REUTERS | Steve Crisp

Mediation, DABs and ADR in the Middle East (part two)

Taking up the challenge: the role of mediation, DABs and other ADR methods in the Middle East

Mediation and DABs

Last week, I looked at mediation and dispute adjudication boards (DABs) in the Middle East. This week, I will continue my thoughts by looking at other possible methods of alternative dispute resolution (ADR), before considering what may be next for ADR in the region.

Other methods of ADR

There are alternatives to mediation and DABs, which have been successfully used in the Middle East region and which can deliver advantages to parties, particularly in relation to time and cost. These alternatives include:

  • Amicable settlement: Construction contracts in the Middle East regularly include a period of amicable settlement in which parties are obliged to negotiate and attempt to settle the dispute. Amicable settlement is flexible; it can be informal or structured, discussed at site level between project managers or elevated to senior management as appropriate. The attitude of the parties and their appetite for settlement is the driving factor in the success of this form of ADR.
  • Expert determination: The appointment of an expert in the field of the dispute to act as a neutral third party. The expert will examine the facts of the dispute and, if previously agreed between the parties, the expert’s decision can be final and binding. This method is particularly useful where a technical or specialist dispute exists during the build. 

Where next for dispute resolution in the Middle East?

Alternative forms of dispute resolution are still relatively uncommon in the Middle East. There are indications in the construction market that alternatives to lengthy arbitrations and court-based litigation are being considered. For example:

  • In Qatar in 2014, the Qatar International Court and Dispute Resolution Centre launched Q-Construct; a scheme designed to introduce adjudication as a means of dispute resolution in Qatar. Unfortunately, this scheme is no longer being pursued, due to delays with the passing of the necessary underlying legislation to recognise and enforce the scheme. Regardless, it is encouraging that such schemes are being considered and put forward in the market.
  • At a recent forum on major projects and infrastructure in Qatar, RICS discussed the use of their conflict avoidance panels (CAP), in the region. Similar to a DAB, a CAP permits RICS to facilitate the appointment of an impartial panel with expertise relevant to the particular project. The CAP mechanism has been written into a number of contracts of large infrastructure projects in London and RICS advised that a number of project clients and delivery teams have expressed interest in the use of CAP in the Middle East.  Such discussions indicate a potential shift in the market regarding the use of this type of ADR; only time will tell whether such mechanisms are properly utilised going forward.

Comprehensive and workable dispute resolution provisions that avoid arbitration and litigation will assist parties in reducing the time and costs required to effectively resolve disputes. When negotiating contracts, parties should take example from the success of ADR in England and Wales and give greater consideration to other forms of dispute resolution.

Pinsent Masons LLP Helen Turner

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