Adjudication is often described as a “pay first, argue later” mechanism for resolving disputes in the construction industry, and is designed to protect cash-flow during construction. By law, parties to a UK construction contract have the right to refer a dispute to adjudication “at any time”. When they do, the adjudicator must be appointed within 7 days and provide a decision within 28 days, unless agreed otherwise. Adjudicators’ decisions are binding until such time as the dispute is finally determined by legal proceedings, arbitration or by agreement, though they are frequently accepted by the parties.
Most maritime-related, offshore construction contracts are exempted from the relevant legislation and are therefore not subject to UK statutory adjudication. However, there are some exceptions and the LMAA recognises the role that adjudication can play in keeping construction and decommissioning projects moving forward.
Dispute Boards are mostly used in construction and infrastructure projects and are gaining in popularity. Also known as Dispute Resolution Boards, Dispute Review Boards, and Dispute Adjudication Boards, each Board consists of 1-3 individuals who assist contracting parties throughout the life of a project to avoid, manage and resolve disputes in real-time by identifying and addressing issues early on.
Dispute Board members are respected and trusted professionals, selected for their knowledge and experience in the subject matter of the project, as well as impartiality and independence. They form part of the project management group and are responsible for assisting the parties to deal with inevitable issues that arise during the lifetime of a project. If these cannot be resolved amicably, either party can apply to the Dispute Board for a recommendation, or decision. Decisions must be reasoned and are binding until finally determined by legal proceedings, arbitration or by agreement.
According to the Dispute Resolution Board Foundation (DRBF), 60% of projects utilising a Dispute Board have no disputes at all; and 98% of the disputes that reach a Dispute Board do not go on to further litigation or arbitration. Dispute Boards can provide a highly effective means of assisting parties in a project, not only to resolve disputes quickly but to avoid them altogether, resulting in a “best-for-project” outcome for all parties.
Dispute Boards and the LMAA
Dispute Boards are not currently used in shipping and do not feature in any of the standard form contracts commonly used. However, they are an increasingly standard feature of the most commonly-used suite of contracts used by the construction industry globally and are often required by multilateral development banks and the World Bank, in contracts financed by them.
As global leaders in commercial maritime dispute resolution, the LMAA prides itself on the breadth and depth of its membership. The LMAA’s world-renowned arbitrators have a diverse range of commercial and technical as well as legal maritime backgrounds.
The LMAA recognises the role that Dispute Boards can play in areas such as shipbuilding and the commissioning and decommissioning of offshore platforms and wind farms; and it is possible that they may be provided for in other long-term shipping contracts.
As always, parties should satisfy themselves as to the suitability of candidates for appointment on a case-by-case basis.
The following Full and Aspiring Full Members are prepared to accept appointment as adjudicator or DRB member:
Aspiring Full Members:
Dr Julian Brown
Capt Keith Hart
Capt Milind Karkhanis
Capt Sliwa Michael
A list of those Supporting Members who are similarly willing can be found here.