Enhancement of dispute resolution mechanism in the Iranian construction industry / Abdollah Saeb

Abdollah, Saeb (2019) Enhancement of dispute resolution mechanism in the Iranian construction industry / Abdollah Saeb. PhD thesis, University of Malaya.

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Abstract

Inadequacies in resolving construction disputes not only hinder the efficient use of the project’s budget but also reduce productivity, and prolonging a project’s completion time which affects performance objectives outlined in the contracts. Further, delays damage long-term business relationships and tarnish the affected party’s reputation. The long periods of time and the money spent by all parties involved in a dispute have led to the rise of methods of dispute resolution, called Alternative Dispute Resolution (ADR) methods. In Iran, with the development of the construction industry come increasingly complex disputes; however, there have been no intellectual solutions to cater to these complexities. Despite the fact that there are laws regarding arbitration and compromise within the Iranian legal system, the methods have not evolved to cater for complex disputes in the developing construction industry and have virtually been abandoned in practical application. Therefore, the litigation process remains the main method of dispute resolution. This research aims to formulate a mechanism for dispute resolution in the Iranian construction industry. Among others, the research identifies the available ADR methods in the construction industry and investigate the Iranian General Condition of Contract and legal system in settling construction disputes. Mixed method and concurrent triangulation strategy have been used to carry out the investigations and for the development of a mechanism. The qualitative data source collected for this research was through semi-structured interviews with 30 experts from five groups involved in construction disputes in Iran including; contractors, owners, consultants, official experts and lawyers. Qualitative content analysis and inductive approach were used to analysis the data. Furthermore, Maxqda software was used to manage and organize complete interview transcripts and facilitate the qualitative data analysis process. Random sampling was selected for quantitative data collection. Of the 200 official experts invited to fill in the questionnaire, 112 experts participated. SPSS software version 20 was used to analyze quantitative data. The results showed a three-step mechanism including; negotiation, shortcut methods based on sources of disputes and Adjudication – Arbitration (Adj-Arb), as the appropriate mechanism for dispute resolution of the Iranian construction industry. The remarkable thing that can be deduced from the three steps of the mechanism is that respondents offered three different levels to resolving disputes including; the convincing level (negotiation), proving and impel level (shortcut methods) and forcing level (Adj-Arb). This study also shows that there are three dispute resolution methods of General Condition of Contract including; the “Inquiry with Management and Planning Organization”, “Expert Decision” and “Arbitration of Technical Supreme Council”. Of these, “Expert Decision” is not applicable as it is not accompanied with required executive instructions and “Arbitration of Technical Supreme Council” is time consuming and has the potential to be biased. Although replies to inquiries are not yet transparent, only “Inquiry with Management and Planning Organization” is recommendable.

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