The Literature Review – Part Two
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3.0 Key threats to the uptake of mediation
3.1 Adjudication
In Agapiou and Clark’s (2011) research, a select group of Scottish Legal advisors forecast a limited role for mediation in construction disputes due to the prevalence of statutory adjudication. Agapiou and Clark argue that this is mainly because Scotland has an insufficient institutional framework to support construction mediation. Unlike in the UK and other jurisdictions, statutory adjudication is not enshrined in Ugandan law. Otherwise, adjudication would cut through any multi-tiered ADR procedure, as Pickavance (2016, p.120) posits. However, Pickavance (2016, p.443-444) avers that where statutory frameworks do not exist, the increased use of the FIDIC forms of contract arguably has the same impact as statutory adjudication because both advocate for mandatory ADR to resolve disputes on construction and engineering projects. Kakooza (2009) claims that Uganda has an institutional framework to support construction mediation, but perhaps it is insufficiently buttressed to ward off the emerging dominance of adjudication via the FIDIC forms of contract.
Pickavance (2016, p.444) opines that mandatory contractual adjudication under FIDIC positively encourages ADR globally, particularly in construction and engineering projects, while Barrett (2019) highlights FIDIC’s current requirement (in the 2017 forms of contract) for parties to appoint a standing (and not an ad hoc) DAAB at the project’s outset. Barrett further reveals that The World Bank (a key player in financing large infrastructure public works) has adopted the 2017 FIDIC forms of contract. Klee (2018, p.461) avers that only the FIDIC 2017 White Book (for client and consultant services) form of contract has mediation provisions. This growing list of financiers embracing the new suite of FIDIC contract forms comprises the African Development Bank (AfDB), the Islamic Development Bank (IsDB), and the Asian Development Bank (ADB) etc. This trend suggests a further bias towards adjudication as the preferred ADR option on large infrastructure projects and a rather bleak picture for other viable alternatives.
In Uganda, the ultimate authority on adjudication in the construction industry is the Uganda Institution of Professional Engineers (UIPE). The special conditions of contract typically state the UIPE as the adjudicator nominating body if and when the parties lack a pre-agreed list of adjudicators or the knowledge to navigate the adjudication process independently. Unfortunately, the UIPE does not perform this role for mediation, and neither has it developed construction mediation guidelines like it has for adjudication – a familiar situation. For instance, Rwelamila (2010, p. 124) claims that in 2003 the Construction Industry Development Board (CIDB) in South Africa led the introduction of adjudication (and not mediation) into construction contracts and published a Procurement Practice Guide (CIDB 2004) dealing with the implementation of adjudication and advocating that adjudication should apply to all categories of construction contracts and be a mandatory requirement for the settlement of disputes before contract completion. This re-echoes the same concerns highlighted above.
3.2 Insufficient education and awareness of sector practitioners
Fiadjoe (2004, p.33) claims that the failure to design appropriate ADR training programmes and ensure proper administration of ADR techniques curtails the use of ADR techniques (like mediation). Genn (2010, p.125) and Phillips (2021) are also proponents of training and educating people about mediation. In an empirical analysis of Scottish construction clients’ interaction with mediation, Agapiou and Clark’s (2013) study revealed that mediation’s benefits are still unknown by some people, most practitioners lack mediation experience, most entities in the construction sector lacked firm policies on mediation use, and unlike lawyers, other sector players lacked sufficient mediation training and exposure.
Musonda and Muya (2011) also concluded that Zambian’s rarely used ADR due to insufficient knowledge and awareness and assert that Zambia lacks appropriate procedural rules and an advisory centre to guide disputing parties on the overall process. Similarly, Mante’s (2014) research revealed that mediation is rarely used in Ghana because of insufficient education and training of professionals and the absence lack of a national policy on construction-related dispute resolution. Mante also highlighted that Ghana treats such disputes just like any other despite the peculiar nature of construction-related disputes. Yet, Ng and Banaitis (2017) argue that construction dispute resolution through ADR should be specialised rather than be treated in the same generic manner as disputes in other sectors. Percy’s (2019) study recommended equipping Uganda’s professionals with mediation skills. From the above observations, it is unlikely that only training and education to create awareness would reverse such a likely scenario in Uganda.
3.3 Government and practitioner intervention
Hollands (1992, pp.127-128) argues that due to pressure from sector practitioners, mediation has now found its way into most of the major construction agreements in use in South Africa. But, despite numerous initiatives, the level of knowledge and use of the mediation processes remains limited. He further avers that countries like the United Kingdom, New Zealand, Singapore and Malaysia that have introduced mediation can attest to its ineffectiveness absent of a statutory force. Genn (2010, p.125) agrees with this and emphasises that increasing the use of mediation without the credible threat of judicial determination is an uphill task. For instance, Ng and Banaitis (2017) highlight that after concluding a trial mediation scheme for selected civil engineering contracts in 1984, the Hong Kong government amended their mediation rules, incorporated mediation in all public works contracts in 1989, and issued the Hong Kong Government Mediation Rules in 1991. Currently, contract parties in Hong Kong can only trigger arbitration if mediation does not resolve the dispute or either party declines to mediate. They further aver that Hong Kong gazetted The Mediation Bill in 2011 and upon completing a legislation process, enacted the Mediation Ordinance in 2013, which sets out the statutory framework for the conduct of mediations. Therefore, there must arguably be a deliberate effort from governments and sector practitioners for mediation to thrive.
3.4 Limited support from multilateral development banks (MDBs)
Mante’s (2014) study revealed that contract parties in Ghana have limited influence over the selection of dispute resolution mechanisms and procedures. He further discovered that funding institutions tend to nominate the applicable contract conditions, which contract parties adopted without sufficient latitude to amend the dispute resolution clauses to suit their needs or address existing dispute resolution challenges. Klee (2018, p.459) compliments this conundrum and posits that since these funding institutions are not a party to the contract, they generally decline legal responsibility for the adequacy of the contract forms. Many MDBs finance large infrastructure projects in Uganda and the world over, e.g., The World Bank, European Investment Bank (EIB), AfDB), KfW Development Bank, The French Development Agency (AFD), ADB, IsDB, United Kingdom Export Finance (UKEF) etc. These MDBs compel Ugandan public sector Employers to adopt their SFC that are principally FIDIC based. Hence, it would probably be a massive boost if MDBs did not bury their heads in the sand when contract parties are thrashing out the finer contract details before contract signature. In any case, such contracts require a prior no-objection from these MDBs before the parties formally contract.
Given the above challenges, using mediation instead of adjudication to resolve construction-related disputes is threatened, even in jurisdictions where mediation is “mandatory”. Phillips (2021) posits that behind the term “mandatory mediation” is a wide variety of practices and systems, which reveal a plethora of reasons why mediation’s uptake is curtailed. Phillips further asserts that even though the mediation community assigns mediation “special” status, numerous people still refuse to use it even when they know about it. Fiadjoe (2004, p.33) also emphasises that mediation (despite its wide application) is not a cure-all ADR option but a worthwhile remedy for avoiding and resolving some (but not all) construction-related disputes. This picture thus presents a unique challenge in any jurisdiction (like Uganda) that may seek to amend the script and increase the use of mediation in the face of FIDIC’s dominance.
4.0 Uganda’s mediation landscape
Uganda is a common law jurisdiction, and according to Bahemuka and Mashwama (2021), mediation is the second most effective ADR technique for construction dispute resolution in Uganda after negotiation. Bahemuka and Mashwama’s study recommended the consistent import of ADR provisions into construction contracts, as did Percy’s (2019) study. Earlier on, Mulolo et al. (2015) had recommended that sector practitioners in Uganda’s construction industry emphasise using suitable ADR mechanisms for dispute resolution both at contract formulation and implementation. They argued that including suitable ADR clause(s) at the contract formation stage would save both the time and money spent on using unrealistic and unsuitable ADR mechanisms when a dispute manifests.
Kakooza (2009) highlights that Uganda’s Commercial Court heavily relies on mediation as the most appropriate ADR tool. He claims that following the Commercial Court’s mediation pilot project conducted between 2003 and 2005, the Commercial Court made the Judicature (Commercial Court Division) (Mediation) Rules, 200761, from 1st November 2009. This made mediation mandatory for all litigants in Uganda (with a few exceptions). Since then, litigant pleadings have been considered incomplete unless these mediation rules are complied with. But, surprisingly, the ADR clauses in most SFC in Uganda exclude this legal consideration necessitating more tactful action from the government and sector practitioners.
5.0 Conclusion
This literature review shows that the tiered-dispute resolution process enshrined in the FIDIC forms of contract is not in and of itself a one size fits all approach to dispute resolution. Depending on the law in the jurisdictions where FIDIC is primarily used, there needs to be some re-think or adjustment of FIDIC’s ADR clause to increase the use of mediation when a dispute manifests. The review further highlights undeniable challenges prevailing both globally and locally in Uganda that threaten mediation’s uptake and that even with its numerous advantages, mediation (just like adjudication) is not a cure-all ADR option but still a worthwhile remedy for resolving appropriate construction-related disputes. Finally, using mediation to resolve construction-related disputes should doubtless feature in the ADR clauses in Uganda’s SFC, but this is not the case, even with a “mandatory” mediation law in place. Instead, adjudication leads the way. Considering the above findings, the research paper seeks to answer the following question:
What can be done to increase the use of mediation on construction-related disputes which arise on public sector projects in Uganda, where the contract parties predominantly adopt the FIDIC forms of contract?
Continue to Part Three
Journals
Agapiou, A. and Clark, B. (2011) Scottish construction lawyers and mediation: an investigation into attitudes and experiences, International Journal of Law in the Built Environment, Vol. 3, No. 2, pp. 159-181
Agapiou, A. and Clark, B. (2013) A follow-up empirical analysis of Scottish construction client’s interaction with mediation, Civil Justice Quarterly, Issue 3, pp. 349-368
Bahemuka, A and Mashwama, C. (2021) Alternative Dispute Resolution in the Construction Industry: A Case Study of Uganda, International Journal of Construction Engineering and Management, Volume 10 (No. 3), 2021, pp. 80-88
Barrett, N. (2019) Dispute boards’ use likely to grow. Construction Law Journal, Volume 30 (Issue 9) November 2019, pp. 24-26
Kakooza, A. C. (2009) Arbitration, Conciliation and Mediation in Uganda: A Focus on the Practical Aspects. Uganda Living Law Journal, Vol. 7 No. 2 December 2009, pp. 268-294.
Mulolo, F, Alinaitwe, H, & Mwakali, J. A. (2015). Choice of Alternative Dispute Resolution Process in Uganda’s Construction Industry. International Journal of Technoscience and Development, Volume 2 (Issue 1) 2015, pp. 28-39
Musonda, H. M. and Muya, M. (2011) Construction Dispute Management and Resolution in Zambia, Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, Volume 3 (Issue 4) November 2011, pp. 160-169
Ng, P and Banaitis, A (2017), Construction mediation and its hybridization: The case of the Hong Kong construction industry Organization, Technology and Management in Construction De Gruyter Open Volume 9, 2017; pp. 1528–1536
Phillips, I. (2021) Mandatory mediation around the world: Mediation’s big problem, The Resolver: The Quarterly Magazine of The Chartered Institute of Arbitrators, Volume 2021, Issue 4 (2021) pp. 8 – 11
Theses
Mante, J. (2015) Resolution of construction disputes arising from major infrastructure projects in developing countries – A case study of Ghana [Doctor of Philosophy Thesis]. University of Wolverhampton
Percy, J. E. (2019) Assessing the effectiveness of mediation as a dispute resolution technique in Uganda’s construction industry. [Bachelor of Science in Quantity Surveying]. Makerere University
Books
Rwelamila, D. M. P. (2010) Construction mediation in South Africa. In: Brooker, P and Wilkinson S. eds. Mediation in the Construction Industry: An International Review. New York: Spon Press, p.124
Hollands, E. D. (1992) Fidic study on amicable settlement of construction disputes. In: Fenn, P and Gameson R. eds. Construction Conflict Management and Resolution. London: E & F Spon, pp. 365-368
Fiadjoe, A. (2004) Alternative dispute resolution: a developing world perspective. 1st Ed. London: Cavendish Publishing Limited
Genn, H. (2010) Judging Civil Justice. 1st Ed. New York: Cambridge University Press
Klee, L. (2018) International Construction Contract Law. 2nd Ed. Oxford: John Wiley & Sons
Pickavance, J (2016) A Practical Guide to Construction Adjudication. 1st Ed. Oxford: Willey Blackwell
Statutory Instruments
The Judicature (Commercial Court Division) (Mediation) Rules, 2007
Websites
African Development Bank (2020) African Development Bank signs five-year agreement to use International Federation of Consulting Engineer (FIDIC) standard contracts [Online] Available from: <https://www.afdb.org/en/news-and-events/press-releases/african-development-bank-signs-five-year-agreement-use-international-federation-consulting engineer-fidic-standard-contracts-33476> [Accessed 24 January 2022]
Islamic Development Bank (2020) Agreement signed between Islamic Development Bank Group (IsDB) and the International Federation of Consulting Engineers (FIDIC) Available from:<https://www.isdb.org/news/agreement-signed-between-islamic-development-bank-group-isdb-and-the-international-federation-of-consulting-engineers-fidic> [Accessed 24 January 2022]
International Federation of Consulting Engineers (2019) World Bank signs five-year agreement to use FIDIC standard contracts [Online] Available from: <https://fidic.org/world-bank-signs-five-year-agreement-use-fidic-standard-contracts > [Accessed 24 January 2022]
International Federation of Consulting Engineers (2021) Contract Users’ Newsletter [Online] Available from: < https://fidic.org/node/34825 > [Accessed 24 January 2022]
