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DEVELOPMENT OF A FRAMEEWORK FOE EFFECTIVE CONSTRICTION ARBITRATION: A COMPARATIVE CASE STUDY OF CONSTRICTION DISPUTES IN KENYA
Disputes have become a common problem afflicting the construction industry and they have the tendency to cause undesirable effects if not effectively resolved. Such effective resolution requires timely and economical resolution, with final outcomes that are satisfactory to the disputants involved. Arbitration has for a while been the preferred resolution method. However, it has recently been the subject of discussion both in industry and academia because of incessant delays, high costs and increasingly unacceptable awards. Although studies have attempted to identify the various causes of ineffective arbitration, they have not only been descriptive but also relied on anecdotes and subjective opinions. Consequently, the studies’ findings have little explanatory power, making it difficult to confront the underlying causes of arbitral ineffectiveness. The aim of this comparative case study was to develop a framework for effective arbitration of construction disputes in Kenya. A review of the related literature brought out ten determinants of arbitral effectiveness, including award favourability, perceived award fairness, perceived procedural fairness, perceived quality of the decision-making process, perceived quality of treatment, perceived adequacy of the size of the tribunal, approaches to the presentation of evidence, competence of the tribunal, distribution of control and complexity of the dispute. These factors were conceptualised into a structural model. Qualitative data collection and analysis were then undertaken to establish the relationships among the factors. Thirteen semi-structured interviews of participants in five construction disputes in Kenya helped to explain the factors influencing the effectiveness of construction arbitration, which formed the basis upon which the framework was developed. Pattern-matching analysis helped to reveal that out of the ten identified factors, only award favourability was found to directly influence arbitral effectiveness. Four other factors including the approaches to the presentation of evidence, the competence of the tribunal, distribution of control and complexity of the dispute also influenced arbitral effectiveness among the cases, but through award favourability. In this study, the researcher makes a distinct contribution to knowledge by demonstrating that award favourability and the control model of procedural justice are the components of organisational justice that did influenced arbitral effectiveness in the cases studied. Thus, disputants in the cases were more interested in material gains than in maintaining and sustaining their business relations, explaining why the awards were challenged, hence straining their relationships. This instrumental nature suggests that these disputants were less interested in fairness of the process and its outcome, explaining why the influence of award fairness, procedural fairness and interactional justice on arbitral effectiveness was not supported. Despite the ineffectiveness of the cases, participants maintained that they would still refer future construction disputes to arbitration, mainly because of its procedural and interactional justice. Finally, a schematic framework was synthesized from the data analysis results. The framework requires implementation of institutional, legal and policy interventions for effective construction arbitration. The proposed interventions include a review of the training curricula to impart soft skills on effective construction arbitration, review of the arbitration rules, standing panels to match arbitrators to the various case complexities and the need for arbitrators to proactively manage their cases. There is also a need for disputants to customize the dispute resolution clauses during the contract drafting stage to incorporate desired
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