Arbitration as an Alternative to Litigation in Construction Projects

Abstract

In many countries of the world, arbitration has been used as an alternate disagreement resolution technique, which remains a form of dispute settlement process outside a courtroom. Disagreements and conflicts in the construction industry have been viewed as disagreeable events in the implementation of projects by numerous researchers and these harm costs, performance, and complete objectives. Such conflicts have in the past been settled by litigation and lawsuits in which commercial ties were ultimately destroyed. The study employed four research objectives and research questions. Data used for the study existed from secondary and primary sources. Secondary records were assembled from related works on preceding studies although primary data were collected from fact-finding. The sample size is 100 respondents made up of staff from the Federal Ministry of Works and the state ministry of works in Owerri, Imo State, Nigeria. Four establishments of higher learning in Imo State were also covered. A list of contractors was assimilated from the federation of building and civil engineering contractors Imo State branch. The study exposed that arbitration has been established to be worthwhile and less time overwhelming. Furthermore, usage of arbitration is additional facilitated by the inclusion of an arbitration clause in most construction contracts which usually states that all disputes arising in the contract shall be settled by arbitration. The study concludes that the use of arbitration in dispute resolution in construction contracts not only minimizes cost and time but also facilitates cordial relationships among the parties after the dispute and this minimizes the incidence of project failure and abandonment in the construction industry. It recommended that in addition to proper education on the use of arbitration, there should be adequate enlightenment and awareness creation on the importance and use of arbitration in the building industry, especially in the informal sector.