A REVIEW OF ARBITRATION AS A DISPUTE RESOLUTION TECHNIQUE

1. JIBRIL MUHAMMAD BASHIR
09/22094U/4
Email:jibriltsanyawa@yahoo.com

2. CHAPTER ONE: INTRODUCTION AND BACKGROUND
OF THE STUDY
Studies and research on the problems of the construction industry
(Latham 1994; Mema and Bower 1997; Egan 1998) have pointed
to some fundamental causes of project failure, one of which is the
proliferation of disputes are not resolved promptly, they tend to
drag on and escalate and can cause project delays, lead to claims,
require litigation proceedings for resolution, and ultimately
destroy business relationships. Conflicts are caused by the size
and duration of the project, the complexity of the contract
documents, changed conditions, poor communication, limited
resources, financial issues, inadequate design, labor issues, and
force majeure events. Because of these Conflicts the construction
industry is plagued by an increasingly adversarial atmosphere
existing between the owner and the contractor (Rhys Jones 1994;
Conlin et al. 1996; Mix 1997; Arditi et al. 1998; Steen and Mac
Pherson 2000).

3. The adversarial attitude prevalent on many projects undermines
the cooperation environment necessary for a successful project
and goes against the very nature of the collaborative nature of the
construction process (Harmon, 2001). Disputes in the construction
industry often involve the resolution of complex technical and
factual issues. The formal processes such as litigation may often
not be the best way of dealing with this type of disputes.
Traditionally, arbitration has widely been used, being even included
in standard contracts as a means of dispute resolution and has
been found to be cheaper and less time consuming than litigation.
Therefore, this study seeks to look into the usefulness of arbitration
method as a viable dispute resolution technique.

4. STATEMENT OF THE PROBLEM
Construction works vary from simple privately owned to very
large and complex schemes either owned privately or public
construction projects. These works are executed by single
individual builder to large construction firms. Due to the nature
and complexity of the construction firms and players in the
industry, disputes are generated between individual builders to
cooperate builders, between builders to engineers, and between
engineers to architects as well as construction managers to
constructors; between banks or financial institutions to the
construction firms or company. Most times, there disputes results
to litigation and court cases, for the purpose of the effectiveness
and efficiency in the construction processes, viable ways of
resolving the various disputes that are generated in the
construction sector or industry have become a researchable
issues and debate among the players in the industry.

5. Therefore, this study intends to look at the various techniques of
resolving disputes in the construction works and to review the
usefulness of arbitration as a viable technique for dispute
resolution in the construction works in Nigeria.

6. AIM AND OBJECTIVES OF THE
RESEARCH
AIM
The aim of this study is to review Arbitration as a dispute
resolution technique.

7. OBJECTIVES
To review the concept, types, sources and importance of
arbitration in the construction industry.
To examine the causes of disputes and conflicts in the
construction industry by consulting professionals on
complex projects.
To examine the theoretical framework of the Arbitration
theories for the arbitration concepts.
To examine the procedural stages involved in the
arbitration processes.

8. JUSTIFICATION OF THE STUDY
Amicable solution of conflicts and dispute is applicable on all
building projects and will reduce unnecessary wastage of
energy, money and time consumed during progression of
claims and liquidated damages. The result of this research will
enable the parties in construction industry to:
 Promote the requirement of Arbitration mechanisms in
setting dispute and conflicts.
 Broaden the scope of the stakeholder to exercise their right,
and fulfill their duties.
 Play constructive role in construction project execution
 Avoids and/or minimize disputes and conflicts.

9. SCOPE AND LIMITATION OF THE
STUDY
The study will be limited to building works and will focus mainly
for data acquisition and analysis on some projects within the
Northern part of Nigeria.

10. CHAPTER THREE: METHODOLOGY
DATA COLLECTION
The investigation was carried out through the use of
simple questionnaire administered to various
professionals in different organizations such as
consultancy offices and contracting firms. The
questionnaire were sent to the various organizations to
specifically sought for information which gradually and
systematically relates to wards causes of disputes and
the most efficient methods to resolve them.

11. ADMINISTRATION OF QUESTIONNAIRE
Questionnaire could be administered by post to the respondents,
personal disposition to respondents or groups and by interviews
(Fellows and Liu, 1997). Personal disposition was adopted for
administering the questionnaire. This involved administering the
questionnaire personally to the firms selected randomly. Due to
its suitability the method was chosen.

12. SURVEY METHOD
The nature of most qualitative researches such as this, involve asking
and obtaining answers to questions, interviews, observations and
case studies. The questionnaire method was chosen for this
purpose; because it has a wider application and can be administered
to a large number of respondents at minimal cost. The questionnaire
also saves time and it could be contain as many questions as
permissible. The questionnaire used for this research has closed type
questions with a set of predetermined responses. The questionnaires
were issued to architects contractors, arbitrators, quantity surveyors,
and engineers.
SAMPLE AND SAMPLING TECHNIQUES
The samples for this study were randomly selected from the
population. This method was to give equal chances to all the
respondents of being selected. A total of fifty (50) samples were thus
selected from the given population.

13. POPULATION OF THE STUDY
The population for the study involved all the architects,
engineers, arbitrators and contractors within Bauchi and its
environs.
METHOD OF DATA ANALYSIS:
The descriptive statistics involving the use of frequencies and
percentages were employed to analyze the data gathered
through the use of questionnaire.
METHOD OF DATA PRESENTATION:
Tables, chart, graphs and logical argumentation were employed
in presenting the analyzed data for effective understanding and
discussion.

14. CHAPTER FOUR:DATA ANALYSIS
PRESENTATION AND INTERPRETATIONS
In this research work titled “A Review of Arbitration as a tool for
dispute resolutions in the construction industry” comprises of fifty
carefully selected sampled respondents in the construction
industries. Their responses formed the basis of this chapter as the
data gathered were statistically analyzed for descriptive frequencies
and percentages.

15. DISCUSSION OF RESULTS/FINDINGS:
From the data analyzed above, the following were deduced
from the findings;
 That engineers and quantity surveyors are the major
professionals in the construction industry and this was as a result
of their roles in the whole project delivery system or process.
This was also a similar findings made by Seeley (1997). Who
affirmed that the professionals in executing construction projects
are the Engineers and the Quantity surveyors who process the
material specifications and cost of the project.
 This study also observed that, almost half of the respondents i.e.
Architects, Builders, Engineers, Quantity surveyors, Lawyers and
Arbitrators have been involved in cases of arbitration to settle
disputes. This have also been observed in the work of Wasiu
(2010), while he assessed damages in contract delivery system in
Nigeria, the study reached same conclusive as observed above in

16.  The study established that, more than three-quarter (3/4) of the
respondents find arbitration suitable or fairly suitable for dispute
resolution. The study provides a contrary view with respect to
the findings made in Chan (1992). Were over 60% of the
respondents prepare or found mediation as the most suitable
dispute resolution technique than arbitration.
 The study also deduced that, type of profession has no significant
effect on the level of respondents involvement in cases of
arbitration proceedings. This finding agrees with the findings
made by David (1988), which observes that there is no direct
correlation between type of profession and arbitration
proceedings or cases, but rather type of activities or transactions
involved.

17.  It is also deduced that, the number of years of working
experience has significant effect and determine the
respondents’ involvement in the arbitration proceedings. This
finding also agrees with the findings made by Dike (2008); in the
analysis of basic dispute resolution techniques in the
construction industry, observes a response of over 65%
establishing the relationship between years of experience or
practice with the involvement in arbitration cases or
proceedings in Nigeria construction industry.

18. CHAPTER FIVE: SUMMARY RECOMMENDATIONS
AND CONCLUSION
SUMMARY
A total of 50 respondents were sampled for this research work.
Arbitration is considered suitable and reliable by most of the
respondents for dispute resolutions even though some of them
claim they are not aware of it. Type of respondents profession in
the industry do not have significant effect in their insolvent in
the involvement in arbitration proceedings but years of working
experience has significant effect on level of involvement in
arbitration proceedings.

19. RECOMMENDATIONS
The following recommendations are hereby made:
 The chartered institute of Arbitrators (CIArb) should give
adequate legal backings and Funding towards arbitrations
proceedings panels.
 There should be adequate publicity of what arbitration
technique is because some respondents claim Ignorance of it.
 The merits of arbitrations techniques. For dispute resolution
over court cases be continuously Publicized.
 All stake holders, lawyers, judges, arbitrations, quantity
surveyors Architects and Engineers should regularly meet to
address the Limitations and demerits of arbitrations.

20. CONCLUSIONS
It can be suitable be concluded that the aim of this research have
been achieved and the merits of arbitration techniques for dispute
resolutions outweighs its demerits as its suitability outweighs its
unsuitability. Publicity of use, importance, relevance and low cost
implication of arbitration methods for dispute resolution should
however be pursued.