The sixth in FIDIC’s popular series of Covid-19 webinars took place on Thursday 23 April 2020 with an event on alternative dispute resolution (ADR) and the role of dispute avoidance, writes FIDIC communications advisor Andy Walker.
“Covid-19: ADR and the role of dispute avoidance” was attended by a record 996 attendees and given that previous webinars looking at contracts in the context of the Covid-19 crisis had all raised the issue of avoiding legal and contractual disputes during the current period and avoiding the courts, the popularity of this event on ADR was no surprise.
The event was moderated by FIDIC CEO Nelson Ogunshakin and the speakers included FIDIC board member Aisha Nadar from Sweden, William Godwin QC, barrister at Arnold Porter, Nicholas Gould, a partner at Fenwick Elliott, international judge and arbitrator Sir Vivian Ramsey, Mario Marti, chief executive at FIDIC’s Swiss member association Usic and James Perry, president of the Dispute Resolution Board Foundation Region 2. As ever, FIDIC president Bill Howard and Daduna Kokhreidze, FIDIC’s head of legal and compliance were also present at the webinar.
Kicking off the event, FIDIC board member Aisha Nadar said that unique and unprecedented times called for innovative solutions and this was definitely the case with dispute resolution. The tools were available within the FIDIC contracts for potential creative settlements and these should be used to try and find a way forward that can meet the needs of both parties to a contract. Nadar also highlighted the important role of Dispute Resolution Boards.
The first speaker, international judge and arbitrator Sir Vivian Ramsey, said that although contract partners were taking different views and approached during the current crisis, he thought that the industry was moving into an era of dispute avoidance and that more and more this process was taking place in a virtual environment. Parties were used to this digital process and successful negotiations were happening and settlements were being reached. Virtual hearings were becoming more common and it was likely that fewer people would have to travel around the world for arbitrations as a result, he said.
Barrister at Arnold Porter William Godwin QC highlighted the importance of the often-informal discussions and negotiations that took place in order to try and nip disputes in the bud. Dispute resolution was increasingly important in the FIDIC contracts and it was hard to imagine a more pressing time to be discussion such issues, he said. Lack of communication was often at the root cause of disputes and it was more important than ever in the current climate to have dialogue and discussion between all contract parties.
Nicholas Gould, partner at Fenwick Elliott, also highlighted the crucial role of good communications on contracts and also mentioned FIDIC’s Golden Principles document which stressed the importance of the role of dispute boards under the FIDIC contract. “People should read the Golden Principles if they have not done so as there is a lot of useful information in there,” said Gould. He also made the point that it was important that negotiating parties had the authority to reach decisions.
Mario Marti, chief executive at FIDIC’s Swiss member association Usic, joined the webinar from Berne and said that the construction sector was still working in Switzerland albeit with strict health and safety regulations being observed on site. “Litigation and arbitration are the worst options for settling disputes,” he said, and time was of the essence with “quick money” being needed by contract parties. This raised challenges for ADR in the current circumstances and it was important to have a timely and streamlined procedure. Increasing use of digital would help in this regard said Marti who stressed that it was in all parties’ interests to come to a successful conclusion when a dispute arose as firms going bust and projects not being completed would not benefit anyone. Marti also praised the recent issuing of a Covid-19 guidance memorandum for users of FIDIC standard forms of works contract, which he said was very useful.
James Perry, president of the Dispute Resolution Board Foundation Region 2, said that just six weeks ago construction sites were working and now everything has changed. This new situation has raised significant challenges and issues for the industries. The different approaches to construction around the world being taken by governments were further complicating the situation, said Perry. He highlighted the prime importance of dispute boards and their important role in facilitating discussions, though many of these will be taking place in a virtual environment. It was very important that this dialogue continued during the current crisis and his organisation was ready to assist and advise parties on the best online platforms to use. “Don’t forget to use dispute boards to give non-binding opinions,” Perry urged, as this can help in coming to successful conclusions.
Lots of issues were raised during the discussion, including the increasing role of digital in dispute avoidance which was likely to be even more widespread given the current pandemic and its after-effects. In the future, contracts are likely to contain permissions for dispute discussions to take place digitally and this was seen as a benefit of the current crisis. Attendees also posted questions about how dispute boards would work effectively during the current crisis, the responsibilities of the various parties for providing PPE on projects and how clauses in the FIDIC contracts could be used to aid dispute avoidance.
Summing up the webinar, FIDIC board member Aisha Nadar thanked all the speakers for their excellent contributions and the record number of 996 attendees for their questions. She concluded her remarks saying that contract parties in dispute should hope for the best but prepare for the worst, making sure that they kept accurate records in all cases to ensure that they were well prepared for all eventualities.
The next FIDIC webinar in the series is Covid-19 - Work from home using BIM tools and collaborative work: how to adapt? which takes place on Tuesday 5 May at 12 noon CET. There is sure to be a high number of registrations for this event so please sign up as soon as possible.
Click here to book your place on the event on working from home using BIM tools.
Please click below to view a recording of the FIDIC ADR webinar.
