Disputes Resolution on Projects

Civil and Environmental Engineering Department /

Engineering Management Program
CIVE 723 / ENMG 698K
Prof. M. Asem Abdul-Malak

Authority and Capacity of the “Engineer”

Course Outline

• Introduction to construction disputes resolution

• Types of, and steps for dealing with, claims
• Claims/disputes avoidance
• Contract language governing claims/disputes
• Claims/disputes timeline – FIDIC
• Claims/disputes timeline - AIA
• Claims/disputes timeline - EJCDC
• Authority and capacity of the “Engineer”
• Claims/disputes documentation and team dynamics
• Adjudication
• Amicable settlement
• Mediation
• Arbitration
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© American University of Beirut / Prof. M. Asem Abdul-Malak
 Based on the reading, entitled:
ENHANCED ROLES AND TRAITS OF THE ENGINEER IN
ASSESSING CLAIMS

by
Mohamed-Asem Abdul Malak,
Salim Bou Hamdan, and Farah Demachkieh
(2020)
© American University of Beirut / Prof. M. Asem Abdul-Malak
Outline
• Introduction
• Study Design
• Third-Party’s Professional Roles
• The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions
• Exercising the Stipulated Engineer’s Roles
• Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators
• Concluding Remarks

4
© American University of Beirut / Prof. M. Asem Abdul-Malak
Outline
• Introduction
• Study Design
• Third-Party’s Professional Roles
• The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions
• Exercising the Stipulated Engineer’s Roles
• Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators
• Concluding Remarks

5
© American University of Beirut / Prof. M. Asem Abdul-Malak
Introduction ▬ 1

• Construction projects have been characterized with a substantial volume of

claims, which destructively impact the construction industry environment.
• Claims may evolve into disputes if not resolved expeditiously.

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© American University of Beirut / Prof. M. Asem Abdul-Malak
Introduction ▬ 2

• Twofold management of construction claims/disputes is to occur: by the

contractor, on the one side, and by the employer/owner or an entity
selected by him and acting on his behalf (i.e., referred to as the “engineer”),
on the other one.

• Standard forms of contract conditions explicitly specify the authority and

roles assigned to the engineer for administrating the construction contract.

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© American University of Beirut / Prof. M. Asem Abdul-Malak
Introduction ▬ 3

The design professional often ends up playing three different roles on a

construction project, including:
• an independent participant who prepares the design drawings and
specifications, among other construction documents;
• an owner’s representative or contract engineer who supervises the
construction contract, inspects the executed work, and certifies interim
payment; and
• a judge (i.e., quasi-judicial role) who decides on disputes between the
contracting parties.

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© American University of Beirut / Prof. M. Asem Abdul-Malak
Introduction ▬ 4

This work has been motivated by the need to probe the

enhanced role that the engineer is requested to satisfy at each
stage of the claim evolution process, as prescribed under the
newly released 2017 FIDIC conditions, in comparison with the
roles stipulated under the earlier (1999) version of these
conditions.

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© American University of Beirut / Prof. M. Asem Abdul-Malak
Outline
• Introduction
• Study Design
• Third-Party’s Professional Roles
• The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions
• Exercising the Stipulated Engineer’s Roles
• Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators
• Concluding Remarks

10
© American University of Beirut / Prof. M. Asem Abdul-Malak
Study Design ▬ 1

© American University of Beirut / Prof. M. Asem Abdul-Malak

Study Design ▬ 2

© American University of Beirut / Prof. M. Asem Abdul-Malak

Study Design ▬ 3

© American University of Beirut / Prof. M. Asem Abdul-Malak

Study Design ▬ 4

© American University of Beirut / Prof. M. Asem Abdul-Malak

Study Design ▬ 5

The study’s outcomes shall be of value to the engineering professional involved

in the administration of the construction contract, through offering a clear
perception of:

• the different deduced judgement-rendering roles and the corresponding

capacities under which they are fulfilled, and

• the general attributes that the concerned engineering professional must

be guided by when acting in accordance with any such corresponding role.

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© American University of Beirut / Prof. M. Asem Abdul-Malak
Outline
• Introduction
• Study Design
• Third-Party’s Professional Roles
• The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions
• Exercising the Stipulated Engineer’s Roles
• Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators
• Concluding Remarks

16
© American University of Beirut / Prof. M. Asem Abdul-Malak
 Third-Party’s Professional Roles ▬ 1
(Third-Party’s Judicial Capacity ▬ 1)

• Common law: The role of the engineer can be regarded to involve actions to be taken
as one of the employer’s personnel and actions necessitating the rendering of a
professional judgement (a “quasi-judicial” role).

• Hickman v. Roberts: The engineer should exercise his own judgment rather than being
influenced by employer’s instructions in relation to the certification of works or the
settlement of claims.

• Shui on Construction v. Shui Kay Company: The architects owed the owner and
contractor the duty to: (1) exercise reasonable skill and care in performing their roles
as prescribed in the contract conditions, and (2) act “fairly and impartially” in
performing such roles.

© American University of Beirut / Prof. M. Asem Abdul-Malak 17

 Third-Party’s Professional Roles ▬ 2
(Third-Party’s Judicial Capacity ▬ 2)

Prior to 1974
• Chambers v. Goldthorpe: Under English Law, the engineer, when exercising
the judicial capacity, would be viewed as a “quasi-arbitrator” and is
consequently immune from responsibility of negligence.

In 1974
• Sutcliffe Appellant v. Thackrah: An engineer has a duty of care towards the
owner, could be held liable for negligence, and shall act independently and
“in good faith” when performing under a quasi-judicial capacity.

© American University of Beirut / Prof. M. Asem Abdul-Malak 18

Third-Party’s Professional Roles ▬ 3
(Third-Party’s Judicial Capacity ▬ 3)

Amec Civil Engineering Limited v. Secretary of State for Transport. When acting in a quasi-
judicial capacity, the engineer shall:

• “retain his independence in exercising his skilled professional judgment;”

• “act in a fair and unbiased manner” and “reach his decisions fairly holding the
balance;” and

• “act fairly and impartially” where fairness is “a broad and even elastic concept” while
impartiality “is not meant to be a narrow concept.”

© American University of Beirut / Prof. M. Asem Abdul-Malak 19

Third-Party’s Professional Roles ▬ 4
(Assumed Independence of the Engineer)

Scheldebouw BV v. St James Homes Ltd. Three propositions emerged concerning the position of the
contract administrator:

• “The precise role and duties of the decision-maker will be determined by the terms of the contract in
question;”

• “Generally the decision-maker is not and cannot be observed as an entity wholly independent of the
employer;” and

• “When performing his decision-making function, the [contract] administrator is required to act in a
manner which has variously been described as independent, impartial, fair and honest."

© American University of Beirut / Prof. M. Asem Abdul-Malak 20

Third-Party’s Professional Roles ▬ 5
(The Engineer’s Capacity Under the 1987 and 1999 FIDIC Standard Contract Conditions)

© American University of Beirut / Prof. M. Asem Abdul-Malak 21

Outline
• Introduction
• Study Design
• Third-Party’s Professional Roles
• The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions
• Exercising the Stipulated Engineer’s Roles
• Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators
• Concluding Remarks

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© American University of Beirut / Prof. M. Asem Abdul-Malak
 The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions ▬ 1

• The fulfillment of a claim’s submission requirements prompts the engineer

to carry out consultations in an endeavor to have the parties achieve
agreement (as per Sub-Clause 3.7.1).

• However, if such efforts do not succeed, the engineer shall proceed (under
Sub-Clause 3.7.2) to make a fair determination of the claim, taking due
regard of all relevant circumstances. Such a determination by the engineer
is stated to be binding on both owner and contractor.

© American University of Beirut / Prof. M. Asem Abdul-Malak 23

 The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions ▬ 2

• Pursuant to Sub-Clause 3.2, it is indicated that the engineer “shall act as a

skilled professional and shall be deemed to act for the Employer,” a
requirement similar to that under the 1999 conditions.

• The distinctive change in the 2017 conditions lies in that they clearly clarify,
as per Sub-Clause 3.2, that “there shall be no requirement for the Engineer
to obtain the Employer’s consent before the Engineer exercises his/her
authority under Sub-Clause 3.7 [Agreement or Determination].”

© American University of Beirut / Prof. M. Asem Abdul-Malak 24

The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions ▬ 3

• Sub-Clause 3.7 clearly specifies that the engineer, when exercising his authorities
under this sub-clause, “shall act neutrally between the Parties and shall not be deemed
to act for the Employer.”

• If either party is dissatisfied with the engineer’s determination, that party shall issue a
notice of dissatisfaction pursuant to new Sub-Clause 3.7.4, and the disputed claim can
then be referred to the “Dispute Avoidance/Adjudication Board” (DAAB). Failure to give
such a notice renders the engineer’s determination as not only “binding” but also
“final.”

© American University of Beirut / Prof. M. Asem Abdul-Malak 25

The Engineer’s New
Roles Under the
2017 FIDIC Standard
Contract Conditions
▬4

Consultation
and
Determination
Stages

© American University of Beirut / Prof. M. Asem Abdul-Malak

Outline

• Introduction
• Study Design
• Third-Party’s Professional Roles
• The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions
• Exercising the Stipulated Engineer’s Roles
• Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators
• Concluding Remarks

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© American University of Beirut / Prof. M. Asem Abdul-Malak
Exercising the
Stipulated
Engineer’s Roles ▬
1

Identified or
Inferred
Engineer’s
Traits

© American University of Beirut / Prof. M. Asem Abdul-Malak

Exercising the
Stipulated
Engineer’s Roles
▬2

Interconnections
Among
the Traits ▬ 1

© American University of Beirut / Prof. M. Asem Abdul-Malak

Exercising the Stipulated
Engineer’s Roles ▬ 3

Interconnections
Among
the Traits ▬ 2

© American University of Beirut / Prof. M. Asem Abdul-Malak

Exercising the
Stipulated
Engineer’s
Roles ▬ 4

Relationship
Between the
Identified
Traits and the
Engineer’s
Roles

© American University of Beirut / Prof. M. Asem Abdul-Malak

Outline
• Introduction
• Study Design
• Third-Party’s Professional Roles
• The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions
• Exercising the Stipulated Engineer’s Roles
• Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators
• Concluding Remarks

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© American University of Beirut / Prof. M. Asem Abdul-Malak
Discussion: Analogies
Between the Engineer’s
Roles and those of
Mediators and
Arbitrators ▬ 1

The Engineer’s
Mediation-Type Role
in the Consultation
Stage ▬ 1

© American University of Beirut / Prof. M. Asem Abdul-Malak

Discussion: Analogies
Between the
Engineer’s Roles and
those of Mediators
and Arbitrators ▬ 2

The Engineer’s
Mediation-Type Role
in the Consultation
Stage ▬ 2

© American University of Beirut / Prof. M. Asem Abdul-Malak

Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators ▬ 3

The Engineer’s
Arbitrational-Type Role
in the Determination
Stage ▬ 1

© American University of Beirut / Prof. M. Asem Abdul-Malak

Discussion: Analogies Between the Engineer’s
Roles and those of Mediators and Arbitrators ▬ 4

The Engineer’s
Arbitrational-Type Role
in the Determination
Stage ▬ 2

© American University of Beirut / Prof. M. Asem Abdul-Malak

Outline
• Introduction
• Study Design
• Third-Party’s Professional Roles
• The Engineer’s New Roles Under the 2017 FIDIC Standard
Contract Conditions
• Exercising the Stipulated Engineer’s Roles
• Discussion: Analogies Between the Engineer’s Roles and those of
Mediators and Arbitrators
• Concluding Remarks

37
© American University of Beirut / Prof. M. Asem Abdul-Malak
Concluding Remarks ▬ 1

• The roles to be exercised by the contract engineer are overshadowed by five inferred
principles of conduct: objectivity, impartiality, due diligence, standard of care, and
professionalism.

• It has been shown that, by analogy, the engineer’s consultative and decision-making
roles can be distinctly viewed to be mimicking those undertaken by mediators and
arbitrators, respectively.

• A major challenge to be faced by the contract engineer who is required to act neutrally
under Sub-Clause 3.7 is the preparedness for being able to effectively wear two hats:
that of the mediator in performing consultations and the other of the arbitrator in
rendering a fair determination.

© American University of Beirut / Prof. M. Asem Abdul-Malak 38

Thank you 

© American University of Beirut / Prof. M. Asem Abdul-Malak