Master of Science in Construction Law and Dispute Resolution

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Browsing Master of Science in Construction Law and Dispute Resolution by Faculty "Engineering"

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    Developments to be brought into condition precedent notice provision in contractor's claim clause for betterment of the contractor: contractor's perspective
    Karunathilake, TAK; Seneviratne, I
    There is now a growing propensity to apply the “condition precedent” notice provision to the contractor’s claim clause in standard forms of contracts throughout the world. Accordingly, valid and meritorious claims of the contractors are forfeited if the contractor cannot comply with the time bar notice provision. The main intent ofthis notification is to alert the employer or the engineer at an early stage about the events that will take root to incur additional time and/or cost to the project and allow them to manage relevant consequences in fact. In that sense, it is questionable how the contractor can be deprived of his right to receive additional payment and/or time for a real claim situation, only because ofthe lack oftimely notification. On the contrary, notification of the employer's claim is required to give as soon as possible after the employer became aware ofthe event giving rise to the claim. Therefore, the time bar notice provision in contractor’s claim clause is now argued critically both in the construction industry as well as in the judiciary worldwide. Therefore, this document examines the importance of claim notification with respect to the opinion of contractors and the causes of non-compliance with the notification provision. To understand the perception of contractors in the industry, a survey of questionnaires and unstructured interviews was conducted. Therefore, several additional reasons were identified for the lack of claim notices despite the reasons available in the literature. Further, this paper examines challenges to condition precedent notice provision in contractor’s claim clause and proposes suitable developments to the same for the betterment ofthe contractor by addressing identified shortfalls in the contractor’s claim clause. According to the collected data and analysis procedures employed, the most affected challenges to contractor’s claim clause were: “Unjust enrichment”, “Conflicts with Prevention Principal”, “Defense for claims”, “Doctrine of Penalty”, “Unlawful exercise of rights” and “Loosing good faith obligation”. It is important to address those challenges when developing the contractor’s claim clause.
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    Dispute avoidance of delay claims by improving delay notification process of contractors in sri lanka
    Goonawardana, PJA; Perera, BAKS
    Most of the delay claims submitted by Sri Lankan Contractors were either rejected or under certified purely due to contractor’s inefficiency of supportive documents mainly delay notices. Due to this lack of notices to prove the entitlement, contractors lose their power to bargain. Hence, generally lose their genuine entitlement for an extension of time for the actual delays as well as lose the entitlement for reimbursement of actual costs incurred by the contractors as a result of project delay. Hence, it is important to identify the reasons for this shortfall and to propose method to overcome this situation of Sri Lankan contractors. This study is aiming to identify most practical and useful delay notification process for Sri Lankan contractors in order to strengthen their contractual entitlement for compensation in the event of excused and compensable delay events. This study was carried out through a literature survey, questionnaire survey and interviews among the experts in the industry. The collected data was analyzed using percentages on frequencies, relative importance index and mean ratings. This study revealed that 71% of Sri Lankan construction projects which were completed during last 10 years were impacted with delays. Despite the scale of the project, delay has mainly impacted on all scales without much variance. In 94% of the delayed projects, contractors have successfully requested for an extension of time but only 83% of them were managed to serve notices. However, in most of the situations notices are served beyond the time bar and in some instances notices are not properly linked to the events. Due to this circumstance only 79% of the delay projects were granted extension of time but 50% of the instances the extension of time was not granted within the stipulated time period of 42 days. Due to these lags and failures around 41% of the delayed projects faced with disputes. Majority of the contractors believe that they hurt consultants or clients when notify delays and further they feel that they will be penalized by the consultants with other approvals if they notify any delays. Hence, most contractors prevent from notifying delays which then leads to disqualification of delay claims due to lack of notices which then leads to disputes. Most of the respondents recommended identification of the event and identification of the delay due to that event as important factors prior to the notification. Based on the type of change and notice provisions under FIDIC 1999 edition, a notification model is proposed to facilitate notification process. Further, Changes to notice provision in FIDIC 1999 and to educate construction industry stakeholders on notices are also recommended.
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    Disputes and resolution mechanism of public-private partnership projects in Sri Lankan construction industry
    Heenkenda, HMNSB; Sandanayake, Y
    Sri Lanka is a developing country, which is experiencing of acceleration in the construction development at present, after 30 years of civil war. Construction industry is the fourth largest economic sector, which contributes in an important level to the country’s GDP. Nowadays Sri Lankan construction firms are on a trying to expand the business with new concepts of Public private partnership investment for government projects. But when consider about conflicts, claims and disputes within the projects, the occurrence is very frequent and the value of conflictive claims is higher when compared to the countries. Most of those destructive conflicts cause to inefficiency and losses to the final project in all the three terms of cost, quality and time. This directly effects to the enhancement of the construction sector. Many of those conflicts generate within the groups of construction parties. A Conflict can be solved at two particular stages of an ongoing project, either before arise the conflict by proper planning or through pre-designed mitigation means or after the arrival, through proper dispute resolution mechanism. This research used expert interview to identify the common conflictive and dispute situations arose in Public Private Partnership Construction project and suggestions were made to mechanisms for dispute resolution. Expert interview has been carried out by using different organization entities from government, private and public population to gather fair thoughts from all main parties. Semi-structured interviews were conducted with the respective expert such as Project managers, Engineers, QSs, Investors and clients, whom involved with PPP projects. Base on the research findings, suggestions were decide to most practical dispute resolution mechanisms, such as recommendation of observed expert opining as separate mechanism or supportive mechanism or combined mechanism. It is expected that the findings will be useful for all professionals who lead PPP construction project, which are situated in Sri Lanka.
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    Disputes between contractors and subcontractors in Sri Lankan construction industry
    Nissanka, NMNWK; Sandanayake, Y
    The construction industry includes profusion of Subcontractors employed in various projects. Moreover, a higher number of subcontractors have begun entering into the industry due to ease of entry. However, all subcontractors might not possess the required proficiency to fulfil client’s necessities. Thus, various issues have aroused due to lack of proper subcontracting practices creating management of subcontractors in construction industry in Sri Lanka essential. The study incorporated interviews and questionnaire survey to derive at the aim of this research which was to identifying the caused for disputes in subcontracts in the construction industry in Sri Lanka and propose mitigation measures. Besides, to understand the practice of subcontracting in construction industry and caused for possible disputes, a literature synthesis followed by questionnaire survey and structured interviews were executed. Similarly, literature synthesis assisted to identify causes for disputes in subcontracts. Furthermore, preliminary investigation aided in validating the findings of the literature synthesis while more issues and solutions were added by the interviewees. Consequently issues and solutions were ranked through the questionnaire survey to identify the most critical issue. Subsequently the mitigation measures were proposed to overcome the disputes in subcontracts with the aid of the findings of literature synthesis, interview and questionnaire survey. Payment problems, coordination problems, lack of communication, quality issues, scheduling conflicts, no form of subcontract prepared for Sri Lankan usage; no compulsory subcontractor registration procedure; no practice of security of payment in Sri Lanka are major issues. Mitigation measures were suggested o overcome disputes in subcontracts by addressing the causes for disputes.
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    Effectiveness of negotiation as a method of alternative dispute resolution in Sri Lankan construction industry
    Amaradiwakara, SPW; Karunasena, G
    Disputes are a critical problem in the construction industry and an effective alternative dispute resolution (ADR) method is a crucial requirement. Studies on ADR practices in Sri Lanka denote that negotiation is the preferred and initial ADR method over other methods. However many disputes go beyond negotiations and recent research at international context identifies negotiation failures as a common scenario. This study aims to determine the effectiveness of negotiation as an ADR method in Sri Lankan construction industry. Seven outcome taxonomies of construction dispute negotiations comprising three effective outcomes and four ineffective outcomes were identified via comprehensive literature review. Based on the findings a framework was developed to determine the effectiveness of negotiation. A questionnaire survey was carried out among senior professionals who had direct exposure to disputes in the Sri Lankan construction industry and their responses were analysed to arrive at findings. The findings indicate that negotiation is an effective ADR method because effective outcomes such as conflict reduction and maintenance of relationship could be achieved. Hence Negotiation could be recommended as the best initial ADR method to be attempted. However, the possibility of achieving the most desired outcome, problem solving is not satisfactory. Attitudes of parties, lack of negotiation skills among industry professionals, cultural differences among parties, lack of participation of competent professionals, use of negotiation as a time passing tactic and professional discrimination were found out as the major barriers to achieve problem solving outcome. Several areas shall be developed to overcome the effect of such barriers and obtain maximum effective outcomes from negotiations. The results of the study enable researchers and practitioners to gain deep understanding on the current negotiation practices and suggestions to overcome the barriers to achieve effective negotiation outcome.
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    Empherical investigation on professional negligence of construction professionals
    (2022) Shakthi AGBT; Hadiwattge C
    The construction industry is complex and involves several activities. The construction industry and projects are linked with time, cost, and quality constraints to ensure project performance. Although the application of complexity science to the construction sector has not received much attention for professional negligence, there is evidence that the construction process might be viewed as a complex system in and of itself. Therefore, the complexity and scale of the construction projects often leads to professional negligence. This research aims to investigate the impact of professional negligence on construction project performance while developing a framework to overcome professional negligence in the construction industry. The research utilises a mixed research approach with five expert interviewees and 249 questionnaire survey respondents obtained in the Sri Lankan context. Both the Relative Important Index (RII) and content analysis was used for the quantitative and qualitative data analysis respectively. Findings reveal that poor design with negligent supervision is the highest possible reason, while carelessness and insufficient information on documents are the second highest possible reasons for professional negligence. Furthermore, the findings reveal that four interviewees have accepted that there is a significant impact of professional negligence on project performance, while one interviewee stated that there is no such impact. A model was developed using the findings of the research, including strategical mitigation approaches for the avoidance of professional negligence, and increasing project performance in the Sri Lankan construction industry. The study recommends industry experience, minimising additional claims, zero accidents, avoiding negligence, and quality of deliverables to support the professionals in the construction industry to increase the project performance. Developing connectivity among pre- and post-contract teams, obtaining professionals with relevant educational qualifications, and use of effective communication channels are proposals for the development of project performance while minimising professional negligence. Research into a legal framework to address pre- contract and post- contract dispute resolutions, possible strategies to overcome professional negligence in the Sri Lankan context need more insight. Findings from the study can be used by construction professionals to better understand how professional negligence impacts the construction industry.
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    Establishment of the most common ground on which local arbitral awards become unenforceable in Sri Lanka
    Hemantha, MD; Senevirathne, I
    The parties select more adversarial arbitration process over other alternative dispute resolution methods mainly due to the enforceability of the arbitral award. If the arbitral award becomes unenforceable due to any reason, the selection of arbitral process is useless. In this scenario, in the absence of a comprehensive research in the arena, this research was conducted to investigate the status of enforcement of arbitral awards in Sri Lanka, specially to find out the most common ground on which local arbitral awards become unenforceable in Sri Lanka and to explore the reasons to occur the unenforceability under that most common ground with the expectation that this improved knowledge would assist to minimize the unenforceability of local arbitral awards. The research was conducted under the quantitative paradigm. A cross-sectional, retrospective and non-experimental study design was adopted. The arbitration cases registered at the High Court during 2009-2012 for the setting aside or for the enforcement of the awards and where the arbitral process conducted under the purview of Arbitration Act 1995 and the courts completed their proceedings were selected for the sample. The data collection process was a two tiered process. In the first tier a cross sectional survey was carried out at the High Court-Colombo to find out arbitral awards become unenforceable due to setting aside or refusal to enforce by the High Court. If the judgment of the High Court was appealed to the Supreme Court the judgment of the Supreme Court was also considered. Through the first tier of data collection, it was found that non adherence to the enforcement procedure is the most common ground on which local arbitral awards become unenforceable in Sri Lanka. During the second tier of data collection, semi structured interviews were conducted with parties who failed to enforce the arbitral award due to non adherence to enforcement procedure. Through the interviews it was found that performance defects of the legal counsel or of the officer in charge of the case are the main reasons for the unenforceability of arbitral awards under the most common ground. This is an avoidable circumstances with due diligence. The award creditors should be more vigilant of their right to enforce the award which obtained through a hard and expensive process. Therefore it is recommended to establish proper monitoring and reporting systems within the organizations involving with arbitral process to minimize arbitral awards becoming unenforceable.
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    Handling negotiation deadlocks in Sri Lankan construction industry
    Kariayawasam, GSK; Gunathilake, S
    Negotiation is identified as first to be used among alternative dispute resolution mechanisms to resolve construction disputes. Further negotiation is identified as most preferred by construction parties. However, it is found parties continuously fail in achieving settlement through negotiation. In every negotiation deadlocks occur where both parties stand still on their stance which stuck negotiations from moving forward. Deadlocks are inevitable but can handle effectively. Existing knowledge identified several techniques used worldwide in handling negotiation deadlocks. This research is targeted to find the applicability of identified negotiation deadlock handling techniques in the Sri Lankan construction industry. A questionnaire survey was carried out among fifty (50) experts in the construction industry. Questionnaire was based on thirty-three (33) identified deadlock handling techniques and respondents were asked to mark their responses on a Likert scale which contained five options. Feedback of the survey was analysed using Relative Importance Index (RII) and found that all the identified techniques are applicable to the Sri Lankan construction industry and found that the industry well recognized them. Further, producing additional information to negotiation table is the key deadlocks handling mechanism using rate negotiation in variation management in construction projects.
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    Negotiation styles of Sri Lankan project managers in dealing with client and consultant organizations
    Piyasiri, UN; Gunathilake, S
    The nature of construction industry contributes to the germination and manifestation of construction disputes. Negotiation is often the first attempt in getting dispute resolved. Inefficient negotiation discourages early settlement and contracting environment becomes adversarial, thus rendering the use of expensive arbitration or litigation. One of the reasons for such inefficiency is due to the lack of understanding of the styles adopted during their own negotiation processes. This study aims at identifying mostly used negotiation styles by Sri Lankan project managers during construction stage of projects. Changes of relative usages of negotiation styles when dealing with Client and Consultant organisations were also studied. Rahim Organisational Conflict Inventory – II was used to measure the negotiation styles of project managers. Statistical analysis techniques were used to identify significantly changed negotiation styles. The study revealed that Integrating style is the most preferred negotiation style when dealing with both Client and Consultant organizations by the Sri Lankan project managers during the construction stage of projects. The usage of Obliging style by project managers showed a statistically significant reduction when dealing with Client than Consultant organizations, while the Integrating style showed a substantial increase though it was not statistically significant at 5% significance level. Client and Consultant organisations were suggested to use Integrating negotiation style when entering to negotiation since there is a high possibility to resolve conflict through negotiation when both parties use Integrating style.
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    A Study on delays in building industry in Sri Lanka from professional perspective
    (2019) Pramuka WADN; Devapriya KAK
    The author has selected this research to study about the delays in Sri Lankan building construction projects to identify significant causes of delay and its magnitudes, responsible parties for the delays, their adverse effects and its magnitudes on project completion and performances. Also, the research aimed to study the magnitude of remedies to minimize or avoid possible delays in building construction projects. The research study achieved the Aim of the research by establishing the five numbers of interrelating linked objectives established at the beginning of the study. There are forty-four leading causes of delay divided into four groups according to the party responsible for such delays as; the contractor, the client, the consultant, and the government and external. The research methodology adopted both a questionnaire survey and interviews, to collect the primary data to find the magnitude of causes of delays and effects from the outcomes of the data analysis according to that, twenty number of significant causes identified in this research study ( Refer Table 18 & A9-4&5 under Appendix 9). Thus, this research study recognized eight number of significant effects magnitude due to the identified of causes of delays such as time overrun, cost overrun, disputes, arbitration, idling of resources, litigation, negative social impact and total abundant. Also, the results confirmed that both the clients and the contractor are equally responsible for delays in Sri Lankan building construction projects. Finally, this research study recommends fifteen remedies and its magnitude to minimize/mitigate potential delays in building construction projects in Sri Lanka described in the study. The outcomes of the research identify highest magnitude three significant remedies to avoid or minimize delays such as; the client shall pay the contractor on-time, the contractor shall improve labor productivity, and he shall have proper financial planning and proper management with planning to be improved.