CPD for SLQS OMAN
Alternative Dispute Resolution (ADR)
Real Life Cases and Path to ‘Reasoned’
Decisions
Tilak Kolonne
BSc(QS)Hons, Dip(Arb), Dip(Adj)*, FRICS, FIQSSL, ACIArb
Chartered Quantity Surveyor, Arbitrator, Adjudicator
Tel: +94 777 957288
Email: [email protected]
2 April 2017
Contents
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Dispute
Commercial disputes
Dispute resolution
Litigation
Alternative Dispute Resolution (ADR)
Decisions
Engineer’s decision
Adjudicator’s/ DAB’s decision
Arbitral Award
Reasoned decisions & Unreasoned decisions
Legal reasoning
Real life cases
Dispute
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Conditions of Contract for Design, Build and operate projects
(Gold Book) First Edition 2008
Sub-Clause 1.1.3.1
“Dispute” means any situation where
(a) one Party makes a claim against the other Party;
(b) the other Party rejects the claim in whole or in part; and
(c) the first Party does not acquiesce,
provided however that a failure by the other Party to oppose or
respond to the claim, in whole or in part, may constitute a
rejection if, in the circumstances, the DAB or the arbitrator(s), as
the case may be, deem it reasonable for it to do so.
Is there a dispute?
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Crystallization of dispute ; whether or not there
is a dispute
Commercial disputes
Dispute Resolution
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Ways of achieving a solution in commercial
disputes (concerning contracts)
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Litigation
A judicial contest to determine and enforce
legal rights
Non Litigation (Alternative Dispute Resolution)
Alternative Dispute Resolution
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"Alternative Dispute Resolution" (ADR) is a
term generally used to refer to out-of-court
dispute resolution processes in which the
parties meet with a professional third party
who helps them resolve their dispute in a way
that is less formal and often more consensual
than is done in the courts
 Binding, non-binding, final
(Temporarily/permanent)
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The ‘Engineer’ as dispute resolver
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Engineer’s decision may be a prerequisite to
proceed to adjudication or arbitration
The QS may be asked to make the decision on
the Engineer’s behalf
Will the Employer and the Contractor be
comfortable with an Engineer’s decision
without reasons? (unreasoned decision)
Importance of knowledge on ‘legal reasoning’
to give a ‘reasoned decision’/ decision with
reasons
Adjudication
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Adjudication generally refers to processes of
decision making that involve a neutral third
party with the authority to determine a
resolution through some form of judgment/
decision
 A QS with required skills can act as
Adjudicator
 Construction Adjudication Awards/ Decisions
“We can’t avoid reasoning; we can only avoid
doing it well” - Peter Kreeft
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Arbitration
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Arbitration is a legal technique for the resolution of
disputes outside the courts, wherein the parties to a
dispute refer it to one or more persons (the "arbitrators",
or “arbitral tribunal"), by whose decision (the “award")
they agree to be bound.
A QS with required skills can act as an Arbitrator
Can the parties live with just the decision which is
unreasoned? Or the losing party had the need (if not the
right) to know the reasons why he had lost and the
winner (as might often happen) had the need to know
the amount awarded was less than he had claimed.
Reasoned decisions
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FIDIC 1999 (C)/ Red Book in Clause 20.4 (4th
para) calls for decisions with reasons;
“…the DAB shall give its decision which shall be
reasoned…”
 Arbitration Act No.11 of 1995 (Sri Lanka) calls
for reasoned award;
“The award shall state the reasons upon which it is
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based unless the parties have agreed that no reasons are
to be given…”
Reasoned Decisions
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Why reasoned decisions?
The parties are entitled to be told why they
have won or lost. Meek v City of Birmingham
District Council [1987].
To guide parties and others interested in their
future conduct
A reasoned decision should set out the facts
and legal reasoning on which the decision is
based.
Reasoned decisions
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It enables any subsequent proceedings to
review the decision and decide whether it is
subject to reversible error
It is a valuable intellectual discipline for the
decision maker
It should be borne in mind that what the parties
want is a reasoned decision, rather than a
legal dissertation
Unreasoned decisions
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Unreasoned decisions
Views that arbitral awards may be given
without reasons
The UNCITRAL Model Law provides (in Article
312) that:
“the award shall state the reasons upon which it is based
unless the parties have agreed that no reasons are to be given or
the award is an award on agreed terms under article 30”
Unreasoned decisions
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Can be the case with Adjudicator’s or
Engineer’s decision? less favorable!
Industry is used to see reasoned decisions
Legal reasoning
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All legal reasoning follows one path. No legal
argument can be accepted or rejected without
all of the following:
Issue – what specifically is being debated?
Rule/ law – what legal rule governs this issue?
Facts – what are the facts relevant to this rule?
Analysis – apply the rule to the facts.
Conclusion – having applied the rule to the facts,
what’s the outcome?
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Legal reasoning
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In the process of Engineer’s decision,
adjudication and arbitration basically a judicial
process is followed
Parties present their respective case
Parties lead evidence
The decision maker arrives at his decision
Legal reasoning would be applicable to the
necessary degree
Legal reasoning
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There are lots of facts that make up one’s
story. The decision maker looks for “material”
facts that fit the element of the rule.
Facts are statements that can be proven true.
Opinions are statements that reflects one’s
feelings or views, and they cannot be proved
true.
Legal reasoning
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There are so many rules that no one can know
them all.
An argument has no weight unless it says
exactly which rule is being relied upon.
In the analysis the decision maker sees that
the material facts fit the law.
Rule/ law can come from the governing law of
the contract and in construction works, from
the contract documents including Conditions of
Contract
Real Life cases
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Case 1
Please read Case 1 scenario given in a separate handout
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Issues
Is there an amendment to the contract for
transferring the design responsibility to the
Engineer?
Has the Contractor the right to change and
execute the Engineer’s Instruction?
Real Life cases
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Case 1
 Rule/ law
Parties to the contract only can amend the
contract (contract law/ privity of contract)
Clause 2.5 of the Conditions of Contract says
that the Contractor has the obligation to carry
out the EI
Real Life cases
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Case 1
 Facts
A meeting was held between the parties’
representatives and the Engineer and agreed
The Engineer issued an instruction under the
Contract and re-confirmed
Real Life cases
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Case 1
Other views of interest
Parties' representatives cannot amend the Contract!
Is it the Contractor’s duty to say the Engineer’s
design is not sufficient?
What if the structure collapses? who will be
responsible?
Feelings, sympathy on the parties
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Real Life cases
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Case 2
 Contractor’s claim for entitlement of extension of
time (in principle)
 Extensive submissions made by parties
 Submissions reveled parties were continuing
discussions/ correspondence
 Issues? rule/ law? facts?
 Preliminary issues/ objections
Important Note!
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As a decision maker, it is your duty to weigh and
to evaluate all the evidence received in the case and,
in that process, to decide the facts. It is also your
duty to apply the law to the facts as you find them,
whether you agree with the law or not. You must
decide the case solely on the evidence and the law
and must not be influenced by any personal likes
or dislikes, opinions, prejudices, or sympathy
Further reading…
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Carillion Construction Ltd v. Devonport [2005] EWCA
Civ 1358; [2006] BLR 15 (CA)
Thermal Energy Construction Ltd v AE & E Lentjes UK
Ltd [2009] EWHC 408 (TCC)
Pickavance, James. A Practical Guide To Construction
Adjudication
Turner, Ray. Arbitration Awards. Oxford, UK: Blackwell
Pub, 2005
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Thank you