Introduction - Energy and infrastructure construction projects take time, are technically complex, are of significant value, and involve a spectrum of participants with different interests. It is inevitable that there will be claims and disputes arising out of these projects. The contractor will ask for more time, more money, or both. Whilst not all claims will become disputes, it would be a rare owner that accepted every claim.
So, acknowledging that claims and disputes are going to arise, what is the best procedure to try and resolve them without having to resort to formal litigation or arbitration proceedings?
Agreeing your dispute resolution provisions – invest time now, save time and money later
Naturally, disputes are the last thing on the parties’ minds as they work long and hard to negotiate and agree detailed contract provisions and to close the deal. However, a midnight-hour handshake on an agreement which includes boilerplate or unconsidered dispute resolution provisions is best avoided. Careful thought about the most suitable type of dispute resolution provisions at the outset will pay dividends on large-scale construction contracts. This is because the dispute provisions present the parties with a real opportunity to put in place alternative processes which will allow claims and disputes to be identified quickly, resolved efficiently and, above all, will allow the parties to maintain their focus on the real objective – the completion of the project.
A multitude of alternative dispute resolution processes can be used to try and resolve disputes in advance of formal proceedings.
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