The relevance of Alternative Dispute Resolution (ADR) in the Construction Industry in Nigeria

Written by Moriam Akorede Bakare (MNIQS)

The term “Alternative Dispute Resolution” (ADR), is used generally to describe the methods and procedures used in resolving disputes either as alternatives to the traditional dispute resolution mechanism of the court, litigation, or in some cases supplementary to such mechanisms. Consequently, this article highlights the relevance, effectiveness and popularity of ADR in the construction industry in Nigeria.

Many researchers have found disputes as a major cause of cost overrun, time overrun, project abandonment and severed business relationships.

The complex nature of construction project, characterized with the involvement of a large number of participant for its successful completion embeds disputes waiting to happen, hence the use of ADR in resolving construction disputes cannot be over emphasized.

Dispute resolution through ADR avoids what can be best described as brinkmanship and acrimony, reduces hostility and antagonism, reduces project time and cost overrun, reduces rate of project abandonment and encourages maintenance and sustainability of business relationships, which indirectly boost the overall performance of the construction industry.

These merits of ADR are made largely possible because the procedure provides greater room for compromise than litigation. ADR rules and procedures are flexible, simple and easily adaptable to various types of disputes. 

The Royal Institution of Chartered Surveyors (RICS) also recognizes the relevance of ADR by making conflict avoidance, management and dispute resolution procedures a mandatory competency level for assessing candidates for chartered and technical membership.

The evolution of ADR in the Nigerian Construction Industry can be traced to the provisions for dispute resolution processes as provided for under the Constitution of the Federal Republic of Nigeria, 1990 (as amended) and the Arbitration and Conciliation Act 1990 (now Arbitration and conciliation Act Cap A18 Laws of Federation of Nigeria (LFN), 2004 as amended which has been enshrined in S.19 of the Nigerian Constitution 1999 respectively.

Section 19(d) of the Constitution of the Federal Republic of Nigeria (CFRN)1999, provides for the settlement of disputes by Arbitration, Mediation, Conciliation, Negotiation and Adjudication. Other forms of ADR include Facilitation, Mini-trial, Mediation-Arbitration and Expert Determination.

Many researchers have found that the lack of awareness of ADR, shortage of experience in the use of ADR and non-binding nature of many ADR techniques are factors that militate against the use of ADR.

The popularity of ADR ought to be intertwined with its effectiveness as an effective ADR method will be the most popular as and sought after by parties in dispute.

In the study conducted by Idowu, Ogunbiyi and Hungbo (2015), it was found that the ADR method that is mostly adopted in construction public projects in Nigeria is negotiation, followed by arbitration and mediation while mini trial is the least adopted. Adjudication was also found to be the most effective in terms of putting an end to construction dispute on public projects and mediation being the least.

For effectiveness of ADR, the legal framework for Construction Dispute Resolution in Nigeria needs to be reformed. In consonance with Raji, Mohammed and Oseni (2015), the following are suggested bases on which the reform should be based:

• Disputes arising from construction industry should be given prompt attention.
• The law governing commercial transaction in Nigeria be amended by allowing the construction industry have a separate legal framework due to the nature of the industry so as to be in tandem with the international practice.
• The Nigerian framework for construction dispute resolution needs to be expanded so as to accommodate other processes use in resolving construction disputes, such as the need to put in place Dispute Review Board in order to minimize dispute at site level, place Expert Determination Board for the experts to make their input by giving expertise opinion when the need arises and Statutory Adjudication to facilitate regular and timely payment.
• Provision of an Adjudication Act to regulate and facilitate payment culture in the industry.
•  The Regional Centre for International Commercial Arbitration, Lagos (RCICA) should give more public enlightenment on the existing ADR process to all construction industry stakeholders.
•  The Nigerian Institute of Quantity Surveyors should collaborate with other construction professional bodies to ensure that conflict avoidance, management and dispute resolution procedures is included in the curriculum of construction industry related departments in all tertiary institutions.

References

F.O. Idowu, O. E. Ogunbiyi and A. A. Hungbo (2015). An Evaluation of the use of (ADR) in the Nigerian Public Construction Project Disputes. International Journal of Sustainable Construction Engineering & Technology, 6 (1), 16-28.

B. Raji, A. A. Ali Mohammed and U. A. Oseni (2015). Reforming the Legal Framework for Construction Dispute Resolution in Nigeria: A Preliminary Literature Survey. International Journal for Bussiness, Economics and Law, 6 (4), 88-95.