Assessment Of Effectiveness Of Arbitration And Developing Framework To Enhance Arbitration Practices In Road Construction Contracts

Abstract

Disputes in construction industry are frequent because of the uniqueness and complexity of construction projects. Arbitration is considered to be an effective final dispute resolution mechanism in solving construction disputes. This research aims to study effectiveness of arbitration in the road construction industry focusing on road construction contracts undertaken by the ERA. In doing so, the research studied arbitration effectiveness in terms of time efficiency, cost-effectiveness and quality of awards. To achieve the research objectives a comprehensive literature review was conducted on the current knowledge and practices of arbitration in the construction industry of Ethiopia and international level. In doing so, the researcher reviewed the new proclamation, titled the Arbitration and Conciliation Working Procedure Proclamation no. 1237/2021, which provides the legal framework, provisions related to arbitration in the conditions of FIDIC contracts and a score of articles and books related to arbitration of construction disputes in general and road construction disputes from the Ethiopian context. Then, interviews and case studies were conducted to collect data from various experienced professionals working in the road construction industry as Arbitrator, Claim/Contract Engineer, Lawyers employed in ERA, private construction companies and consulting firms. The data are organized, analyzed and interpreted to provide applicable and rational recommendation to enhance the arbitration practices in resolving construction disputes arising in the Ethiopian Road Administration projects. Accordingly, the study revealed that dispute potential in Ethiopia's road construction industry is high, primarily due to contract-related issues and project management problems. In regard to effectiveness of arbitration in resolving construction disputes in federal road contracts the research disclosed mixed results: while domestic arbitration is generally effective in terms of time and cost, international arbitration proves to be less efficient and far more expensive. Establishing a more robust domestic arbitration center, improving the only functioning AACCSA AI capacity and setting a vision and working towards making Addis Ababa as a seat for international arbitration are forwarded as recommendations.