FG wants arbitration for construction industry disputes

The Federal government has promised to drive Lands and Housing reforms to make land readily accessible to Nigerians for the provision of shelter for themselves and their families.

Permanent Secretary Federal Ministry of Lands, Housing and Urban Development, Mr. Gorge Ossi who stated this at the 5th Building & Construction Economic Round Table (BCERT 5). BCERT at the weekend in Abuja , noted that the Ministry has already produced the revised and updated National Housing Policy and the Urban Development Policy and is willing to partner with genuine investors to radically increase the housing stock and bridge the country’s yawning housing deficit of 17 million units.

He stated that the Building and Construction sector has a major role to play in our country’s industrialization and economic development as it creates capital formation and wealth in the economy and has the unique capacity to generate high multiplier effect and employment on a very large scale.

Ossi observed that disputes are inevitable in every field of human interaction of which the construction sector is no exception and added that litigation has been the traditionally known method of resolving disputes.

He however, noted that arbitration has developed into a preferable alternative dispute resolution method in this sector as a result of the increasing costs and delays associated with litigation processes while some disputes are so sensitive and confidential in nature that the disputants may prefer settlement in the privacy provided by Arbitration rather than in the public glare of the courts.
He said, “It is not unusual that disputes may arise among parties to various contract agreements arising from the Ministry’s development initiatives. It is my belief that Arbitration will be handy in the resolution of such disputes. The QSRBN deserves commendation for making BCERT -5 open to all construction professionals as well as lawyers who work in the industry. This is because collaborative efforts among such professionals will produce the synergy needed to drive the industry’s rapid growth and development”.

The Permanent Secretary commended the board for its responsiveness to contemporary issues relating to the built environment as indicated by the theme of this Round-Table, which is “Construction Arbitration for Quantity Surveyors and other Professionals, noting that this would contribute to raising the standard of knowledge of not only Quantity Surveyors as required of the Board by the establishing law, but other professionals in the building and construction sector.

Ossi urged the participants to take advantage of this unique opportunity to update their knowledge of Arbitration.

In his address, President of QSRBN, Mallam Husaini Dikko Dikko observed that in order to maintain international competitiveness, professionals must strive to remain on the cutting-edge and continually increase their store of knowledge stressing that it is for this reason that the Quantity Surveyors Registration Board of Nigeria insists that a registered quantity surveyor must attend at least one Mandatory Continuing Professional Development (MCPD) event every year in other to qualify for renewal of his annual practice licence.

He decried an emerging trend whereby parties who sign up for arbitration at inception of contract use all kinds of intrigues and subterfuge to frustrate arbitration whenever disputes arise stressing that whenever there is an arbitration provision in construction contract, the process must be exhausted before any party can opt for litigation.

He said, “Submission to Arbitration is a condition precedent to litigation. But parties often try to frustrate arbitration using all forms of technicalities. This should be frowned at. Whilst it is possible to obtain favourable judgment in the Courts based on technicalities, it is almost impossible to obtain favourable Awards in Arbitration based on technicalities. In Arbitration, matters are treated on their merit and facts are sacrosanct in arbitration. These realities account in part to the increasing popularity which arbitration enjoys today in the construction industry”.

Dikko noted that a careful survey of the socio-political environment of the Nigerian building and Construction Sector reveal increasing incidents of disputes and disagreements of many shades among stakeholders adding that the implementation of Nigeria’s infrastructural development master plan and other agenda for rapid infrastructure transformation of Nigeria has led to major boom in economic activities in the building and construction sector.

According to him, “With the upsurge in construction activities, the management of relationships between various contracting parties to construction projects becomes increasingly problematic. Generally, the major parties to construction contracts are the Employer and the Contractor. Although other parties such as Sub-contractors and suppliers, statutory authorities and consultants sometimes come into the matrix.

Disputes are regular features of construction contracts. Some disputes just happen, some can be anticipated but in most cases, disputes just happen. However, it should be expected that disputes whenever they arise should be amicably resolved between the parties so that the project which is the subject of their contractual relationship proceeds expeditiously and do not run into stormy waters”.

The QSRBN president argued that for disputes to be amicably resolved between parties both parties must come out clear and clean and be honest with each other.

“There should no underhand dealing or any intention to cheat on the part of one or both parties. Disputes and disagreements are common features of all human relationships. Their occurrences in construction contracts are therefore not out of place. What matters is that they are resolved. Often disputes are resolved by parties without third party interventions. With increasing complexities of most construction projects, the sophistication of most construction clients and the exactness of their requirements, third parties are increasingly becoming common features of our dispute resolution relationships in the building and construction sector”.

He explained that all construction contracts have provision for Arbitration as one of the conditions that govern the contract adding that the law governing Arbitration in Nigeria is cited as the ‘Arbitration and Conciliation Act CAP 18, LFN, 2004.’ “Until recently, it was found in Chapter 19 of LFN, 1990. It states that its main object is “to provide a unified legal framework for the fair and efficient settlement of commercial disputes by arbitration and conciliation and to make applicable the Convention on the Recognition and Enforcement of Arbitral Awards (New York Convention) to any award made in Nigeria or in any contracting state arising out of international commercial arbitration.”

Dikko observed that competency in construction arbitration can open a window of opportunities for you in a lucrative practice in construction arbitration, adding that BCERT is an annual programme of the QSRBN designed to set agenda for National Development using the building and construction sector.

He stated that BCERT as a concept was introduced by the governing board of the QSRBN in 2010 to draw attention of policy makers to the building and construction sector by putting its activities on the front burner of national discourse on a yearly basis.