Multihybrid Dispute Resolution Framework for Projects of Downstream Sector of Petroleum Industry
Publication: Journal of Legal Affairs and Dispute Resolution in Engineering and Construction
Volume 13, Issue 4
Abstract
Disputes are inevitable in construction projects, and planning to manage them is considered as a significant problem of project contract management. In this knowledge area of project management, there are two distinguishable subjects: diverse types of disputes and different methods for addressing them. The main purpose of the current investigation is to recognize the most frequent disputes in projects of the downstream sector of the petroleum industry and the early assignment of the most appropriate alternative dispute resolution (ADR) methods to them in the precontract phase. For this purpose, available dispute resolution methods were investigated and some alternatives were selected. Concurrently, and based on the expert judgment, various types of disputes in these projects were categorized, and a dispute breakdown structure (DBS) is proposed. Finally, by mapping resolution options with potential disputes using the Delphi process, a multihybrid framework was developed for resolving disputes in the downstream sector of the petroleum industry in an appropriate and optimum way. This framework which should be translated to the contract legal language in practice and subsequently be inserted into construction agreement as a clause, potentially can be customized for various types of projects.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
All data, models, and code generated or used during the study appear in the published article.
References
Works Cited
Alaloul, W. S., M. W. Hasaniyah, and B. A. Tayeh. 2019. “A comprehensive review of disputes prevention and resolution in construction projects.” In Vol. 270 of Proc., MATEC Web of Conf. Paris: EDP Sciences.
Ambituuni, A., J. Amezaga, and E. Emeseh. 2014. “Analysis of safety and environmental regulations for downstream petroleum industry operations in Nigeria: Problems and prospects.” Environ. Dev. 9 (Jan): 43–60. https://doi.org/10.1016/j.envdev.2013.12.002.
Araujo, S., B. Safradin, and L. Brito. 2019. Comparative report on labour conflicts and access to justice: The impact of alternative dispute resolution. Paris: Framework Program of the European Union.
Arif, F., and F. Saeed. 2021. “Role of construction project documentation for effective arbitration process.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 13 (2): 4521006. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000466.
Awwad, R., B. Barakat, and C. Menassa. 2016. “Understanding dispute resolution in the Middle East region from perspectives of different stakeholders.” J. Manage. Eng. 32 (6): 5016019. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000465.
Bahadori, A., C. Nwaoha, and M. W. Clark. 2013. Dictionary of oil, gas, and petrochemical processing. Boca Raton, FL: CRC Press.
Book, F. S. 1999. Edition standard form of condition of contract EPC/Turnkey projects. Lyon, France: Fédération Internationale Des Ingénieurs-Conseils.
Brown, H., and A. Marriott. 2005. ADR principles and practices. London: Sweet & Maxwell.
Brown, J. 2018. “Interviews, focus groups and Delphi techniques.” Adv. Res. Methods App. Psychol. 2018 (1): 95–106.
Chan, E. H., H. C. Suen, and C. K. Chan. 2006. “MAUT-based dispute resolution selection model prototype for international construction projects.” J. Constr. Eng. Manage. 132 (5): 444–451. https://doi.org/10.1061/(ASCE)0733-9364(2006)132:5(444).
Chaphalkar, N. B., K. C. Iyer, and S. K. Patil. 2015. “Prediction of outcome of construction dispute claims using multilayer perceptron neural network model.” Int. J. Project Manage. 33 (8): 1827–1835. https://doi.org/10.1016/j.ijproman.2015.09.002.
Charrett, D. 2018. “Cost effective resolution of construction disputes.” In The application of contracts in engineering and construction projects, 241–247. Oxfordshire, UK: Routledge.
Chau, K. W. 2007. “Application of a PSO-based neural network in analysis of outcomes of construction claims.” Autom. Constr. 16 (5): 642–646. https://doi.org/10.1016/j.autcon.2006.11.008.
Cheung, S. O., and P. T. Chow. 2011. “Withdrawal in construction project dispute negotiation.” J. Constr. Eng. Manage. 137 (12): 1071–1079. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000388.
Cheung, S. O., P. T. Chow, and T. W. Yiu. 2009. “Contingent use of negotiators’ tactics in construction dispute negotiation.” J. Constr. Eng. Manage. 135 (6): 466–476. https://doi.org/10.1061/(ASCE)0733-9364(2009)135:6(466).
Cheung, S. O., T. W. Yiu, and H. W. Chan. 2010. “Exploring the potential for predicting project dispute resolution satisfaction using logistic regression.” J. Constr. Eng. Manage. 136 (5): 508–517. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000157.
Cheung, S.-O., and H. C. H. Suen. 2002. “A multi-attribute utility model for dispute resolution strategy selection.” Construct. Manage. Econ. 20 (7): 557–568. https://doi.org/10.1080/01446190210157568.
Cheung, S.-O., H. C. H. Suen, and T.-I. Lam. 2002. “Fundamentals of alternative dispute resolution processes in construction.” J. Constr. Eng. Manage. 128 (5): 409–417. https://doi.org/10.1061/(ASCE)0733-9364(2002)128:5(409).
Chong, H. Y., and M. Z. Rosli. 2009. “The behaviour of dispute resolution methods in Malaysian construction industry.” In Proc., IEEE Int. Conf. on Industrial Engineering and Engineering Management, 643–647. New York: IEEE.
Chow, P. T., F. Kong, and S. O. Cheung. 2012. “Mediating and moderating effect of tension on withdrawal-commitment relationship in construction dispute negotiation.” J. Constr. Eng. Manage. 138 (10): 1230–1238. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000528.
Clews, R. J. 2016. Project finance for the international petroleum industry. New York: Academic Press.
D’amour, O. J., S. Diang’a, and T. Kivaa. 2019. “Application of effective disputes resolution in construction contracts in Rwanda.” Int. J. Entrepreneurship Project Manage. 4 (2): 1–13.
Eggleston, B. 2019. The NEC4 engineering and construction contract: A commentary. New York: Wiley.
Elziny, A. A., M. A. Mohamadien, H. M. Ibrahim, and M. K. A. Fattah. 2016. “An expert system to manage dispute resolutions in construction projects in Egypt.” Ain Shams Eng. J. 7 (1): 57–71. https://doi.org/10.1016/j.asej.2015.05.002.
Eom, C. S., and J. H. Paek. 2009. “Risk index model for minimizing environmental disputes in construction.” J. Constr. Eng. Manage. 135 (1): 34–41. https://doi.org/10.1061/(ASCE)0733-9364(2009)135:1(34).
Faraji, A., M. Rashidi, and E. Sorooshnia. 2020. “An integrated organizational system for project source selection in the major Iranian construction companies.” Buildings 10 (12): 251 https://doi.org/10.3390/buildings10120251.
Fernandes, L. J., S. Relvas, and A. P. Barbosa-Póvoa. 2013. “Strategic network design of downstream petroleum supply chains: Single versus multi-entity participation.” Chem. Eng. Res. Des. 91 (8): 1557–1587. https://doi.org/10.1016/j.cherd.2013.05.028.
Fernandes, L. J., S. Relvas, and A. P. Barbosa-Póvoa. 2014. “Collaborative design and tactical planning of downstream petroleum supply chains.” Ind. Eng. Chem. Res. 53 (44): 17155–17181. https://doi.org/10.1021/ie500884k.
File, D. J. 2007. “United states: Multi-step dispute resolution clauses.” Accessed March 1, 2018. www.Wilmerhale.Com/UploadedFiles/WilmerHale_Shared_Content/Files/Editorial/Publication/File_Jason_IBAMediation_July07.Pdf.
Gad, G. M., S. N. Kalidindi, J. Shane, and K. Strong. 2011. “Analytical framework for the choice of dispute resolution methods in international construction projects based on risk factors.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 3 (2): 79–85. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000067.
Gad, G. M., J. Shane, and K. Strong. 2010. “Effect of culture on selection of dispute resolution methods in international contracts.” In Proc., Construction Research Congress 2010: Innovation for Reshaping Construction Practice, 909–918. Reston, VA: ASCE.
Gad, G. M., and J. S. Shane. 2012. “A Delphi study on the effects of culture on the choice of dispute resolution methods in international construction contracts.” In Proc., Construction Research Congress 2012: Construction Challenges in a Flat World, 1–10. Reston, VA: ASCE.
Gad, G. M., and J. S. Shane. 2017. “Culture-risk-trust model for dispute-resolution method selection in international construction contracts.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 9 (4): 4517020. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000242.
Gaum, T., and J. Laubscher. 2019. “The implementation of alternative dispute resolution methods by architectural practitioners in South Africa.” Acta Structilia 26 (1): 97–119. https://doi.org/10.18820/24150487/as26i1.4.
Golabchi, M., and A. Faraji. 2010. Project strategic management. Tehran, Iran: University of Tehran Press.
Golabchi, M., and A. Faraji. 2015. “Pre-project neuro-fuzzy decision support model for oil industry projects.” Ind. Manage. J. 7 (4): 837–860.
Gould, N. 1998. “Alternative dispute resolution in the UK construction industry.” In Proc., 14th Annual ARCOM Conf., 9–11. London: Association of Researchers in Construction Management.
Harmon, K. M. J. 2003. “Conflicts between owner and contractors: Proposed intervention process.” J. Manage. Eng. 19 (3): 121–125. https://doi.org/10.1061/(ASCE)0742-597X(2003)19:3(121).
Haugen, T., and A. Singh. 2015. “Dispute resolution strategy selection.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 7 (3): 5014004. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000160.
Hughes, W., R. Champion, and J. Murdoch. 2015. Construction contracts: Law and management. New York: Routledge.
Illankoon, I., V. W. Y. Tam, K. N. Le, and K. Ranadewa. 2019. “Causes of disputes, factors affecting dispute resolution and effective alternative dispute resolution for Sri Lankan construction industry.” Int. J. Constr. Manage. 19 (4): 1–11. https://doi.org/10.1080/15623599.2019.1616415.
Kermanshachi, S., B. Rouhanizadeh, and B. Dao. 2020. “Application of Delphi method in identifying, ranking, and weighting project complexity indicators for construction projects.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 12 (1): 4519033. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000338.
Keršuliene, V., E. K. Zavadskas, and Z. Turskis. 2010. “Selection of rational dispute resolution method by applying new step-wise weight assessment ratio analysis (SWARA).” J. Bus. Econ. Manage. 11 (2): 243–258.
Kumaraswamy, M. M. 1997. “Conflicts, claims and disputes in construction.” Eng. Constr. Archit. Manage. 4 (2): 95–111. https://doi.org/10.1108/eb021042.
Lee, C. K., T. W. Yiu, and S. O. Cheung. 2016. “Selection and use of alternative dispute resolution (ADR) in construction projects—Past and future research.” Int. J. Project Manage. 34 (3): 494–507. https://doi.org/10.1016/j.ijproman.2015.12.008.
Lee, C. K., T. W. Yiu, and S. O. Cheung. 2018. “Application of the theory of planned behavior to alternative dispute resolution selection and use in construction projects.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 10 (2): 4518003. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000252.
Leung, M., J. Yu, and Q. Liang. 2014. “Analysis of the relationships between value management techniques, conflict management, and workshop satisfaction of construction participants.” J. Manage. Eng. 30 (3): 4014004. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000208.
Li, K., and S. O. Cheung. 2019. “Unveiling cognitive biases in construction project dispute resolution through the lenses of third-party neutrals.” J. Constr. Eng. Manage. 145 (11): 4019070. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001707.
Li, T. H. Y., S. T. Ng, and M. Skitmore. 2013. “Evaluating stakeholder satisfaction during public participation in major infrastructure and construction projects: A fuzzy approach.” Autom. Constr. 29 (Mar): 123–135. https://doi.org/10.1016/j.autcon.2012.09.007.
Lisitsa, S., A. Levina, and A. Lepekhin. 2019. “Supply-chain management in the oil industry.” In Vol. 110 of Proc., E3S Web of Conf., 2061. Paris: EDP Sciences.
Mann, S. 2016. “Research interviews: Modes and types.” In The research interview, 86–113. New York: Springer.
Maqsoom, A., S. J. Wazir, R. M. Choudhry, M. J. Thaheem, and H. Zahoor. 2020. “Influence of perceived fairness on contractors’ potential to dispute: Moderating effect of engineering ethics.” J. Constr. Eng. Manage. 146 (1): 4019090. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001740.
Mashwama, X. N., C. O. Aigbavboa, and W. D. Thwala. 2016. Construction stakeholders’ perception on alternative dispute resolution in the construction industry of Swaziland. Serbia, Balkans: Global Network for Socio-economic Research and Development.
McGeorge, D., K. London, P. Love, P. Davis, M. Jefferies, P. Ward, and B. Chesworth. 2007. “Dispute avoidance and resolution a literature review.” In CRC for construction innovation rep, 1. Sydney, NSW: Cooperative Research Centre.
Menassa, C., and F. Peña Mora. 2010. “Hybrid model incorporating real options with process centric and system dynamics modeling to assess value of investments in alternative dispute resolution techniques.” J. Comput. Civ. Eng. 24 (5): 414–429. https://doi.org/10.1061/(ASCE)CP.1943-5487.0000044.
Mian, M. A. 2011. Vol. 1 of Project economics and decision analysis: Deterministic models. Tulsa, OK: PennWell Books.
Mishra, A. K. 2018. “Dispute resolution practice of project management in Nepal.” Adv. Res. Bus. Law and Tech. Manage. 1 (4): 1–11.
Mistelis, L. 2003. “ADR in England and Wales: A successful case of public private partnership.” ADR Bull. 6 (3): 53–55.
Mitropoulos, P., and G. Howell. 2001. “Model for understanding, preventing, and resolving project disputes.” J. Constr. Eng. Manage. 127 (3): 223–231. https://doi.org/10.1061/(ASCE)0733-9364(2001)127:3(223).
Ock, J. H., and S. H. Han. 2003. “Lessons learned from rigid conflict resolution in an organization: Construction conflict case study.” J. Manage. Eng. 19 (2): 83–89. https://doi.org/10.1061/(ASCE)0742-597X(2003)19:2(83).
Ogunlana, S. O. 2010. “Beyond the ‘iron triangle’: Stakeholder perception of key performance indicators (KPIs) for large-scale public sector development projects.” Int. J. Project Manage. 28 (3): 228–236. https://doi.org/10.1016/j.ijproman.2009.05.005.
Rao, K. P. C. 2013. “Online dispute resolution.” Circuit Monthly News Magazine of ICWAI, May 8, 2013.
Ross, W. H., and D. E. Conlon. 2000. “Hybrid forms of third-party dispute resolution: Theoretical implications of combining mediation and arbitration.” Acad. Manage. Rev. 25 (2): 416–427. https://doi.org/10.5465/amr.2000.3312927.
Safapour, E., S. Kermanshachi, S. Kamalirad, and D. Tran. 2019. “Identifying effective project-based communication indicators within primary and secondary stakeholders in construction projects.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 11 (4): 4519028. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000332.
Safapour, E., S. Kermanshachi, T. Nipa, and S. Kamalirad. 2019. “Investigation of conflict impacts on engineering, procurement, and construction schedule performance.” In Proc., 7th CSCE Int. Construction Specialty Conf., 12–15. Laval, QC, Canada: Canadian Society for Civil Engineering.
Shrestha, K., and P. P. Shrestha. 2020. “Framework development of performance-based striping maintenance contracts.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 12 (2): 4520014. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000385.
Shrestha, K. K., and P. P. Shrestha. 2019. “Change orders on road maintenance contracts: Causes and preventive measures.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 11 (3): 4519009. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000299.
Siwi, R. G., F. Aljumah, J. Li, and X. Xao. 2018. “Optimal strategic planning of integrated petroleum and petrochemical supply chain.” In Vol. 43 of Computer aided chemical engineering, 1201–1206. Amsterdam, Netherlands: Elsevier.
Song, X., F. Peña-Mora, C. C. Menassa, and C. A. Arboleda. 2012. “Insurance as a risk management tool for ADR implementation in construction disputes.” J. Constr. Eng. Manage. 138 (1): 14–21. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000401.
Teo, E. A. L., and A. A. Aibinu. 2007. “Legal framework for alternative dispute resolution: Examination of the Singapore national legal system for arbitration.” J. Civ. Eng. Educ. 133 (2): 148–157. https://doi.org/10.1061/(ASCE)1052-3928(2007)133:2(148).
Tweeddale, A., and K. Tweeddale. 2005. Arbitration of commercial disputes: International and English law and practice. Oxford: Oxford University Press.
Vaux, J. S., and W. M. Kirk. 2018. “Relationship conflict in construction management: Performance and productivity problem.” J. Constr. Eng. Manage. 144 (6): 4018032. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001478.
Yiu, T. W., S. O. Cheung, and L. Y. Siu. 2012. “Application of Bandura’s self-efficacy theory to examining the choice of tactics in construction dispute negotiation.” J. Constr. Eng. Manage. 138 (3): 331–340. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000403.
Yiu, T. W., and Y. M. Law. 2011. “Moderating effect of equity sensitivity on behavior-outcome relationships in construction dispute negotiation.” J. Constr. Eng. Manage. 137 (5): 322–332. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000290.
Yiu, T. W., and H. K. Lee. 2011. “How do personality traits affect construction dispute negotiation? Study of big five personality model.” J. Constr. Eng. Manage. 137 (3): 169–178. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000271.
Yudhantaka, L., K. Lutfias, and H. Edi. 2019. “Mediation-arbitration: A proposal for private resolution of flats disputes in perspective of Indonesian law.” J. Leg. Ethical Regul. Issues 22 (2): 1–8.
Information & Authors
Information
Published In
Journal of Legal Affairs and Dispute Resolution in Engineering and Construction
Volume 13 • Issue 4 • November 2021
Copyright
© 2021 American Society of Civil Engineers.
History
Received: Jun 21, 2020
Accepted: May 3, 2021
Published online: Aug 2, 2021
Published in print: Nov 1, 2021
Discussion open until: Jan 2, 2022
ASCE Technical Topics:
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.
Cited by
- Amir Faraji, Maria Rashidi, Navid Ahmadi Eftekhari, Srinath Perera, Saba Mani, A Bid/Mark-Up Decision Support Model in Contractor’s Tender Strategy Development Phase Based on Project Complexity Measurement in the Downstream Sector of Petroleum Industry, Journal of Open Innovation: Technology, Market, and Complexity, 10.3390/joitmc8010033, 8, 1, (33), (2022).
- Payam Rahnamayiezekavat, Ehsan Sorooshnia, Maria Rashidi, Amir Faraji, Sherif Mostafa, Sungkon Moon, Forensic Analysis of the Disputes Typology of the NSW Construction Industry Using PLS-SEM and Prospective Trend Analysis, Buildings, 10.3390/buildings12101571, 12, 10, (1571), (2022).
- Amir Faraji, Maria Rashidi, Tahereh Meydani Haji Agha, Payam Rahnamayiezekavat, Bijan Samali, Quality Management Framework for Housing Construction in a Design-Build Project Delivery System: A BIM-UAV Approach, Buildings, 10.3390/buildings12050554, 12, 5, (554), (2022).
- Amir Faraji, Maria Rashidi, Srinath Perera, Bijan Samali, Applicability-Compatibility Analysis of PMBOK Seventh Edition from the Perspective of the Construction Industry Distinctive Peculiarities, Buildings, 10.3390/buildings12020210, 12, 2, (210), (2022).
- Paola Provenzano, Giuseppe Iddas, Optimizing the More Effective Dispute Techniques in the Contract Phase to Find the Best Dispute Resolution, Forensic Engineering 2022, 10.1061/9780784484548.100, (953-959), (2022).