Resolution of construction disputes through institutional arbitration in Ethiopia: The practice and legal challenges.
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Date
2020-12
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Addis Ababa Unversity
Abstract
Construction is a large, dynamic, complex and a very vital sector of economy in many countries.
The industry has started to play a vital role for developing countries as they are considerably
dependent on the growth and development of physical infrastructures. Similarly, the sector is a
corner stone of the economy for Ethiopia. The complex nature of the construction industry and
the existence of various players in the sector such as owners, suppliers, financiers, designers,
contractors, consultants, employer representatives, sub contractors and other sector actors have
made disputes in the industry normal and sometimes inevitable. Furthermore the sector
transactions and disputes have peculiar features than any other sectors of commercial business.
The sector transaction and dispute involve larger amount of money having multiple interested
parties with independent contractual relationships and multiple claims and contain large volume
of documents. Due to the inevitability of dispute in the sector, crafting an appropriate mechanism
of dispute resolution has been considered as a significant task. The resolutions of the
construction sector dispute mainly require skilled and experienced expertise and demand rapid
resolution of disputes for the success of a project. A judge who is trained only in law without
having the required knowledge and experience of construction sector works will not be able to
understand the technically complex disputes of the sector. Moreover, resolving disputes
occurring in the construction sector in time, swiftly and professionally contributes for the
successful completion of projects with allocated budget, time and quality. Due to this various
alternatives and on site dispute resolution mechanisms such as Dispute resolution advisor,
Dispute review board, Dispute adjudication board, negotiation and arbitration are in place in
different parts of the world to ensure justice and efficiency in resolving the sector specific
disputes. At international level arbitration is highly advocated as the most efficient means of
dispute resolution for construction disputes than the formal adjudication system. To assess the
practice and challenges of construction dispute arbitration of institutional arbitration centers in
Ethiopia, both legal framework and the institutional practice of Arbitration centers are analyzed
by the study. However, in Ethiopia the practice of institutional arbitration is not considerable and
well developed and the existing arbitration laws are not also comprehensive to fit the rapidly
growing construction sector business and associated disputes. Therefore, enacting
comprehensive legal framework, policies and establishing strong arbitration centers which serve
the country and the rest of the world is suggested as major recommendation.