Mediation and Arbitration in Construction Work Contracts

Mediation and Arbitration in Construction Work Contracts

Arbitration and mediation are part of alternative dispute resolution. Alternative dispute resolution is a dispute resolution institution or difference of opinion through a procedure agreed by the parties, namely settlement outside the court through deliberation, negotiation, mediation, conciliation, or expert judgment. Mediation is a way of resolving disputes through the negotiation process to obtain agreement from the parties with the help of a Mediator. Construction business lawyers in Tulsa will make construction entrepreneurs feel safe.

The mediator here is a judge or other party who has a Mediator Certificate as a neutral party who helps the parties in the negotiation process to find various possible dispute resolutions without using any means to decide or force a settlement.

The mediator as a third party who conducts mediation must understand the problems of the two parties, where the Mediator will get complete information from each party to understand the problems and also find solutions. After that the mediator as a third party will provide a solution, where each party must listen to all forms of input from the Mediator, to speed up problem-solving to reduce the accumulation of case files.

Arbitration is a method of resolving civil disputes outside the public court based on an arbitration agreement made in writing by the disputing parties. Once a dispute surfaces between two or more parties to a project, litigation in construction projects can help you chart a path to resolution that doesn’t require the parties to face off in court. The right construction lawyer will get you the best results when all else fails and your legal matter may be headed to a jury.

Arbitration dispute begins with a cooperation contract between the two parties, if both parties cannot complete their duties according to the agreed agreement/contract, the aggrieved party can carry out arbitration to resolve the problems that occur. The initial arbitration process is carried out by both parties who determine with the Arbitrator who will be the executor or decision-maker if occurs. An arbitrator is a person or more who is selected by the disputing parties or appointed by the District Court or arbitration institution, to give a decision regarding a particular dispute that is submitted to be resolved through a court process. Selection of Arbitrators is based on the agreement so that the Arbitrator selected is independent.

Similarities and Differences between Mediation and Arbitration

Equation

1. Both are alternative dispute resolution, namely how to resolve problems outside the court;

2. Both appoint and use the third party as a neutral mediator;

3. Both aim to shorten the problem/dispute resolution process.

Difference

1. In mediation, the third party is a Mediator who acts as a mediator, facilitating the negotiation process, and only providing input. Whereas in arbitration, a third party is an arbitrator who can provide a decision on an issue.

2. In the mediation the result is Win-Win Solution, while the arbitration result is Win-Lose Judgment;

3. In the mediation the Mediator’s suggestions are not binding, so the parties decide. Whereas in binding arbitration because the arbitrator makes decisions and has executive power.

Dispute settlement stages

1. The disputing parties first conduct deliberation to reach a consensus.

2. If no consensus is reached, the dispute settlement shall be following the construction work contract.

3. If the dispute settlement is stated in the contract, the dispute resolution is carried out through the following stages: mediation, conciliation, and arbitration.

4. If the dispute settlement is not included in the construction work contract, the disputing parties establish the desired settlement procedure.

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