Effective Use of the ADR Process in the Construction Industry

Abstract

The construction sector in India has undergone significant development and it is one of the key contributors to the progress of a nation and the highest drivers of economic growth worldwide. The recent development and trends which we notice in construction have marked the beginning of a new phase. The traditional methods are being transformed and developed to make them more efficient and effective. In India, infrastructure is one of the top sectors, which is attracting the highest foreign direct investment (FDI). Even at the global level, the construction output is growing very fast, the statistical data can be viewed in my research paper. It is thus clear that construction is proving to be one of the most dynamic sectors not only on a global scale but also in India. With a sector subject to extreme trifles and complexities, it is only rational to infer that disputes arising out of construction activities would also call for distinct expertise and proper understanding of the issues surrounding construction activities. The growing demands of the construction industry have given rise to more disputes, delays and consequently more claims, which need to be addressed in an effective and expeditious manner. The perceived limitation of the formal adjudication process has led to thoughts about alternative means for the resolution of disputes in a timely, inexpensive, and humane manner. This alternative includes arbitration, mediation, conciliation and other hybrid indigenous mechanisms of dispute resolution. Even the legislative initiatives have attempted to harmonize the Indian legal framework on alternative dispute resolution (ADR) with international best practices to bring certainty and uniformity in law and practice of ADR in India to attract business and foreign investment to the country. There is a growing understanding that ADR can play a significant role in the success of the ‘Make in India’ and improving India’s position in the ease of doing business there. The present paper focuses on how best the ADR can be adopted to resolve the issue in the construction industry. The author is going to discuss mainly three issues, namely the different types of construction activities; construction contracts and issues arising out of contracts and finally, the focus lies on how the ADR method will be an effective mode in comparison with litigation, with regards to effectiveness and timely resolution of construction disputes. Claim, Dispute, Disagreement, Contract, Arbitration, Conciliation, Litigation, Mediation, ADR