Critical analysis of arbitration method used in the construction industry in sri lanka

Abstract

Disagreement among contracting parties has a rich tradition in the construction industry, which induces of creating and experimenting with alternatives to litigation. Alternative Dispute Resolution (ADR) methods such as adjudication, mediation, negotiation and arbitration, in construction industry have gained numerous positive impacts during the recent years in Sri Lanka. Construction disputes become more technical intensive, multifaceted and multinational interested than other commercial disputes; construction disputes need the enforceable and flexible Alternative Dispute Resolution (ADR) such as Arbitration to resolve disputes efficiently. Arbitration is seen as the final mode of Alternative Dispute Resolution with enforcement mechanism. The Arbitration Act of Sri Lanka No. 11 of 1995 provides for a legislative framework for the effective conduct of arbitration’s procedure. However, the use of the Arbitration in the private and public sectors has not been efficiently apparent, probably due to several practical constraints. This paper discusses successful critical attributes behind Arbitration in construction industry and reports on an evaluative study on how effectively these critical success factors are being fulfilled. Further adverse practical customs also were identified and grouped under the critical attributes as causative of the ineffectiveness of particular attributes. Opinions of the key players of the construction industry also have been included as recommendation and suggestion of the identified problems by the research. This is the first endeavor for evaluator studies after two decades enacting the Arbitration Law no 11, 1995. Further, this research is the threshold to collect professional perception and the feedback about the performance of the Arbitration in construction industry of Sri Lanka. These findings try to indicate the precise problematic area in the Arbitration.