n Civil Engineering = Siviele Ingenieurswese - Alternative Dispute Resolution in engineering contracts : legal

Volume 21, Issue 7
  • ISSN : 1021-2000



Alternative Dispute Resolution (ADR) is a collective term commonly referring to the resolution of disputes outside of the litigation process of our courts. As an extrajudicial process it usually refers to mediation, adjudication and arbitration. ADR is extensively used in engineering contracts to resolve disputes that arise out of the contract. However, factors that influence the decision as to which of the ADR processes to utilise are: the type and nature of the dispute, enforcement of the outcome and whether there is a further option to finalise the dispute, and the costs of the chosen ADR process.

In most cases the ADR process is stipulated in the contract, and the parties to the contract are obliged to follow the agreed process. In some contracts the contract-specific process provides an alternative for the declarer of the dispute to choose from. Certain purely legal disputes cannot be properly dealt with by way of mediation and adjudication, and it falls to arbitration to deal with such issues. A technical or expert opinion or decision, necessary for the execution of the contract, given by an engineer or architect, as the case may be which is disputed by the contractor, is not a dispute for resolution by an ADR process. A payment certificate, interim or final, issued by a properly appointed engineer, is a liquid document and is not a dispute for an ADR process. What may be in dispute is a claim sounding in money where the contractor is of the opinion that the payment certificate is undervalued (a contractor never complains if it is overvalued).
Of further importance in any ADR process is the choice of presiding officer by the parties. The parties enjoy mutual autonomy and by mutual agreement can make such an appointment. The dispute may be overly technical and/or overly legal, and in making the choice of the presiding officer, these facts should be taken into account.

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