Journal of Productive Discourse

Pro
Critical Readings across Discipli nes
Volume 01, Issue 01, 2023, Pg. No. 53-64

Research Arti cle Peer Reviewed

An Assessment of the Effectiveness of Alternative Dispute Resolution

Methods
Anup Sauden1 , Surya Chhetri2 *
1Master’s Research Scholar, Madan Bhandari Memorial Academy, Urlabari 3, Morang, Nepal,

Engineer, Government of Nepal

2HRM (Research Dept.), Walden University, Minnesota, USA

INFO Abstract: This study assesses the effectiveness of Alternative Dispute

Resolution (ADR) practices in projects run under the Department of
*Corresponding Author: Roads of Nepal government. Secondary data from case studies and
Surya Chhetri
Walden University, USA
primary data from questionnaire and key informant interviews are
E-mail Id: analysed in view of the decisions regarding the use of ADR in
[email protected] settlement of road project cases. The research uses a descriptive method
Orcid id: in the assessment. Out of eight (8) projects, disputes related to four (4)
https://orcid.org/0009-0000-2360-7938 were settled by litigation based on ADR (Adjudication and Arbitration)
Date of submission: 09.01.2023 decision, one was sent for the reformation of arbitration by
Date of Acceptance: 16.03.2023 court/litigation and three (3) were awarded by ADR (Arbitration) but
DOI: remained pending in the settlement process by litigation till 14 May
https://doi.org/10.5281/zenodo.7885356 2022. Negotiation (i.e. amicable settlement) is the most applied ADR to
resolve the disputes followed by Conciliation, Mediation and
Adjudication. Arbitration is used as the last stage of ADR due to its high
legal value in spite of the high time and cost. The study is significant for
professionals to overcome the identified causes effectively to create
zero-dispute projects by handling the issues in real time.

Keywords: Alternative Disputes Resolution (ADR), Negotiation,

Conciliation, Mediation, Adjudication, Arbitration, Litigation, Claims,
Conflicts, Disputes

Journal of Productive Discourse (ISSN: 2990-7535)

Copyright © 2023 The Author(s): Published by MadanBhandari Memorial College,distributed under the terms
of the Creative Commons Attribution 4.0 International License (CC BY-NC 4.0)

1. INTRODUCTION raise the expense and alter the season of the

undertaking, which can harm the monetary and HR
Disputes need no seed to arise, as the saying aspects, the nature of work and opportunity cost
goes. Contrary to this, it is also said that every effect (Mishra A.K, Mandal L. and Pant, R.R, 2018) [4].
is an outcome of a cause. This paper discusses the This study focuses on the monetary costs of debates
causes of disputes in changing conditions and to forestall the venture to be expensive. Additionally,
examines the seeds of dispute to see if they are for the debates, their causes, effects and adequacy of
changing, too. the questions, goals and strategies ought to be found.
Roads receive a huge amount of investment as The review of road contracts under the related
high priority projects in Nepal [1]. Their construction division or department of the government will help
disputes affect the project cost and time, making the us recognise significant reasons for debates on
tasks to control and manage the effects more various sizes of road projects and the powerful
challenging [2 & 3]. Depending on the type of methods of settlement rehearsed in the context of
contract, skill of employee, and delivery method, the Nepal. Worldwide, (ICB) discussion is the most
disputes take different forms. The size and nature of applied ADR to determine the questions followed by
disputes depend on the response to the conflicts settlement and intervention (Mishra, A.K., 2018)
during the road construction. Each dispute might [2].Therefore, this research was conducted on
53
How to cite this article: Sauden A., & Chhetri S. (2023). An Assessment of the Effectiveness of Alternative Dispute Resolution
Methods. ProD Journal 1(1), 53-64.
Sauden A. & Chhetri S., ProD. 2023; 1(1)

different types of road projects (ICB and NCB) each project. The total amount spent on ADR is 38
already settled or pending in the settlement process. lakhs and 5 thousand rupees. The average cost of
The study was done through secondary data (case ADR is around 4 lakhs 76 thousand rupees. This
studies) and primary data (questionnaire) to further study is significant as it warns the stakeholders of the
our understanding of the practices and effectiveness risks in the absence of proper management of
of dispute management. There are various types of construction disputes in terms of their impacts. It
causes according to the nature of work and contract. will act as a guiding document for dispute resolution
The research is about finding the major causes of in road construction projects by helping them learn
disputes in these road projects. of the practices in the settlement of road construction
2. STATEMENT OF THE PROBLEM disputes. This can also help us settle the disputes
early on and more effectively.
From the primary data, obtained from the
questionnaire study, out of forty-five (45) causes of 3. OBJECTIVES
disputes, the changes in scope have not had any To assess the effectiveness of alternative dispute
significant impact on the project performance in resolution methods.
terms of time and cost. 4. LITERATURE REVIEW
And from the analysis of the secondary data 4.1 Claims in Construction Contract in Nepal:
obtained from the case study, the major problems
arising due to disputes are time overrun and cost 4.2 Dispute Resolution Methods
overrun. Disputes lead the project to be costly in Traditionally, parties would enter into litigation,
terms of time, cost, even its quality decline and lost often a costly and long-winded means of resolving a
business opportunity, and eventually the failure of dispute. Over the years, various methods of
the project. The date of settlement was assumed to be Alternative Dispute Resolution (ADR) have been
14 May 2022 so the total time lost during this introduced into the construction industry as a means
process would be around 37 years and 6 months, to avoid lengthy and expensive litigation.
which is 4 years 8 months and 7 days on average for
Table 1: The principal stages of dispute resolution
Stage -1 Negotiation Negotiation
Stage-2 Non-binding techniques and processes Mediation
Conciliation
Neutral Evaluation
Adjudication (DRB/DB)
Stage-3 Binding techniques and processes Arbitration
Expert Determination
Litigation

4.3 Alternative Dispute Resolution (ADR) third party intervention or involvement and the
Method matter can be discussed and settled between the
contracting parties themselves (Sharma, 2002).
The possible ADR processes available to
construction disputes are: The four characteristics of a good negotiated
settlement are:
4.3.1 Negotiation/Amicable Settlement
Negotiation is the least costly and the most  Fairness
flexible method of dispute resolution, allowing a  Efficiency
high degree of control over issues and time factors.  Wisdom and
According to Fisher (1991), direct negotiation is a
 Stability
common dispute resolution process in which parties
themselves, or their representatives, try to resolve the When parties participate in negotiations, they
dispute without involving any neutral third party. shall be transparent and ready for discussions:
Negotiation /Amicable settlement is an intermediate  get well prepared on the event, (issue) and
stage, where the parties, if they feel it worthwhile, allow sufficient time,
resolve the disputes themselves. It does not require a

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 arrange a pre-meeting; both parties make The Ethiopian Civil Code enumerates the
their own reconnaissance, process spectrum for Conciliation, from article 3318
 identify what is the interest of the other to 3323 as detailed below (Bekele, 2005) [27].
party, a. Duties of parties
 plan for the negotiation, 1. The parties shall provide the conciliator
with all the information necessary for the
 set objectives,
performance of his duties.
 become realistic,
2. They shall refrain from any act that would
 find lead negotiator- he/she can be non-site make the conciliator’s task more difficult
staff or have no chief site experience. or impossible.
He/she is only a commercial person. Expert b. Duties of conciliator
to make negotiations, he/she needs
someone who gives him/her background of 1. Before expressing his findings, the
the technicality of the event, issue. conciliator shall give the parties an
opportunity of fully stating their views.
 become transparent, thorough, and honest
2. He shall draw up the terms of a
to the lead negotiator. If you are part of the
compromise or, if none can be reached, a
negotiating team, discuss before getting
memorandum of non-conciliation.
into the matter.
3. He shall communicate these documents to
 get each member of the team to know
the parties.
his/her roles and contribution as per his/her
specialisation. c. Time-limits
 listen well to proposal, give more priority 1. The conciliator shall carry out his duties
to listening than talking, within the period of time laid down in the
contract or, in the absence of any such
 stick to plan. limit, within six months from the date of
(Gashaw Yayehyirad, 2004). his appointment.
2. During this period, the parties may perform
4.3.2 Mediation such acts as are necessary to preserve their
Mediation is a process of dispute resolution that rights.
focuses on effective communication and negotiation 3. They may not bring their dispute before the
skills. The mediator role is to help the parties in court prior to the expiration of this period
communicating and negotiating more effectively, unless the conciliator has drawn up a
thereby enhancing their ability to reach a decision. memorandum of non-conciliation.
Mediation is a mechanism in which a neutral third d. Powers of conciliator
party meets with the disputants and facilitates 1. The conciliator’s powers shall be
negotiation to help the parties come to their own interpreted restrictively.
solution (Pretorius 1993, Yuena 2002).
2. The parties shall not be bound by the terms
4.3.3 Conciliation of the compromise drawn up by the
Conciliation is a process similar to mediation conciliator unless they have expressly
except that the conciliator can express an opinion on undertaken in writing to confirm them.
the merits of the case and is required to recommend a e. Conciliator’s expenses and remuneration
solution if the parties fail to agree (Dighello, 2000;
1. The conciliator shall be refunded any
Agarwal, 2001). In this process, parties in dispute
reasonable expenses he has incurred in the
reach an agreement with the help of other person or
discharge of his duties.
agency, who harmonises the situation to bring the
disputants together to reach an agreement (Sharma, 2. He shall not be entitled to
2002). remunerationunless otherwise expressly
agreed.
4.3.4 Adjudication

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Adjudication is the process in which one or the short. These rules shall come into force from the date
other party appoints someone who is an expert in the of approval (2060/8/22 B.S. corresponding to 8
subject to help resolve the dispute. Adjudicator is December 2003) by the Executive Committee of
usually an industry expert who makes technical NEPCA.
decisions on the dispute which are generally binding The parties to any contract have made
upon parties. This is a process whereby the provisions to submit disputes arising out of the said
disputants present their cases to an independent contract, or there under to NEPCA for settlement, or
expert who then evaluates the evidence according to if an agreement is concluded between the parties, or
the relevant law, rules, contract and practice applied an understanding is reached between the parties, to
appropriately in the dispute and gives a confidential refer the disputes arisen under any contract to the
opinion on the likely outcome of the case if it were council. Such disputes shall be settled pursuant to the
to go to court or arbitration (Agarwal, 2001). provisions as stipulated in these rules. Provided,
4.3.5 Arbitration however, that the parties may, through their written
Arbitration is the legal alternative dispute understanding, exclude any provision of these rules
resolution technique outside the courts. Parties select in a manner that such provision shall not be
the arbitrators and agree to be bound by their applicable in respect to the dispute referred by them.
decision. Third party imposes the decision, legally The parties shall not be allowed to exercise the right
binding for both parties. In Nepal’s road construction as per the provision of sub-rule (1) after
contracts under DoR, the success rate of arbitration commencement of arbitral proceedings, i.e. counting
(i.e. 21.43%) for resolving contractual disputes is of Time Limit, Means of Notice and Method of
very low. (Mishra & Aithal, 2022)[28]. Initiating Arbitration.
Method of Initiating Arbitration
Arbitration is a dispute resolution process in If an agreement pertaining to arbitration or
which one or more neutral third parties hear the provision pertaining to arbitration of any agreement
evidence and arguments of each disputant and make or written understanding of the parties makes
a decision for them. The outcome is one of a provision for reference of the dispute to the council,
win/lose situation and is not based on any the claimant or both the parties jointly may
precedent(s). The decision of the arbitrator is legally commence arbitral proceedings by giving a written
binding and, often, there is no provision for appeal to notice of request to the council. A sum of NRs.
a court of law. There are exceptions, such as 1000/- (one thousand) as the fee for application shall
misconduct of the arbitrator. Rules of evidence used be required to be deposited with the council setting
in arbitration depend on the prior agreement between out the following matters in the notice of request as
the parties. It may take a long time, same as for a referred to in sub-rule (1): -
litigation process, and may even be more costly.  Name and address of the disputant parties,
What makes it attractive is the mutual agreement by  Nature and subject of dispute,
the parties, appointment of arbitrator, privacy and
confidentiality (Boulle, 1996).  Request made for arbitration,
Nepal Council of Arbitration (NEPCA)  Estimated amount of claim,
Nepal Council of Arbitration (NEPCA) was  Remedy sought,
established as an autonomous and non-profitable  Number of arbitrators agreed upon between
organisation for facilitating the settlement of disputes the parties, if so agreed,
of commercial nature through the development and  The required qualification of arbitrator, if
institutionalisation of a process of arbitration or other so specified,
alternative means of dispute settlement. Its executive
committee, in exercise of the power conferred by  If separate agreement or understanding is
Section 26 of the Statute of NEPCA, 2048 (1991) reached on arbitration, such agreement or
has framed the rules in order to manage the arbitral understanding and if there is no such
proceedings. agreement or understanding, provision of
the agreement pertaining to arbitration
NEPCA has adopted an arbitral Procedure under which the arbitral proceedings is
Rules, 2060 (2003), cited as "NEPCA Rules" in
commenced,

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 Contract under which the dispute has Pursuant to sub-rule 1 (a), each party shall
arisen, prepare its list of priority by deleting the names of
 If the agreement does not specify number the arbitrators it objects and by numbering the other
of arbitrator/s, a proposal on the matter names in the order of priority and return it to the
whether the arbitration shall be conducted council within 7 (seven) days.
by a sole arbitrator or by more than one Pursuant to sub-rule 1 (b), after the expiry of the
arbitrator. time-limit the council shall appoint the person as
Summary of claim may also be included in the arbitrator, within seven (7) days, whose name is
request as referred to in sub-rule (1) in addition to ranked in the first place in the list so returned by the
the matters set forth in sub-rule (2). Party who has party.
filed the notice of request pursuant to sub-rule (1) If arbitrators could not be appointed pursuant to
shall be required to give the information of such sub-rule (c), the council shall appoint arbitrators
notice of request to the other party. from its Panel of Arbitrators, keeping into account
If notice of request is filed by either party the nature and gravity of the dispute and
pursuant to sub-rule (1), the council shall give qualification and impartiality of the arbitrators being
written information to the other party and ask for appointed therein.
reaction thereof. While making appointment of the arbitrator
Appointment of Arbitrator pursuant to rule 12, sub-rules (4) and (5), the council
shall follow the procedures as prescribed in sub-rule
a) Composition of the Arbitral Tribunal (2) herein.
If the number of arbitrators is not specified in
Parties requesting for appointment of the
the agreement or the parties fail to reach an
arbitrator pursuant to sub-rule (1) shall be required to
agreement on the number of arbitrators, the dispute
deposit a sum of NRs. 5,000/- (five thousand) with
shall be heard and settled by a sole arbitrator.
the council.
However, taking into account the nature and gravity
of the dispute, the council may decide to form a 4.3.6 Expert Determination
tribunal consisting of 3 (three) arbitrators. Expert determination is a private process
b) Personal Details of Arbitrator involving an independent expert with inquisitorial
powers, who gives a binding decision.
Where a person is proposed for appointment as
an arbitrator, the proposer shall give such In expert determination, the parties agree to be
information as his/her full name, address, past and bound by the decision of an expert in the field of the
present professional position, qualification, and dispute. This process can be useful where the dispute
experience pertaining to arbitration. If the council is about a technical matter. The expert will
appoints an arbitrator, the council shall also give commonly be given powers to investigate the
such information to both the parties. background of the dispute himself, rather than just
relying on the evidence the parties choose to present.
c) Method for Appointment of the Arbitrator
by the Council 4.3.7 Litigation
Upon receipt of request from either or both the The court system renders a judgment or
parties to dispute for appointment of arbitrator decision based on relevant law and the facts.
pursuant to these rules, the council shall appoint Litigation (used when all other venues failed) is a
independent and impartial arbitrators from amongst dispute resolution method that is inquisitorial and
the Panel of Arbitrators maintained by the council. adversarial, where by the disputant initiates legal
While making appointment of arbitrator pursuant to action against the other party by going to court
sub-rule following procedures shall be followed: The (Agarwal 2001). It is costly and more time is
council shall provide a list containing names of at required for results and it may not do justice to the
least three arbitrators to both the parties. parties. It is also used when parties cannot agree to
the ADR process.
Table 2: Rank to common method of ADR
2020 Rank 2019 Rank Most common methods of alternative dispute resolution
1 1 Party-to-party negotiation
2 2 Mediation

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3 * Adjudication (contract or ad hoc)

(Source: Global Construction Disputes Report 2021)
keeping most of the parts of the earlier methods the
same, such as case projects, respondents and
5. METHODOLOGY questionnaire, to ensure their validity and reliability.
In this research, the researchers have Methods were adopted from the approach used by
extended an earlier research conducted by Sauden et al, 2022 followed by Mishra et al., 2022.
themselves with a view to obtaining the solution to 5.1 Research Flow
the problem as a pragmatic philosophy of research,

Figure 1: Flow chart for research methodology

Table: Research Design Table

Research Objectives Types of Data Source of Data
Research
Tools
To assess the effectiveness of Secondary data ( Case Study) Use of ADR for Descriptive
alternative dispute resolution Primary data (Questionnaire, Key settlement of cases Methods
methods. Informant Interview)

6. RESULTS AND DISCUSSION contracts. The figures show the commonly used
Different disputes/claims have arisen during the dispute resolution practices with their rankings in
construction phase of individual road projects. terms of the responses.
Causes of disputes, found in case studies, semi- Client's Response
structured interviews and questionnaire surveys, are Figure 4-1 shows the responses of the clients on
discussed one by one in the sections below. the commonly used dispute resolution practices on
6.1 Commonly used dispute resolution methods road contracts in Nepal. The client's responses on
practised on road contracts in Nepali Negotiation, Conciliation, Mediation, Adjudication,
Context Arbitration, Litigation and, others have been found
Opinions on the questionnaire have been to be 22%, 15%, 19%, 13%, 19%, 10% and 2%
collected from the main stakeholders (i.e. Employer, respectively. It is found that Negotiation is used as a
Consultant/Engineers, and Contractors) of the road common method and Mediation is needed before
 Sauden A. & Chhetri S., ProD. 2023; 1(1)

Arbitration. Litigation is ranked as the least Contractor's Response

commonly used dispute resolution process in terms Figure 4-1 shows the responses of the
of the client’s responses. contractors on the commonly used dispute resolution
Consultant's Response practices on road contracts in Nepal. The contractor's
Figure 4-1 shows the responses of the response on Negotiation, Conciliation, Mediation,
consultants on the commonly used dispute resolution Adjudication, Arbitration, Litigation and others have
practices on road contracts in Nepal. The consultant's been found to be 27%, 13%, 18%, 18%, 15%, 9%
response on Negotiation, Conciliation, Mediation, and 0% respectively. It is found that Negotiation is
Adjudication, Arbitration, Litigation and others have used as the common method and
been found to be 27%, 20%, 17%, 10%, 17%, 8% Mediation/Adjudication is needed before Arbitration.
and 0% respectively. It is found that Negotiation is Litigation is ranked as the least commonly used
used as the most common method and Mediation is dispute resolution process in terms of contractor’s
needed before Arbitration. Litigation is ranked the responses.
least as commonly used dispute resolution process in
terms of consultant’s responses.

Figure 2: Commonly used dispute resolution practices on road contracts in Nepal

From the questionnaire study, it is found that all they have caused a significant impact on the project
the respondents have given a higher weight on the performance.
Negotiation and lower weight on the Court / 6.2 More effective dispute resolution practices on
Litigation. This shows that the commonly used road contracts in Nepal
dispute resolution practice on road contracts is Opinions on the same questionnaire have been
Negotiation, in which the disputes that had arisen collected from the main stakeholders (i.e. Employer,
during the construction stage were settled from Consultant/Engineers, and Contractors) of the road
positive negotiations between the stakeholders of the contracts as shown in the table. The figure shows
project. Also, according to the Global Construction more effective dispute resolution practices with their
Disputes Reports 2021, Negotiation is ranked top in ranking in terms of the responses.
2019 and 2020. If the disputes cannot be settled Client's Response
through negotiations then they will go through the Figure 4-2 shows the client’s responses on more
process of Conciliation, Mediation, Adjudication, effective dispute resolution practices on road
Arbitration or Court/Litigation. In the case studies, contracts in Nepal. According to the responses, each
only the cases of disputes which were not settled by stage of ADR has a higher weight percentage than
Negotiation/Conciliation/Mediation were found and Litigation. This shows ADR is a more effective
dispute resolution process than Litigation. The
Sauden A. & Chhetri S., ProD. 2023; 1(1)

responses on Negotiation, Conciliation, Mediation, found to be 29%, 15%, 17%, 16%, 15%, and 10%
Adjudication, Arbitration, and Litigation have been respectively.
found to be 29%, 15%, 16%, 15%, 15%, and 10% Contractor's Response
respectively. Figure 4-2 shows the contractor’s response on
more effective dispute resolution practices on road
Consultant's Response contracts in Nepal. According to the responses, each
Figure 4-2 shows the consultant’s response on stage of ADR has a higher weight percentage than
more effective dispute resolution practices on road Litigation. This shows ADR is a more effective
contracts in Nepal. According to the responses, each dispute resolution process than Litigation. The
stage of ADR has a higher weight percentage than responses on Negotiation, Conciliation, Mediation,
Litigation. This shows ADR is a more effective Adjudication, Arbitration, and Litigation have been
dispute resolution process than Litigation. The found to be 28%, 20%, 19%, 15%, 11%, and 7%
responses on Negotiation, Conciliation, Mediation, respectively.
Adjudication, Arbitration, and Litigation have been

Figure 3: More effective dispute resolution practices on road contracts in Nepal

From the questionnaire study, it is found that all first effective dispute resolution practice after
the respondents have given a higher weight on the Negotiation is Adjudication. The second is
Negotiation and lower weight on the Court / Arbitration and the third is Litigation. This means
Litigation. Figure 4.1 shows that the commonly used one stage of dispute resolution is needed between
dispute resolution practice on road contracts is Negotiation and Arbitration. Because Negotiation is
Negotiation. Conciliation and Mediation are similar based on understanding between two parties,
in working process in which the stakeholders are whereas if there is Adjudication, which is evidence-
positive towards the dispute settlement. But figure based, it also helps for the arbitrators in decision
4.2 shows that the more effective dispute resolution making.
practice on road contracts where the parties were not From the case studies, all the cases were first
willing to negotiate on the cause of disputes and the discussed or analysed and awarded by the
claims which comes under the Adjudication, Adjudication then Arbitration and the cases are
Arbitration and Litigation methods. According to the settled by the final decision awarded by Litigation.
Public Procurement Rule 2064 (11th amendment), Therefore, the effective dispute resolution practices
after Negotiation, the case goes directly to on road contracts by the questionnaire study and
Arbitration. But from figure 4.2, it is seen that the from the case study are the same.
 Sauden A. & Chhetri S., ProD. 2023; 1(1)

6.3 Disputes Management Practices

6.3.1 Practices of Dispute Management in Particular Projects based on Case Studies
Table 3: Practices of Dispute Management in Particular Projects
SN Project Name Present status of disputes

1. KCHP/GC/19/068/69,Construction of Ghurmi-ChataraKoshi Awarded by litigation (on the basis

Corridor Sector, Km 146+100 to Km 149+600 of ADR (Arbitration) decision)

2 KCHP/GC/12/068/69,Construction of Ghurmi-ChataraKoshi Awarded by litigation (on the basis

Corridor Sector, Km 16+920 to Km 18+880 of ADR (Arbitration) decision)

3 KCHP/GC/01/068/69,Construction of Ghurmi-ChataraKoshi Awarded by litigation (on the basis

Corridor Sector, Km 0+000 to Km 2+160 of ADR (Arbitration) decision)

4 TRIP/337312/RBID/2071/72/01, Upgrading and Till date pending in upper court

Construction of Rani-Biratnagar-Itahari-Dharan Road Sector.

5 AH/MT/1-03/068/69, Construction(Improvement) of Awarded by litigation (on the basis

Maitighar-Tinkune Road Section (1+300 to 2+660) of ADR decision)

6 EEAP/NCB/DG/03, Upgrading of Dhading-Gorkha Road, Decision pending on litigation till

Ghyampesal-Gorkha Section (Km 54+300 to Km 64+500) date

7 51-2067/68, Construction of Motorable Steel Truss Bridge Decision pending on litigation till
over Marsyangdi River at Damauli, Purkot VDC, Tanahu. date

8 RIP/EXIM/TS-04, Upgrading of Tulsipur - Salyan Road (Km Court’s decision for reformation of
0+000 to Km 61+744) arbitration.(Pending till date)

From the study of these eight cases, there are structured interviews of DoR higher lever personnel
four cases finally settled by way of Litigation on the without considering any specific projects.
basis in line with the Arbitration decision and During interviews on different ADR methods
remaining four cases were awarded by Arbitration and Litigation, they replied Arbitration is time
but pending till date on Litigation. From the study of consuming and not cost effective. It is the most used
cases which were settled, it is found that the analysis one due to its high legal value almost equal to
of disputes and decision by arbitrator on the process Litigation. Negotiation is the best in respect of
under Arbitration is taken by Litigation. In case No. secrecy, time and cost effectiveness and it is found to
8, the court decided the reformation of Arbitration be applied in initial phase though it does not have
for the analysis of the issues and their settlement. So, legal importance, so it was found to have been
ADR method is effective for analysis of the disputes applied only as a step of ADR.
and their settlement. Also, the disputes were 6.3.3 Practices of Dispute Management in Road
transferred to the higher dispute resolution bodies Projects based on Questionnaire Survey
and most of the cases were settled on the basis of Based on Questionnaire Survey, main
ADR decision. stakeholders have been familiarised with the
6.3.2 Practices of Disputes Management in Road Alternative Dispute Resolution (ADR) process on
Projects based on Semi-Structured the road projects under the Department of Roads.
Interviews
The practices of dispute resolution in Nepali
road contracts has been assessed through semi-

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Figure 4: Familiarisation of respondents on ADR

Figure 4 shows the main stakeholders' response between Negotiation and Arbitration. Because
with "familiarisation" on the ADR process in the Negotiation is based on understanding between two
road projects -- it has been found to be 87%, 93%, parties, whereas if there is Adjudication, which is
and 54% for clients, consultants and contractors, evidence-based, it also helps the arbitrators in
respectively. Similarly, "no familiarisation" on the decision making.
ADR process in the road projects has been found to From the cases, among the eight (8) projects,
be 13%, 7%, and 46.15% respectively. Similarly, "I time spent in settlement of the disputes raises the
don't know" response in the ADR process in the road project cost and increases the duration of project
projects has been found 0%, 0%, and 0% completion. From the study of the eight (8) cases,
respectively for them. It is found that most of the four (4) project were found to have been settled by
stakeholders have been familiar with the ADR Litigation on the basis of ADR (Adjudication and
process in the road projects. Arbitration) decision, one (1) project was sent for the
7. CONCLUSION reformation of Arbitration by Court/Litigation and
From the primary data obtained from the other three (3) projects are awarded by ADR
questionnaire survey and analysis of secondary data (Arbitration) but till date pending in settlement
obtained from case studies, Negotiation (i.e. process by Litigation.
amicable settlement) is the most applied ADR to 8. RECOMMENDATIONS
resolve the disputes followed by Conciliation, Following are the recommendations.
Mediation and Adjudication. Arbitration is used as  Claims arising from delay in work progress
the fifth ADR method due to its high legal value in can be reduced by realistic work schedule
spite of the high time and cost. Based on the findings with resource deployment plan. The
of the study, following alternative dispute resolution employer should closely monitor the
processes were the most effective to resolve the activities with approved work schedule and
disputes/claims, i.e. Negotiation (i.e. amicable provide appropriate solution for the issues
settlement), Conciliation, Mediation, Adjudication, arising from disputes / claims.
and Arbitration, in that order. According to the  Claims arising from delay in payment can
Public Procurement Rule 2064 (11th amendment), be reduced by systematic disbursement of
after Negotiation disputes go directly to Arbitration. payment or direct payment to the people
But Figure 4.2 shows that the first effective dispute working in groups under contractor.
resolution practice after Negotiation is Adjudication.  The cash flow management of contractors
The second is Arbitration and the third is Litigation. can be controlled by control mechanism for
This means one stage of dispute resolution is needed
 Sauden A. & Chhetri S., ProD. 2023; 1(1)

the use of mobilisation fund on the same and preserve the organisational relationships, thus
project works. providing business continuity. This research can,
 Consultants should timely submit the therefore, provide an illustration for more general
corrected drawing with any information on application, in terms of contract conflict resolution.
location to work with smooth execution of 10. ACKNOWLEDGEMENT
work and settle on brief choices in regards The author is thankful to all the professionals
to the specialised and authoritative issues who took part in discussions. The author thanks
by taking manager endorsement where Saanvi Lavanya (Betkumar) and Sachi Vanshika
vital in determined time as required. (Betlana) for being with us as source of happiness.
 Specialists ought to sort out a post Thanks to Dr. Garry Blair for his technical advice.
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