Challenges faced by contractors on construction arbitration practice in Sri Lanka

Abstract

The construction industry has been accompanied by developments in disputes over the decades. Litigation is the conventional method used in determining such disputes of the construction industry. However, it has been developed various types of dispute resolution mechanisms substitute to litigation such as negotiation, mediation, conciliation, adjudication, and arbitration. Among them, arbitration is recognized as a prominent dispute resolution method by numerous experts. However, still parties to the disputes, especially the contractors, face many problems in arbitration process in Sri Lankan context. Hence, this research was aimed to investigate the challenges faced by the contractors while practising arbitration in Sri Lanka. In order to achieve the aim of this study, four contracting organizations were selected as the case studies while the interviews with their construction professionals were conducted to collect data. The collected data were further validated and extended by the interviews with construction arbitration experts. Finally, collected data were analysed using manual content analysis technique. According to the results of the study, arbitration can be recognised as a foremost dispute resolution method in Sri Lanka. However, there are various challenges faced by the contractors in practicing the arbitration as under five main categories as general, projectspecific, procedural, contractual and technical. To overcome these challenges, it has suggested to maintain proper documentation, limit the documentation required, appoint a talented arbitrator, make a procedure to check the information providing, build-up trust on arbitration award, introduce timeline for the arbitration, introduce information sharing system with tracking, legal powers to be a final decision, publish the final award, Arbitration Act to be updated, introduce guideline(s) to be followed, encourage early settlement of disputes through hybrid resolutions, mandate arbitrators to have separate Continuous Professional Development points, form a skill development centre, keep stakeholders informed about arbitration process and enhance actions of virtual hearings.