self-enforcing. In addition to Dore’s

opinion conciliation can consider as a non-appealable method when it ends successfully. Parties

agreement and process conducted privately and confidentially, because no need to publish settlements like

in litigation.

Page 14: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 14/21

An Introduction to Dispute Resolution 

13 

www.qsonline.info 

Quasi conciliation 

This is similar to conciliation but not exactly the same. In some cases one party to a disputes may seeks an

advice from a unilaterally appointed expert. In that type of cases the expert appointed party’s aim is not to

maximize the return from the claim like appointing a claim consultant but to take advice to overcomecontractual and technical difficulties.

The appointed expert may consult both parties, investigate the relevant documents and made

recommendations based on his finding to proceeds. Sometimes other party may also appoint an expert; if 

so then both may get together and compare findings and conclusions. In theoretically both should be

impartial.

Quasi conciliators’ decision will deliver to the client as a report. The report can be used as evidence in a

court action or as a negotiation instrument in a negotiation.

Page 15: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 15/21

An Introduction to Dispute Resolution 

14 

www.qsonline.info 

Mediation 

First phase of mediation is like the conciliation process but latter stage is different. In conciliation,

conciliator do not taken any decision or judgments and only facilitate to the disputant to reaches to an

agreement. But in mediation; first mediator facilitate to disputants to reaches to an agreement, if fails then

the mediator will make recommendations to settle based on his finding. The mediator’s recommendation

may indicate the outcome of arbitration. It may be a way to take the arbitrators decision with less expense.

It is up the parties to either accept the recommendation or reject and try another ADR method. Mediator

is flexible like conciliator but more interventionist than him. In both Mediation and Conciliation the

decision is usually only binding as contract, when it’s successful.

Page 16: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 16/21

An Introduction to Dispute Resolution 

15 

www.qsonline.info 

Mini-trial 

Representatives from disputed organization will conduct a trial in front of a panel comprising with senior

executives from disputed organization. Generally panel will comprise with three peoples, two are from

disputed organizations by one from each and the other is a neutral party. Panel members should have the

authority to reach and implement decisions, and should not have been involved to the dispute. After heard

the arguments and observed the evidences, the panel may be negotiated untilled they reaches to an

agreement.

Mainly there are two advantages in this method.

• Early involvement of high-level business persons to dispute

• Curtail much of discovery process and cost.

This method is best suit to large disputes like cases involving bench of contract, disputes with intricate

technical issues. Because in this method the panel is comprise with high level management from each

party and they are business experts in the field. Parties may initiate a mini-trial by negotiating a mini-

trial agreement.

Generally mini-trial agreement limits the exchange of document and number and length of depositions

(e.g.: 1 hour per deposition). Some mini-trial agreement limit the discovery time limit (e.g.: sixty days)

Page 17: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 17/21

An Introduction to Dispute Resolution 

16 

www.qsonline.info 

to get cost saving advantage, if not cost saving benefit may be defeated. Also parties should always try to

simplify the process for an effective result.

First phase of mini-trial is hearings, after the hearing negotiation will commence. Generally the neutral

third party will assist to other two in negotiations but he is not an active participant. In mini-trial

agreements there is a mandatory provision for a “Cool-down” period, which allocate time gap for

disputants to rethink and generate new settlement before going to litigation or other ADR method.

 Arbitration 

In arbitration, an arbitrator or arbitration panel conducts an information gathering process. In the process

they may review documents submitted by disputants, conducts hearings, take testimony of witness and

etc. Finally they make judgments which are binding on both parties. Further the arbitrators decision is

enforceable, but not self enforceable like in litigation. The process is clearly described in the procedural

rules. There should be a procedural rule which has agreed by both parties either before the dispute arise or

later. There are several procedural rules in the world which has published by several institutions like

International Chamber of Commerce (ICC) arbitration rules and

Dubai International Arbitration Centre (DIAC) arbitration rules.

The arbitration process should proceed according to the procedural rules and govern by the procedural

law. Generally procedural law will be the arbitration law governing the seat. But it’s not a mandatory,

Page 18: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 18/21

An Introduction to Dispute Resolution 

17 

www.qsonline.info 

because parties can choose a different procedural law. Procedural law will fill the voids in procedural

rules. Arbitration act No 11 in 1995 in Sri Lanka is one example for a procedural law.

Seat of the arbitration is the most important thing in arbitration because it is most important thing for

enforcement the award under New York convention. But seat may not be the place of arbitration. Parties

can decide the place to held hearings as they wish.

If parties proceed with assistance of an institute like DIAC or ICC it’s an institutional arbitration, and

otherwise it’s known as ad hoc arbitration.

Arbitration tribunal may be comprised with one/three or any other number of arbitrators as per parties

wishes, and appointing, challenging and replacement of arbitrators will be the same.

The arbitration award is binding on both parties. If either party fails to comply, the other can sue the court

for recognise and enforce the award. Also the loss party can sue the court for setting aside the award or

challenge the enforcement. But most of procedural laws have limited the appeal against the award.

Generally grounds for refusing a recognition and enforcement and setting aside of an award are

incapacity of party to enter in to arbitration agreement, violation of due process, tribunal exceeding the

authority, irregular composition of tribunal and irregular procedure, non-arbitral subject matter and

violation of public policy.

Also an arbitration award made in one state can enforce in other state when the both are convention states

for the New York Convention.

Also there is a role as “quasi- arbitrator”. Quasi-arbitrator is a person appointed by one party in

unilaterally, to solve disputes between parties. Some authors have argued that the engineer in FIDIC

conditions of contracts as a quasi-arbitrator.

Page 19: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 19/21

An Introduction to Dispute Resolution 

18 

www.qsonline.info 

 Adjudication 

Adjudication procedure is like arbitration, but it has some unique characteristics than the arbitration.

Because of that unique characteristics, most of the conditions of contract has mandatory requirement pre-

requisite before referring the dispute to litigation or arbitration. Dispute Adjudication Board (DAB) is the

mechanism for dispute adjudication in most of conditions of contacts. DAB may be comprised with

one/three or any other number of members as per parties wishes, and appointing, challenging and

replacement of arbitrators will be the same. Generally duration to take a decision is short than in

arbitration. For an example according to FIDIC 1999; DAB shall give its decision within 84 days after it

has received the request, and according to the DIAC arbitration rules the arbitral tribunal shall give its

decision within 6 month after it has received the request, and also it may extend by the tribunal.

Distinguished differences between arbitration and adjudication are;

•  Entire process will be private and there is no court interference like in arbitration.

•  Adjudication is not subject to any statute law.

•  The decision is binding upon both parties and shall give effect until it shall revise in amicable

settlement or an arbitral award or in litigation. But in arbitration after either party appeal against

the award there is no obliged to give effect by either party.

•  Adjudication hasn’t governed by international convention, hence adjudicator’s decision couldn’t

enforce in another state.

•  All members in adjudication board expected to be professionals with a technical background

unlike in arbitration.

•  DAB shall be visited the site regularly as states in DAB agreement, its special feature in

Adjudication than arbitration.

•  In Adjudication, DAB members can use their professional knowledge to solve dispute. But in

arbitration, arbitrators have to rely on evidence provided by parties.

•  Adjudicators can question the parties and dig out the truth, also while they are using their

professional knowledge they can seek third party assistant to make judgements.

Page 20: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 20/21

An Introduction to Dispute Resolution 

19 

www.qsonline.info 

REFERENCE 

* Amerasinghe. A.R.B., 2007.The Sri Lanka Arbitration act No: 11 of 1995-A Presentation. In K.

Kanag Isvaran, P.C. and S.S. Wijeratne, eds. Arbitration law in Sri Lanka. Colombo: The institute for

the development of commercial law and practice. Pp. 9-30.

* Brad Spangler. 2003. Alternative Dispute Resolution (ADR). Available:

http://www.beyondintractability.org/essay/adr/.Last accessed 20th October 2010.

* Cooley, J.W., 2003. Arbitration Advocacy.2nd ed. The United States of America: National Institute

for Trial Advocacy.

* De Silva, C.P., 2009.   Negotiation Techniques. Colombo: Institute for the Development of 

Commercial Law and Practice.

* Downs.L.J, 2008.   Negotiations Skills Training .The United States of America: The American

Society for Training and Development. 

* Dore, I.I., 1986. Arbitration and Conciliation under the Uncitral rules: A textual analysis. Boston:

Martinus Nijhoff Publishers.

* Dubai International Arbitration Centre.2007.   DIAC Arbitration rules. Available:http://www.diac.ae/idias/rules/  . Last accessed 24th October 2010. 

* FEDERATION INTERNATIONALE DES INGENIEURS CONSEILS, 1999. FIDIC Conditions of Contract . 4th 

ed: Switzerland.

* Jone, M. and Will. H., 2000. Construction Contracts Law and Management .3rd ed. London: Spon

Press. 

* Lisa J. D., 2008. Negotiation Skills Training. The United States of America: The American society

for training and development.

* Leslie,A., 2007.Arbitration-Party autonomy. In Kanag Isvaran, P.C. and S.S. Wijeratne, eds.  Arbitration

law in Sri Lanka. Colombo: The institute for the development of commercial law and practice.

Page 21: An Introduction to Dispute Resolution

8/8/2019 An Introduction to Dispute Resolution

http://slidepdf.com/reader/full/an-introduction-to-dispute-resolution 21/21

An Introduction to Dispute Resolution 

20 

www.qsonline.info 

* Onyema, E., 2008. Introduction to International Commercial Arbitration. London: Charted Institute

of Arbitrators.

* The Penguin Pocket English Dictionary. (2004).4th ed.Elgland: Merriam-Webster inc.

* Spencer, D., 2002. Essential Dispute Resolution. United Kingdom: Cavendish Publishing Limited. 

* ?. 2010. Conciliation. Available: http://en.wikipedia.org/wiki/Conciliation. Last accessed 24th

October 2010.