Mediating in Marine Construction and Dredging Works

Marine construction and dredging is a unique industry within civil engineering. As there are few major players and the industry has its own distinctive concerns, there is a general appetite for amicable dispute resolution that has created a mediation environment vastly different from that seen in other industries.

In this feature, Kunal Mishra discusses the necessary considerations for resolving disputes in this sector, along with a broader history of ADR in the United Arab Emirates and the Middle East.

Can you please outline the overall process involved in mediation in the UAE jurisdiction?

Mediation is a less formal, more flexible, time-bound, cost-effective alternative dispute resolution (ADR) process. The typical mediation process that I observed in the UAE comprises the following stages:

  1. Opening statement by the mediator: Here the mediator makes an opening statement in which they introduce themselves and allow the parties to do the same. They outline the mediation process and its rules to run it smoothly. The aim is to build a constructive environment conducive to mediation.
  2. Opening statements by the disputants: Here the parties to the dispute describe the facts relating to the dispute and its consequences.
  3. Joint discussion: Here the mediator provides each party with an opportunity to explain their case and understand each other’s perspectives and concerns. The mediator encourages communication between the parties and ensures that each party feels heard.
  4. Private session: Here the parties are given the opportunity to speak privately with the mediator in order to learn about their underlying interests. The goal is to encourage parties to brainstorm and find common ground by exploring options.
  5. Negotiation: Here the mediator leads the negotiations with the parties by collecting ideas, proposals and counterproposals to help the parties come to a negotiated settlement of the dispute.
  6. Closure: If the parties reach an agreement, the settlement agreement will be drafted and each party will sign it.
What are the key statutes relating to mediation of marine construction and dredging works disputes in UAE and internationally?

Mediation has its origins in UAE culture through the concept of ‘sulh’ (reconciliation). On 29 April 2021, the UAE issued a landmark decision to implement Federal Law No. 6 / 2021 “Mediation for the Settlement of Civil and Commercial Disputes” (“Mediation Law”). This law provides a holistic and robust structure for mediation practices in the UAE. Historically, parties have shown an unwillingness to use mediation since there has been a longstanding lack of a robust legal framework and concerns about ‘without prejudice’ communications. These issues were initially undermining parties’ confidence in the process. However, the enactment of the Mediation Law has resolved these issues, and it upholds ‘without prejudice’ communications. Abu Dhabi Global Market Courts also launched their court-annexed mediation services in 2019. All such statutes or services are also applicable to the mediation of marine construction and dredging works disputes in the UAE.

Historically, parties have shown an unwillingness to use mediation since there has been a longstanding lack of a robust legal framework and concerns about ‘without prejudice’ communications.

The UAE Mediation Law deals with two types of mediation regimes, i.e. judicial and non-judicial mediation (Chapters 2 and 3 of the Mediation Law). Judicial mediation commences after the parties refer the matter to the court. If parties agree to mediation or the court decides at any stage of the proceeding that mediation is necessary, the court refers the matter to an appointed mediator. Non-judicial mediation commences before parties opt for litigation. Here, the parties can directly contact the centre to commence mediation with a particular mediator.

On an international level, in Saudi Arabia, the SCCA provides mediation services through its rules modelled on the ICDR-AAA Rules. In Qatar, Law No. 20 of 2021 on Mediation encourages mediation. In India, there is court-referred and private mediation. In the UK, the court is empowered to encourage mediation, provided both parties consent to it. Whereas in Australia, the court can compel parties to opt for mediation irrespective of their consent.

In your experience, what marine and dredging matters are most commonly tackled through mediation and ADR more broadly?

The marine construction and dredging industries have developed much faster throughout the world in the last three decades. With the greater degree of complexity, stringent technical specifications of reclamation works, lack of strict compliance with environmental authorities and involvement of multiple stakeholders in projects, the parties experience many disagreements that lead to disputes. In my experience, these dispute matters generally relate to errors in design, quality issues of reclamation, adverse site conditions, poor contract administration, variation in scope, delayed payments and delays more generally. As the dredging operations are inherently risky, the occurrence of commercial and operational types of disputes is prevalent.

I see that mediation is not suitable for all kinds of disputes. Mediation will be inappropriate when the dispute relates to establishing a legal precedent, if one of the parties is absent, or if that party has no interest in reaching a settlement. Furthermore, some disputes may be resolved by arbitration when parties feel that the court procedures would be time-consuming and expensive and their goal is to have a final and binding decision with limited appeal.

Mediation can only proceed when the two parties agree to it, have a clear case, want a good business relationship and wish to have a neutral opinion on a question of genuine conflict.

The marine construction and dredging industries have developed much faster throughout the world in the last three decades.

Are there any unique considerations to be taken into account when beginning mediation in marine construction and dredging works?

Yes, absolutely. I would advise all parties that, before commencing the mediation, they should first assess whether mediation is suitable for their particular dispute. They should also check the timing of the mediation in relation to the stage at which the dispute has reached. Often, in the case of complex issues, an early mediation may be more successful than a mediation that occurs later.

It is advisable to select an experienced mediator skilled in the mediation process, familiar with the industry, and in whom both parties have complete trust. It would be pertinent to quote Mahatma Gandhi’s experience when he settled a case by way of ADR: “Both were happy with the result, and both rose in public estimation. I had learnt the true practice of law. I realised that the true function of a lawyer was to unite parties riven asunder”.

It is also important to evaluate if there is a need for more than one mediator if the dispute relates to a complex matter requiring technical advice by co-mediators or if the parties belong to different nationalities with diverse cultural practices. Since mediation is an interest-based negotiation and aimed at protecting the parties’ relations, it is expected that parties should shed their totalitarian instincts during the process.

How have you witnessed mediation in marine construction and dredging matters develop during your time as a practitioner?

The recent developments in commercial mediation in the UAE, such as the Mediation Law and ADGM’s court-annexed mediation, have paved the way for mediation to become popular. It is my opinion that these developments are encouraging parties to opt for mediation and that this will help them to appoint a talented and impartial mediator to resolve the dispute in marine construction and dredging industry matters in the UAE.

Since this industry is unique and because there are so few players, I have experienced that the parties always try to settle their disputes through mediation to protect their business interests. Furthermore, I have noted that the parties have great respect for the mediator and they try not to withdraw from the mediation process. These peculiarities are unique to marine construction and dredging matters in the UAE. There are still some ongoing developments happening to strengthen the process, which we will see soon. In light of these ongoing developments, I can see that mediation continues to be the preferred method for settling disputes since many contracts in this industry include mediation provisions.

In March 2022, the UAE decided to join the Singapore Convention on Mediation to accelerate international business and encourage mediation as a means for dispute resolution – another significant development.

In your view, what new trends will soon take hold in this sector?

The UAE Mediation Law allows for the establishment of mediation centres in the UAE through obtaining the requisite licenses. As there are no supplementary regulations related to the licensing of mediation centres and the registration of mediators (Articles 4 and 25 of the UAE Mediation Law), I hope that these will be issued soon. This law also stipulates certain limits related to the involvement of a mediator, such as that they are prevented from testifying for or against a party to a mediation. Therefore, the Code of Business Conduct for Mediators will be released soon. It is hoped that the mediation centre will create a model mediation agreement in both English and Arabic to help the industry manage the mediation process more efficiently while remaining compliant with the law.

All such pending developments are expected to progress quickly in the near future with the strong support of the UAE leadership, encouraging parties to choose mediation.

 

Kunal Mishra, Contracts Engineer

National Marine Dredging Company

ICAD I, Mussafah Street 16, Abu Dhabi, UAE 3649

Tel: +971 564-484-354

E: kunalmishra61@gmail.com

 

Kunal Mishra is a Fellow of the Chartered Institute of Arbitrators, UK, a civil engineer, and a contract engineer working for the National Marine Dredging Company in Abu Dhabi, UAE. He is responsible for managing all kinds of pre and post-contract matters related to marine and dredging work and advising the project team on measures to be taken to avoid disputes. With over 13 years of experience in the international construction industry, he has worked on many large-scale and complex infrastructure projects, successfully managing high-value claims and amicably resolving complex contractual matters and disputes.

The National Marine Dredging Company was established in Abu Dhabi in 1979 and is one of the leading semi-governmental companies working in dredging, reclamation, and marine construction projects in the Middle East. As a contracting company, it has successfully completed landmark projects with the support of its impressively large fleet of dredgers and support vessels.

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