[Music] problem in this regard is that I see a lot of I a lot of challenges when it comes to my name is Ahmed Elnaggar and this is Monday Legal good morning as you know every week I invite a guest the guest is a friend of mine is a very special guest is Mr Mohamed Bayad he is uh working for the engineering office as the Director of procurement and contracts and he is a mediator and a contracts expert thank you very much for coming and attending with us for Monday legal please to meet you director of procurement contracts mediator and contract management uh expert it's a long awaited meeting actually I've been trying to arrange this uh for the past couple of months I understand that we are you you're you're always busy and it's not very easy to work for the it's a it's a it's a Hot Topic and and and and very interesting uh for me for the past let's say 15 years in the in the uua as dedicated only to uh focus on the uh Mysteries and the resolve the puzzles of that topic which is uh construction disputes that's why I name the uh discussion today as uh way to resolve back in 2013 I I registered in MSC in construction law and disput resolution in British University in duai just to study the construction uh construction law and that was the first module I finished this module and I quit that MC I quit mainly because of King's College has withdrawn their association with the British University in Dubai for so many reasons but I got what I wanted to take out of the five modules instead of continuing to the MSC later on um I joined the CIA ARB Charter Institute of arbitrators to study mediation there is something missing actually what is known in whole of the world up to let's say one year ago because there's a shift currently we are practicing in the market and seeing so for the past 10 years let's say uh you'll always see arbitration or litigation are the only two methods to settle the disputes first arbitration is a well-known procedures and the arbitration award is recognized by court and that's it or else the uh litigation procedures so you find the customers currently they don't want to get exposed by going to court to settle any dispute they have only one way which is arbitration because of the process itself so it became it became a legal practice that everyone should e either if the the conflict is is dispute is a small value just leave it because they don't want to spend 500,000 or 1 million to get to a decision where the dispute is on 1 million Dirham itself and especially here for example the way International arbitration Center diak you pay 5050 100,000 100,000 then again you top up top up top up1 arbitrator or uh end up paying a very high amount but what about handling such disputes with cour because the cour has the right to um appoint an engineering expert and the engineering expert will be uh uh uh qualified professional or a company who will have this uh this this case to study and then they will give their opinion I I understand that it can take also years in court but I think as a process ER it exists you know go to see a lot of conflicts going to court more than arbitration or you find arbitration having much more uh percentage of these conflicts uh arbitration is the more percentage actually see it depends on the disputed parties whether the some of them they some of the developers they don't want the name to come in the court or in the newspaper or in the social media that there's a because the market here to certain extent in Dubai is well known so it depends on the uh on the dispute itself or the or the both parties but in most of the cases they go arbitration because it's confidential IM now when you talk about arbitration go for 16 or 18 month as minimum duration to settle on the other hand you go to court the court will appoint the court expert and since February 2021 Dubai cour for example um um uh the claimant should uh uh uh uh attach with his claim um a report from um a consultant of that independent exper independent expert report as part of the uh PL documents or the case documents and that will be subject to the review of the Court expert the court expert may give you unfortunately actually we are telling I've seen so many court expert determinations which are technically I'm not telling legally it's technically or from engineering or contract Administration perspective are wrong that may lead to wrong Judgment at the end of the day wrong judgment already then you go to the court of appeal and then and then again it may not settle and move from that Court to that court and at the end of the day you may spend three uh three years there's always there's always a huge gap between the client and the consultant let's say the whoever is monitoring the project itself and there's um there's a phase where the trust is broken because of delay or because of different materials or because of uh of of anything that that can happen between the client and the consultant or the contractor and when this link is broken we always come in the picture like I'm going to send you my lawyer so the lawyers come legal notices start to be thrown uh in front of each other and then um we try as much as we can to tr to put the parties together to settle and in most cases both parties have an engineer have an expert in the room but they still not able to to find a solution an amicable solution why do you think this is happening since you're saying the technical part is needed this is happening see um what is Right remains right there is no point to to get the two parties already and see if the claim is an x amount you divide it by 50% and 50% and settle shake hands finished nobody will do this except very and in case they have future engagement and some other projects they might SED to that to that extent you have to explain and convince both parties that the real entitlement is this value and real entitlement is this value in case it's a Quantum already to be finalized from that perspective from that from that perspective but that's this will come the the the the mediation or or or negotiation or adjudication or or or or conciliation will take place for example adjudication or many trial it is a normal process similar to arbit adjudication is is similar to court procedures and TR similar to the arbitration procedures which is both actually are similar that require third party uh opinion so let's go back to the reasons now the Consultants are not aware that which alternative disput resolution that needs to be used here in order to settle that uh dispute uh plus the market initiations also because arbitration is the only thing recognized by Court as binding on both parties through the arbitration award the court will check process normal process that has been followed already take tick tick yes yes yes no confid confidentiality whatever like that they have four or five this one and at the end of the day agree the arbitration award is like that they enforce it in case either party is not willing to to accept all other alternative dispute resolutions out of six or seven others other methods are not recognized by Court until it's binding it's here we are talking about something you know the difference between third party opinion and third party determination so the solution is that you made the other alternative dispute resolution being used as a determination not only an OP so it become binding already and both parties will sign and in case this third party come to a conclusion that 1 2 3 4 we sign that we abide by this decision that it becomes binding on both parts which is the current direction already of the whole Market because of the weight and unnecessarily cases that are going to court that had extra burden impact on the legal system of the country itself and that's uh worldwide but is in very similar to what the arbitration is doing because that arbitration is binding for the parties yes yes of course but mediation for example is shorter duration with less uh process uh and introduction settings separate uh one meeting both parties separate meeting uh uh uh comments uh uh discussions again sharing opinions separate meetings discussions again both meetings already then the things by the time you show both part is the missing part and convince them that this is your real entitlement because of 1 2 3 4 the guys will agree will agree and will cancel if the arbitration is ongoing they will cancel the arbitration or cancel the case in the court and that's it and they will shake hands in the meeting itself so that's why come that's that's where the contract administrators or contract managers role comes as essential already to manage also the construction disputes that's always where I keep on asking myself who really should manage and lead the construction dispute is it a professional contract administrator with with with with reasonable legal background or or qualified uh lawyer for construction disputes and as an engineer from after 10 years searching in this field I put my opinion in the first option of course with no doubts with no doubt especially if you have a proper legal background that requires the uh uh guidance to uh take the proper decision because construction disputes are in nature 90% of technical perspective and maybe 5 to 10% of legal uh uh uh uh legal perspective and by the time lawyers actually come to the picture the two both parties they don't talk even to each other unless through the lawyer and everyone is afraid to make a mistake and all like this and it's not like that that could be the the dispute could be on a small value but and the solution is there and it became became an issue it became an issue and prolonged different things like you know maybe both parties they have a different another project and the client or the employer for example hold the payment for the contractor the project will get suspended uh awaiting the uh Judgment of the court or the arbitration award in order to cover the remaining amount they found different solutions already they find different subcontractors will will will get stuck with the payments and so on and especially if the company is is huge is a huge contractor or one of the pillars in the market it becomes a real real isue affect different subcontractors or suppliers in the market and I've seen this it is very difficult to imagine that the client or the customer in the end is going to give the conflict into the to in in the hands of the contracts administrator with an engineering background whenever there's a conflict because whenever there's a conflict is already understood that there's a deadlock so they need the lawyers to come in everybody have to flex with the legal knowledge and uh see where it take us yes in the middle of the dispute we can look at the numbers uh will then come to the technical side and and say where we take your opinion and so on you agree otherwise you think that the technical expertise and the contract administrator should take over before the lawyers gets involved see you have two scenarios or you have that scenario is the one applicable or available is when the conflict is not resolved and became a dispute by the time the lawyers are involved already or arbitrators the matter is already very complicated and and and it gone by force to certain direction where F found the solution for this by uh by by providing uh da daap which is uh dispute avoidance adjudication board uh within the contract itself at the beginning at the time the the the both parties employer and Main contractor for example uh sign the agreement you find the dispute avoidance adjudication board does it make a difference does it make a big difference value of the project where you would give a different recommendation on the alternative dispute resolution so would you say a a project of a 100 million uh dollar is different than a project of 100 million Dam and then there is a different uh alternative dispute resolution mediation or anything else uh it doesn't uh it is a nature of the conflict or a dispute then then then you propose the cable alternative dispute resolution to to settle applicable to the dispute itself not related directly to the value of the project or value of the dispute EV I used to tell the pace of the uh construction work in the in this part of the world let's say is not matching the proper way to settle the disputes and that the the the the measures being taken for dispute settlement are the same since 50 years and now so uh so this has to be changed because you cannot change the uh the construction process through specific mechanism to match the way to settle the dispute if the dispute is there that's why they they always call the mediation close and the dispute management closes in the contract as midnight closes when a midnight closes you'll find that two lines describing the method of managing the disputes and that's it they don't talk about the arbitration or they don't provide any alternative dispute resolution you don't have dispute avoidance adjudication board in the contract specified Institute itself you don't uh specify the uh seate of arbitration uh the law of uh arbitration governing law of arbitration and the contract you don't find those details and at the end of the day when uh when when when you're talking about project that require let's say involvement of an international arbitration or something and at that time you may get stuck if your contol doesn't support you and you end up a different story all together but uh the solutions are always there it depends on which mechanism to of the alternative dispute resolution to uh uh adapt really that's the best uh uh uh method to uh uh resolve this that specific dispute that's it with L people in the market knowing this at this point of time it makes it makes it difficult also to uh to reach to a settlement yeah does it put a heavy weight on the legal system itself I can imagine if there are if every single construction uh obstacle uh will will come to a conflict then the court will be overwhelmed and the arbitration Center will be overwhelmed with the number of cases that is unlimited and of course each of these cases will need to protocol all the procedures a step by step and then it goes to mediate to to the expert level and so on so forth and I can imagine that the court uh cost of this on the economy is quite High plus the cost of the losses that's happening because of the yes construction itself and I I can imagine that the mediation could be a solution not just to save money for the both parties and an employer Construction company on consultant and so on they could actually help the economy in general to Le lose less money in in in the process which is a a good way do you see do you see more and more um uh that the market is developing in this uh regard do you see that the so that direction we I saw the market Improvement since almost a year uh towards that direction to minimize and try to explore different options to settle rather than arbitration and litigation and this happening by the big developers or across board it's it's government initiation in the first place you see the governments or the uh courts already uh uh having um service level agreement with the specific engineering uh Consultants firm with firms and all no I meant the was would the developers enforce this with the construction contracts that they have that they put these Clauses with alternative dispute resolution measures as the first step or this is something that the government already is forcing it is different from one uh developer and and and another depends on his awareness and up to what extent he suffered let's say from eara back days and construction uh disputes and his experience and exposure as well confident confidentiality is an important factor and strength of his qualified Engineers already or contract administrators and all the answer to your first question we find right so actually almost 50% of the cases that are going to uh escalated to lawyers to settle or arbitration or uh to court or litigation should not be even escalated to lawyers at the first uh at the first place because the settlement is there and and neither party is well aware uh uh through the less through less because of less experience of his uh uh third party consultant or his specific own team to manage the dispute to a reasonable uh can you give me an example of something that is a bit technical you don't have to tell me a technical part but something that maybe the employer the construction um uh company as well as the lawyer wouldn't be able ble to manage without having a mediator who have a technical experience in the middle I can understand that might be a bit technical but just a easy example tell me what could be the conflict resolved Easier by a mediator see we discussed the reasons for the uh uh conflicts in construction disputes the main reason for example would be the extension of time that's why it's it require yes specific specialization from engineering perspective I mean and uh and and prolongation cost with cost or with cost or without cost uh you find liquidated damages applied you find the delay and payment by the uh employer I find so many reasons that all of them together could be there already in a complicated manner with insurance and all and legal also breach uh breaching the cont some other some other contract uh commitments or liabilities and all having someone with technical expertise together with contracts and as well as have seen a lot of uh uh disputes uh being resolved uh is is going to be very uh important and actually uh beneficial for both parties in the conflict and of course I always advise to to to go for mediation before uh before arbitration or before uh courts because I think in courts no one wins so I think outside of court is um settlement is always a smart way to to go about something like that so whenever there is a a dispute on the horizon uh what would you advise uh the uh the conflicting uh parties to do would you advise immediately to go to mediation or immediately to go to um um um the alternative dispute dispute resolutions like what you mentioned and before before they go to arbitration or course what would be the first step that they need to do it's not uh it's not mandatory or or it's not common in the market that every employer should have his own Qs team to manage the contracts or construction contracts uh for them with the recent Market initiations initiation you find um um uh Consultants from engineering background that firm is made only to manage dispute or construction disputes up to the resolution uh stage uh every employer should uh have a collaboration or or or or or an agreement with certain uh companies for his construction projects those people they they advice from engineering perspective or contract management perspective avoiding all the resol all the conflicts and if the conflict is not sorted out or or uh it led to a dispute they manage to resolve the dispute without arbitration or without even mediation or they process the mediation itself because there dispute is there without even going to court and all like this well thank you very much for your contribution and for your time we're very happy to have you here I'm so happy to come and uh wish to see you again on different topics uh just keep me exploring the market and all like this and within upcoming few month I'll come back to you with the updated ideas and directions inshallah thank you so much it's amazing well this is your dose from Monday legal see you next week