If a dispute arises between the parties regarding any of the provisions of the contract, it is to be referred to conciliation in accordance with the conciliation procedures published by the RIAI in agreement with the Society of Chartered Surveyors and the Construction Industry Federation. If the settlement of the dispute is not achieved under the procedures, either party may refer the dispute to arbitration.
Subject as above, any difference between the employer or contractor or the architect on behalf of the employer and contractor, during the progress of the works or after employment, abandonment or breach of the contract as to the interpretation of the contract or anything, or matter arising under it or the withholding of an architect’s certificate, to which the contractor claims entitlement, may be the subject of a reference to arbitration.
Either party may give the other notice of the dispute or difference, and the matter shall be referred to arbitration. The parties may agree to appoint an arbitrator. Failing agreements, he may be nominated at the request of either party by the president of the RIAI after consultation with the President of the Construction Industry Federation. The award of the arbitrator is to be final and binding on the parties.
The RIAI contract provides for arbitration of disputes. Subject to the above requirements in respect of mediation/conciliation, the general principle is that disputes are arbitrated. They will only go to court on points of law in limited circumstances as provided under the Arbitration Act.
In the context of construction and engineering, the arbitrator may be an expert in the field of building, engineering disputes etc. He will more readily understand the matters in dispute. However, as an arbitrator, he must act on the basis of the evidence before him.
Arbitration is potentially cheaper and quicker than litigation. It may be kept confidential. However, many arbitrations are themselves prolonged and costly, particularly where one party is determined not to cooperate. A significant shortcoming in the context of building contracts is the inability to join third parties. Only parties with a contract can be bound by the arbitration clause.
Conciliation effectively involves settlement negotiations. They are without prejudice to the rights of the parties in dispute. All information given or exchanged by either party orally or in writing or during the conciliation or prior to it, is inadmissible in legal proceedings as evidenced against that party. However, if it is otherwise admissible, it is not rendered inadmissible simply by being used in the conciliation.
The parties to the dispute must not summons or require the conciliator to appear in proceedings. They may not require his notes, information in the proceedings.
Conciliation emerged in the 1990s due to dissatisfaction with litigation and arbitration as a form of dispute resolution in the contract industry. Conciliation is a species of alternative dispute resolution. They have been found in construction and engineering contracts for many years.
Conciliation procedures are nonbinding. Conciliation is entirely voluntary. It can be broken off at any time. The costs should be significantly less than litigation or even arbitration.Conciliation may not always be appropriate.
The conciliation procedure requires that the party seeking conciliation notifies the other of the matter in dispute. Unless the parties agree to a conciliator within 10 days, they are to request the President of the RIAI to appoint a conciliator from a list agreed by the RIAI, the Society of Chartered Surveyors and the Construction Industry Federation.
The conciliator is to require the parties to submit a brief written opening statement and necessary documentation within 10 working days of his appointment. The parties are to notify the conciliator of the names of persons appearing at the conciliation.
The conciliator is, within 10 working days of receipt of the documentation, to establish the order of proceedings and arrange a convenient time and place for the hearing. He is to consider and discuss solutions to the dispute as he thinks appropriate or may be suggested. All information given to the conciliator is confidential and it remains so unless the party giving it authorises disclosure.
The conciliator may having informed the parties, consult independent third parties. He is to endeavor to commit the parties to reach a mutual settlement. Failing this, he shall within 10 working days of the hearing, issue his recommendations. He need not give reasons. It is to remain confidential if rejected by either party. If neither party rejects the recommendation within 10 working days, it is deemed final and binding. If either party rejects or recommends it, there is deemed to be a request for arbitration.
Each party to conciliation is to pay his own costs. There are to be jointly liable for the conciliator’s costs in equal shares unless he decides otherwise.