Asia’s Construction Disputes are Taking Longer to Resolve
According to a recent report ‘Global Construction Disputes: Don’t get left behind’ published by Arcadis, the time required to reach resolution of a construction dispute in Asia was on average 19.5 months. This is four months longer the global average of 15.5 months.
Other findings from the report include:
- Asian Dispute Values dropped from US$85.6 million in 2014 to US$67 million in 2015.
- The top three causes of disputes in Asia were considered to be:
- Failure to properly administer the contract;
- Failure to make interim awards on extension of time and compensation; and
- Poorly drafted or incomplete and unsubstantiated claims.
- Joint Ventures are involved in 41% of disputes Asia, compared with a global average of 25.5%.
- The three most used methods of Alternative Dispute Resolution in Asia were:
- ‘Party to Party’ negotiation;
- Arbitration; and
Arcadis stated that although there is a construction slowdown in China, in Hong Kong and Singapore there are challenges presented by large scale infrastructure projects reaching the final stages.
Mention was also made of legislation changes in Hong Kong that have occurred or which are on the horizon with the introduction of the Rights of Third Parties Ordinance on 1 January 2016 and the Security of Payment legislation which is due in 2017.
Arcadis close the Asia section of the 2015 Report by stating:
It will be interesting to see how the introduction of new legislation in Hong Kong impacts on the periods for resolution of construction disputes in the Territory.