Civil Engineering Project Management (4th Edition)
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17.16 Arbitration<br />
Under the ICE conditions, Clause 66, either the employer or contractor can<br />
serve a Notice of Dissatisfaction on the engineer stating the nature of the matter<br />
objected to. The engineer has to give his decision on this matter within one<br />
month and, if either party is dissatisfied with it, they can issue a Notice of<br />
Dispute. The purpose of this procedure is to eliminate matters which can be<br />
resolved early by the engineer and to define any remaining dispute. A dispute<br />
thus established can be resolved by ADR, adjudication, or arbitration.<br />
Although arbitration may seem a reasonable way of finally settling a dispute,<br />
it has disadvantages. It may take months to find an arbitrator both parties can<br />
agree to and who is willing and able to act. Both parties may decide to employ<br />
a lawyer to present their case because the dispute involves interpretation of the<br />
terms of the contract. Also one party may need to employ the engineer to act as<br />
witness, because the dispute also relates to the facts of the case, which lie in<br />
records kept by the engineer. If the employer is disputing the engineer’s decision,<br />
this puts him and the engineer in a difficult position because the contractor<br />
may wish to employ the engineer as his witness, but the engineer may<br />
still be acting as engineer under the contract for ongoing work, and he can<br />
sometimes be an employee of the employer.<br />
The lawyers who present the case for each disputant, although chosen for<br />
their experience of building contract disputes, may still fail to understand or<br />
make use of significant technical data having a bearing on the dispute. They<br />
may raise issues not previously in dispute, and use legal arguments concerning<br />
the contract, which the disputants feel are not relevant to the real matters of concern.<br />
Hence the outcome of an arbitration is uncertain and can be different from<br />
what either of the parties expected.<br />
17.17 Minimizing claims and disputes<br />
Variations and claims 223<br />
The key precautions which can be taken to minimize claims and disputes are:<br />
(a) adequate site investigations;<br />
(b) checking that the works designed satisfy the employer’s needs and make<br />
reasonable provision for his possible future requirements;<br />
(c) completing all design drawings, specifications, and arrangements for incorporation<br />
of equipment purchased separately, before tenders for construction<br />
are sought.<br />
Under (b) the aim is to minimize changes during construction. Some may be<br />
unavoidable if the employer needs alterations due to some new regulation<br />
applying, or if his needs change due to something outside his control. But<br />
often his possible (but uncertain) changes of need can be catered for cheaply by