# Dispute Resolution in Construction — Reference

## Table of Contents
1. [ADR Spectrum](#adr-spectrum)
2. [Negotiation & Mediation](#mediation)
3. [Adjudication](#adjudication)
4. [DAB / DAAB (FIDIC)](#daab)
5. [Arbitration](#arbitration)
6. [Conflict Avoidance Board (CAB)](#cab)
7. [Key Cases](#cases)
8. [Enforcement](#enforcement)

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## ADR Spectrum {#adr-spectrum}

| Method | Binding? | Speed | Cost | Formality |
|--------|----------|-------|------|-----------|
| Negotiation | No | Fast | Lowest | Informal |
| Mediation | No (unless settled) | Fast | Low | Semi-formal |
| Conciliation | Non-binding recommendation | Medium | Low-Medium | Semi-formal |
| Conflict Avoidance Board | Parties decide | Ongoing | Medium | Structured |
| Adjudication (statutory) | Temporarily binding | Very fast (weeks) | Medium | Formal |
| DAB/DAAB | Binding (subject to NOD) | Medium | Medium-High | Formal |
| Arbitration | Final & binding | Slow | High | Formal |
| Litigation | Final & binding | Slowest | Highest | Most formal |

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## Negotiation & Mediation {#mediation}

### Mediation in Construction
- Facilitative process — mediator helps parties reach agreement, does not impose decision
- **Cheapest ADR mechanism** available (Gillion)
- Very high resolution rate at SMC (Singapore Mediation Centre)
- Typically completed in **1–2 days**: position paper → mediator → workshop → plenary
- Over 25 years of construction practice, **mediation is underused**
- Non-binding unless parties sign settlement agreement

### When Mediation Works Best
- Parties have ongoing relationship (want to preserve)
- Dispute is commercial rather than purely legal
- Both parties willing to compromise
- Confidentiality important
- Early in dispute lifecycle (before positions harden)

### When Mediation May Not Work
- One party acting in bad faith
- Significant power imbalance
- Pure legal question requiring binding precedent
- Party needs urgent interim relief

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## Adjudication {#adjudication}

### Statutory Adjudication (Singapore SOP Act)
- **Temporarily binding** — pay now, argue later
- Designed for **cash flow** protection, not final resolution
- Cannot be contracted out of (Section 36 SOP Act)

### Process
1. Payment claim served
2. Payment response due within 21 days
3. If dispute → adjudication application within 7 days
4. Adjudication response within 7 days
5. Adjudicator determines within 7–14 days
6. Payment within 7 days of determination

### Key Principles
- **Respondent's payment response is critical** — failure to respond = "smash and grab" (respondent cannot raise withholding reasons)
- Determination is temporarily binding — can be reopened in arbitration/litigation
- Adjudicator's jurisdiction is narrow — only the payment claim in dispute
- Multiple adjudications possible — fresh claims each payment cycle

### UK Adjudication (Housing Grants Act 1996)
- Similar concept — 28-day determination
- "Pay now, argue later" principle
- Right cannot be contracted out of
- Widely used in UK construction industry

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## DAB / DAAB (FIDIC) {#daab}

### Evolution
| Edition | Body | Type |
|---------|------|------|
| Pre-2017 | DAB (Dispute Adjudication Board) | Ad hoc or standing |
| 2017 | DAAB (Dispute Avoidance/Adjudication Board) | **Standing** (mandatory for Red/Yellow) |

### 2017 DAAB — Dual Role
1. **Avoidance**: Regular site visits, early engagement, informal opinions
2. **Adjudication**: Formal binding decisions on referred disputes

### Referral to DAAB
1. Either party refers dispute after Engineer's determination (or failure to determine)
2. DAAB has **84 days** to decide (extendable by agreement)
3. Decision is **binding** — immediate compliance required
4. NOD within **28 days** → dispute can proceed to arbitration
5. No NOD → decision becomes **final and binding**

### Non-Compliance
- 2017 clarification: non-compliance is a **separate dispute**
- Can be referred **directly to arbitration** — no need to go back to DAAB
- Can seek **partial award** for non-compliance while merits continue
- Persero case (Singapore) confirmed this approach

### DAAB vs SMC CAB

| Feature | FIDIC DAAB | SMC CAB |
|---------|-----------|---------|
| Primary role | Dispute resolution (reactive) | Dispute **avoidance** (proactive) |
| Mediation? | No (unless separately agreed) | **Yes** — strong emphasis (Rule 7) |
| Composition | 1 or 3 members | Default 1, flexible per issue |
| Decision timeframe | 84 days | No fixed timeframe |
| Site visits | Yes (standing DAAB) | Yes — predetermined agenda |
| Binding? | Yes (subject to NOD) | Parties decide per issue |

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## Arbitration {#arbitration}

### Key Features in Construction
- **Final and binding** — limited grounds for challenge (procedural irregularity, public policy)
- **Confidential** — unlike court proceedings
- **Party autonomy** — parties choose arbitrators, procedure, seat, language
- **Expert arbitrators** — can appoint construction specialists (unlike judges)
- **International enforcement** — New York Convention (1958)

### Common Arbitral Institutions for Construction
| Institution | Abbreviation | Base |
|-------------|-------------|------|
| Singapore International Arbitration Centre | SIAC | Singapore |
| Singapore Institute of Arbitrators | SIArb | Singapore |
| International Chamber of Commerce | ICC | Paris |
| London Court of International Arbitration | LCIA | London |
| Hong Kong International Arbitration Centre | HKIAC | Hong Kong |
| Kuala Lumpur Regional Centre for Arbitration | AIAC | Kuala Lumpur |

### Seat vs Venue
- **Seat** = legal jurisdiction governing the arbitration (procedural law)
- **Venue** = physical location of hearings (can differ from seat)
- Seat determines: court supervisory jurisdiction, enforcement regime, available challenges

### Singapore as Arbitration Seat
- International Arbitration Act (IAA) — based on UNCITRAL Model Law
- Minimal court intervention policy
- Strong enforcement track record
- Party to New York Convention
- Preferred seat for Asia-Pacific construction disputes

### Multi-Party / Multi-Contract Arbitration
- Common in construction (employer, contractor, subcontractors, consultants)
- **Joinder**: bringing additional parties into existing arbitration
- **Consolidation**: merging related arbitrations
- Requires: arbitration agreement permitting joinder/consolidation, or institutional rules allowing it
- SIAC Rules 2016: provisions for joinder and consolidation

### Interim Measures
- Arbitral tribunal can grant interim relief (preservation of evidence, security for costs, injunctions)
- Emergency arbitrator provisions available under most institutional rules
- Court may also grant interim measures in support of arbitration

---

## Conflict Avoidance Board (CAB) {#cab}

### SMC Integrated ADR Framework
- Standalone rules by Singapore Mediation Centre
- Can be **plugged into any contract** — not tied to specific standard form
- Combines dispute avoidance + mediation + determination

### Four Functions

| Function | Description | Binding? |
|----------|-------------|----------|
| 1. Dispute Avoidance | Regular site meetings, risk monitoring, cooperation | N/A |
| 2. Informal Assistance | Non-binding guidance on issues before they become disputes | Non-binding |
| 3. Mediation (Rule 7) | Formal mediation — position papers, mediator, plenary | N/A (facilitative) |
| 4. Opinion/Determination | Formal decision on referred disputes | Parties decide |

### Site Visit Agenda
- Progress summary
- Risk register update
- Claims/issues status
- Mitigation measures
- Completion dates review

### Advantages
- Proactive — prevents disputes from escalating
- Flexible — parties choose binding or non-binding per issue
- Cost-effective — cheaper than arbitration
- Includes mediation — built-in facilitative process

### Limitations
- Not widely adopted yet
- Requires parties willing to engage in good faith
- No established enforcement mechanism (unlike FIDIC DAAB)

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## Key Cases {#cases}

### Persero (Singapore)
- Indonesian construction project, arbitration seated in Singapore
- Issue: must non-compliance with DAB decision be re-referred to DAB before arbitration?
- **Held**: No — can go directly to arbitration
- Significance: clarified enforcement of DAB/DAAB decisions globally

### Henry Boot v Malmaison [1999] (UK)
- Concurrent delay case
- **Held**: Contractor entitled to EOT if employer delay event would have caused delay regardless of concurrent contractor delay
- Foundation of "Malmaison approach" to concurrent delay

### Walter Lilly v Mackay [2012] (UK)
- Global claims case
- **Held**: Global claims permissible where events and losses cannot be individually linked
- Must show: causal connection exists; no claimant-fault events included

### Costain v Bechtel — Channel Tunnel Rail Link (UK)
- NEC contract — Clause 10.1 (mutual trust and cooperation)
- **Held**: Clause 10.1 imposes obligation of honesty and proper conduct
- BUT does not override contract mechanism or create new rights
- Good faith = guiding behaviour, not source of claims

### Yam Seng v ITC [2013] (UK)
- First implied duty of good faith in relational/commercial contracts
- **Later limited** by Quantum Advisory — good faith only for very specific contract forms

### Peak Construction v Wilson Homes [2001] (UK)
- Prevention principle case
- **Held**: If no EOT mechanism for employer-caused delay → time at large → LDs unenforceable

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## Enforcement {#enforcement}

### Enforcing Arbitral Awards
- **New York Convention (1958)**: Awards enforceable in 170+ countries
- Limited grounds for refusal (Article V): procedural irregularity, lack of jurisdiction, public policy
- Singapore: enforcement under IAA Section 19 or Arbitration Act Section 46

### Enforcing Adjudication Determinations
- Singapore SOP Act: determination enforceable as a judgment debt
- If respondent fails to pay → claimant can apply for judgment
- Court will enforce unless adjudicator lacked jurisdiction or breach of natural justice

### Enforcing DAAB Decisions
- Binding immediately — must comply even if NOD issued
- Non-compliance → refer to arbitration for enforcement (partial award)
- No need to re-refer to DAAB (Persero)