Journal of Legal Affairs and Dispute Resolution in Engineering and Construction

Water disputes have been observed to be almost commonplace in developed as well as developing/underdeveloped nations. The history of such problems is in many cases centuries old. Thus, the economy of water-stressed nations has been adversely affected over the course of time. The nature of disputes—and the stakeholders involved—has also been changing. Previously, when resources were available in abundance, such disputes existed in a dormant state. But with the exponential rise in population, development, and need for industrialization, these disputes have taken center stage. Further, such disputes have also become intertwined with issues related to borders, political relations, and economic ties between nations. The consequences of not resolving these disputes are indeed dire. Therefore, to understand the depth of water-sharing issues, three large international water basins have been studied in detail to make a comprehensive assessment of facets related to such disputes. Subsequently, an attempt has been made to come up with solutions and recommendations for, if not completely eliminating, at least mitigating such disputes and bringing their existence to the bare minimum. The authors have proposed three solutions: (1) direct compensation, (2) water trading, and (3) balance of benefits. The findings will help riparian nations solve their water disputes amicably.

Article 88 of Law No. 2 of the Republic of Indonesia in 2017, concerning construction services, suggested three stages of dispute resolution: (1) mediation, (2) conciliation, in which both could be replaced by the appointment of a dewan sengketa (DS), and (3) in the event that one party is dissatisfied with the decision, the final stage is arbitration, with no more litigation. During a study using data from the Indonesian Supreme Court’s website, it was found that the litigation process, starting from district court and proceeding to high court, supreme court, and then judicial review, is without any restrictions or limitations on the number of iterations of this process, provided that new evidence has been found. Although, based on best practices, arbitration decisions should be final and binding, the study showed that they could still be challenged in Indonesian courts; therefore, both the litigation process and arbitration are becoming less certain. A study in August 2017 showed that reluctance to use dispute boards (DBs) was because of a lack of acknowledgement of DBs, no law shelter, and high costs; a recent study in January 2020, after the Law No. 2/2017 was in force, showed that the reasons for reluctance to use DBs changed to a lack of trusted and respected people, lack of acknowledgement of DBs, and high costs. It is proven that the issuance of the law as well as dissemination and training by the government have had a positive impact on using DBs. Pilot projects on using a dewan sengketa, a modification of a dispute board involving the national auditor, who was given the authority to provide advice to influence a decision based on Presidential Decree No. 192/2014, showing an innovation by the author to accommodate expectations from both parties to resolve potential dispute before it escalates and still being aligned with the Indonesian law and regulation, certainly need the government’s support. The DS has two functions: to issue a final and binding decision or to issue a recommendation; the latter is more appropriate in Indonesian culture. To ensure independence, fairness, and transparency in the decision or recommendation being issued, it is mandatory that DS members be trusted and respected people.

Construction arbitration is characterized by incessant challenges to its awards. Although these challenges suggest dissatisfaction with the outcomes, the role of perceived fairness in influencing disputants’ cooperative behavioral reactions to arbitral awards remains unclear. To address this research gap, a qualitative multiple case study involving documentary analysis and 13 semistructured interviews of arbitrators, parties, and party representatives in five exemplifying cases was undertaken. Findings indicate that although fairness is an integral aspect of the dispute resolution process, perception of its influence on disputants’ cooperative behavior varied. While award favorability influenced perceived award fairness and consequently award acceptability and postdispute relations, perception of procedural and interactional fairness influenced the choice of arbitration as an avenue for resolving future construction disputes. Thus, the extent to which the awards were favorable to one party, based on the degree of control commanded over the process, determined disputants’ cooperative behavior. These findings are significant because they provide a nuanced understanding of how the various components of organizational justice interacted in influencing cooperative behavior in construction arbitration among the cases studied.

Worldwide, governments have exploited a range of contractual structures to cope with the change of project characteristics and role of stakeholders in the evolution of the approach to public–private partnerships (PPPs). This has brought about the establishment of various PPP models that enable the successful implementation of projects. In this regard, the National Highways Authority of India (NHAI) introduced the model concession agreement (MCA) forms of build–operate–transfer (BOT) (toll), BOT (annuity), and the hybrid annuity model (HAM), and has widely implemented them in the delivery of PPP road projects. However, the selection of PPP models lacked the decision-supporting framework that links project characteristics with the preference of stakeholders. The purpose of this study is to establish a conceptual framework that assists decision makers in the selection of a suitable PPP model in a well-organized way. A case study project based on systematic document review was conducted to analyze the evolution of PPP delivery models by NHAI to cope with the change of project characteristics and role of stakeholders over time. Accordingly, a conceptual framework has been developed using PPP modality selection criteria to accommodate project characteristics with the experience of clients, the private sector, and lenders in preferring a specific PPP model. The implementation of the proposed framework has been validated with case study projects. This study demonstrates the interaction between project characteristics and the preference of stakeholders in PPP models, which enhances the project value by reducing the rebidding and failure possibility of projects due to the lack of the private sector and lender’s interest.

Construction disputes can be instigated by several factors that are interrelated. Past studies on dispute causal factors mainly focused on examining individual factors without revealing their interdependencies. Thus, this study aims to establish a dispute causal model and identify the interrelationships among the different dispute causes. To achieve this, 14 common causal factors were identified through a literature survey and subsequently verified through a pilot study. Further, by gathering 82 experts’ opinions through a questionnaire survey and using interpretative structural modeling (ISM), a dispute causal model was developed. The developed model portrays a six-level hierarchy among the identified factors. The “ambiguous language of a contract document” emerged as the trigger for the other factors and was positioned at the bottom of the ISM hierarchy. The factor “project cost overrun,” which is highly controlled and influenced by the other factors, emerged at the top of the hierarchy. An impact “matrix cross-reference multiplication applied to a classification” (MICMAC) analysis classified and quantified each factor on the basis of its dependence and influence on the other causal factors. The findings from this study will help construction professionals focus on the significant causal factor(s) responsible for triggering other causal factors, and ultimately help in reducing construction disputes.

River water projects are easily susceptible to interstate or intercountry disputes, because water is a fundamental resource for life. However, limited studies have reported on transboundary river water disputes. Moreover, such studies are rarely conducted based upon empirical evidence. In addition, the implications of disputes are seldom reported. Using case studies, two different types of river water projects were analyzed in this study; one in which the lower riparian region is a state within India, and another in which the lower riparian region is a country. Analyzing two case projects, a total of 15 factors that lead to disputes were identified; these included some common factors such as downstream impacts, imbalances in control over river waters, and mistrust. Additional major factors included intercountry factors such as historical differences between two countries, interference of riparian country, and conflict over dispute resolution techniques. Other factors were project-specific. This study also revealed the implications of disputes, mainly increases in project cost, project schedule variances, and socioeconomic losses. Overall, this study fills a crucial gap in the body of knowledge on river water project disputes by identifying the factors that cause disputes and their implications based on empirical evidence from India.

The German fee system for architectural and engineering construction planning services is characterized by fixed minimum and maximum tariffs. In July 2019, the Court of Justice of the European Union ruled on the noncompliance of the German Official Scale of Fees for Services by Architects and Engineers (HOAI) with European law. The court found that minimum and maximum fees for construction planning services infringe the Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on Services in the Internal Market by building up barriers for providers from other European Union countries in developing their service activities within the German market. Although the Court of Justice of the European Union is not authorized to declare member states’ legal regulations to be invalid, Germany is obligated to revise its respective regulations with regard to this decision. The verdict was expected but will have a huge effect on the fees system for architectural and engineering construction planning services in Germany because the legislature must revise the fee regulations, and in the meantime the unclear legal situation is affecting contractors and service providers. To elaborate recommendations to the German legislature on whether and how to revise the HOAI, the authors analyzed the verdict and compared it with the current legal situation in Europe and especially in Germany. Furthermore, the paper contains information for contractors, engineers, and architects on how to deal with the new legal situation resulting from an analysis of former German court decisions in comparable cases. The conclusion is that Germany must react to the new development regarding the fees for construction planning services and should revise the German Official Scale of Fees for Services by Architect and Engineers (HOAI). Meanwhile, contractors and service providers may continue to agree to fees following the principles of the existing regulations laid down in the HOAI.

This case study investigates whether the adoption of practices related to integrated project delivery (IPD) process may bring about better performance of construction projects in Singapore. Data were collected using a structured questionnaire and analyzed using $t$-tests and correlation. It was discovered that some IPD practices related to people affect project performance positively, indicating the importance of carefully selecting project participants. When team members form collaborative relationships, fully share project information and cooperate to achieve common project objectives, superior project performance is observed. This study found some IPD practices related to the contract that may affect project performance negatively. For example, contracts that share cost savings and cost overruns tend to have poorer schedule performance. Certain IPD practices are significantly associated with project performance; thus, recommendations are provided on how to boost project performance.

Despite previously successfully delivery of toll roads through public-private partnership (PPP), inexperienced (new) markets are more susceptible to failures due to the complexities involved in this approach, which have created distrust in inexperienced road sector markets in considering implemention of PPP. These markets lack the identification of both potential failure reasons and factors that enable the successful implementation of PPP projects for the first time. Therefore, this study aims to identify possible failure reasons and enablers of PPP implementation in new road sector markets. To this aim, the study employed a comparative cross-case study aggregation technique on document data collected from PPP projects implemented without previous experience of partnership in the road sector, namely the Dakar-Diamniadio toll highway (DDTH) from Senegal and the Lekki-Epe expressway (LEE) in Nigeria. The analysis identified reasons that played important roles in the projects’ success and failure. The DDTH was successfully implemented through PPP due to the early formation of a legal and institutional structure, the hiring of advisory services, stakeholders’ consultation, government commercial viability gap financing, and the implementation of improved risk allocation mechanism to prevent transfer of macroeconomic risk to the end-users. These factors enabled the successful implementation of DDTH, whereas the same acted as the failure reasons in the LEE project, leading to its early termination. The result of this study may help inexperienced markets avoid project failures by taking mitigation measures at an early stage.

This paper presents a case study of a proposed regulatory future-proofing framework for the construction industry. The update to the crystalline silica standard by the Occupational Safety and Health Administration (OSHA) was selected and reviewed. The standard applies uniformly to the entire construction industry and experienced typical areas of regulatory uncertainties during the rulemaking process. The case study presents the organizational responses to the standard by two construction companies and a trade association. The study results demonstrate the importance of each process of regulatory future-proofing (i.e., horizon scanning, stakeholder engagement, risk and opportunity assessment, response strategy development, and compliance implementation) in proactive adaptation to regulatory uncertainties during the rulemaking process. Additionally, the results highlight several practices (such as robust communication with all relevant parties and allocating right-sizing resources) for effectively achieving implementation of regulatory future-proofing.