Mauritian statutory adjudication in the construction industry
“‘Then you should say what you mean’, the March Hare went on.
‘I do,’ Alice hastily replied; ‘at least – at least I mean what I say – that’s the same thing, you know’.”1
14.1 Mauritius is in the process of enacting legislation to provide statutory adjudication in the construction industry, in order to facilitate the speedy resolution of construction disputes in order to seek to eliminate financial problems that currently adversely beset the construction industry.2 This is therefore very much a holding chapter and, until the local statute [Appendix 17] comes into effect, the current means of resolving disputes, absent negotiated agreement, is probably arbitration, or litigation, in which the time taken for determination can adversely affect the party asserting that it is owed money. That can even result in a company becoming insolvent due to being denied payment of moneys genuinely owed to it. That is not acceptable in an ordered society. Introduction of such a statute is made against the remarkably successful statutory adjudication provisions in the UK, which have subsequently been repeated in Hong Kong, Singapore, New Zealand and Australia.
14.2 Disputes are necessary for the development of an ordered society. Disputes of a minor nature affect us all in our everyday life and we become experienced in dealing with them as we personally develop our business skills. There are many different ways of resolving disputes, some more acceptable socially, than others. Disputes in our business life are generally wasteful of resources and disruptive of our trading ambitions; disputes can often damage relationships with trading partners and clients, sometimes fatally. The important thing is that we learn and we adapt to the particular needs that arise in avoidance of disputes and their management, if and when they occur.
14.3 Dispute avoidance must start with dispute risk identification and management at the conceptual stage in the formation of contracts. Dispute avoidance is founded in policy decisions made at the contract drafting stage. Money spent on lawyers and advisers at the initial creation of a contract is money better spent and is less expensive, than when disputes arise later. Identification and expression of where the contractual risk lies in a project and how it will be managed will reduce risk and may avoid delay, punitive costs and the inevitable loss of management time spent upon disputes, which time is then not available to fulfill the essential management of normal trading. As a result, further losses may arise through the diversion of management attention away from the project as it proceeds. The costs of management time are rarely recoverable through dispute resolution.
14.4 Canary Wharf (a mega London development) made provision for adjudication, by naming adjudicators within all of its contracts. The mere presence of a named adjudicator, within the contract, to whom any party could refer a dispute at any time, historically acted as an incentive to party-to-party resolution of differences of opinion, which were inevitable in projects of that size and complexity. As a result, only significantly complicated issues came to adjudication, benefitting from the prior rehearsal of the dispute as between the parties and the short, sharp, focused consideration by an experienced adjudicator.
14.5 On even more complicated contracts, such as PFI hospitals, it has become UK best practice to appoint a panel of neutrals and experts to a standing dispute board, chaired by an arbitrator who would, on first notice of a dispute, identify the specialism necessary and appoint a panel comprising a neutral chair and one, or two, experts in the subject-matter of the dispute. The pool of experts would include people with construction, legal, mechanical, electrical, mechanical, radiography, engineering, clinical and medical expertise. Dispute review boards or dispute advice boards are still not yet sufficiently common in the UK, but are used worldwide for major contracts.
14.6 There is no dispute resolution process that is universally appropriate for all disputes. Disputes should, instead, be structured and managed such that the dispute resolution process is tailored to suit the particular needs of the parties and the nature of the dispute itself. (“horses for courses”). Best practice may generally be viewed as a multi-stepped structured process, ranging from party negotiation at senior board level, early non-binding expert evaluation, mediation, statutory adjudication (where available) then arbitration (a multi-tiered process).