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Construction companies, like any other companies in the world, always have existing disputes. The construction industry even released a construction industry guide to dispute avoidance and resolution last October 1, 2009.
With Axis Capital Group which is a construction company based in Singapore and has branched out to Jakarta, Indonesia has followed the following methods in solving disputes:
1. Mediation: Mediation uses a third party mediator to resolve any disputes. The mediator helps both disputing parties to come to a mutual agreement. This process ensures that no attorneys become involved in the dispute and is less time-consuming. Make sure that you get a legit mediator and not a fraud one; one that can really listen to both parties and give unbiased judgment.
2. Minitrial: A minitrial takes more time and money than mediation. Unlike the mediator, a minitrial involves advisor or attorney that must be paid. The minitrial takes place in an informal setting. In the minitrial, the advisor or the legit third party would review the details of the conflict and bear only facts regarding the conflict. The disputing parties may come to an agreement or the third party advisor may offer their advice. The agreement is nonbinding and can be broken.
3. Arbitration: Arbitration is the most costly and time-consuming way to resolve a dispute. Each party is represented by an attorney while witnesses and evidence are presented. It is mostly done in disputes which are already on the grave misunderstanding and complaints and involves physical, moral and illegitimate issues. Once all information is provided on the issue, the arbitrator makes a ruling which provides the final decision. The arbitrator provides the final decision on what must be done and it is a binding agreement between each of the disputing parties.
The understanding of disputes in construction gained during the research led to conclusions. These may be summarized as follows:
• The industry must change. Conflict and litigation in the construction industry must be reduced by adopting a comprehensive and systematic approach to the prevention and resolution of disputes.
• The change requires three key steps. The process must start right to prevent problems from arising, it must stay right to prevent problems from escalating into disagreements and disputes, and it must provide for resolution to prevent disputes from crossing the “continental divide” and escalating into conflict and litigation.
• Project personnel must remain directly involved. Disputes are best resolved on-site with the project managers playing a major role. This insures that those directly involved in the dispute remain involved with the resolution. This helps in avoiding litigation and returns construction back to the engineer and construction professional.
• Owners hold the key to implementing the system. Owners hold the key to starting right, staying right and providing for resolution. This does not diminish the contractor’s role in dispute prevention and resolution. Implementing the system may, primarily, be the owner’s responsibility; successful operation is shared by owner and contractor.
