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Leaders Kuwait 2017: Dispute management could help Kuwait’s contractors succeed

Lee Barry, Middle East managing director of Driver Trett, outlines the ways in which Kuwait’s developers and contractors can mitigate the risk of – and resolve – disputes

SPECIAL REPORTS, Sectors, Kuwait

Lee Barry, Middle East managing director of Driver Trett, outlines the ways in which Kuwait’s developers and contractors can mitigate the risk of – and resolve – disputes.

As the prevalence of disputes continues to rise within Kuwait’s construction sector, effective risk mitigation and contract administration procedures are more important than ever before.

In his presentation on dispute mitigation and resolution, Lee Barry, Middle East managing director of global consultancy, Driver Trett, outlined a diverse array of measures that could be employed by Kuwait’s contractors and developers to minimise the risk of dispute, and deal with such issues effectively when they do arise.

“Most of us have experienced disputes, probably more so here than anywhere else in the world,” Barry began. Turning his attention to the main causes of disputes within Kuwait’s construction sector, he cited factors such as low market liquidity, the preponderance of joint ventures, breakdowns in communication, fast-track construction programmes, poor record keeping, and changes to standard contracts.

In turn, Barry noted that by addressing these issues at an early stage, companies could reduce their risk of dispute. Commenting on the importance of suitable contracts, he continued: “I’m sure the lawyers in the room will agree when I say that you should not change the standard contract [without good reason]. The more you change and adapt a contract, certainly without understanding the ramifications of doing so, the more likely you are to end up in dispute.

“Pushing all the risk to one party doesn’t necessarily help your bottom line,” he added. “It just increases the likelihood that you’ll end up fighting at the end of the project.”

Barry also emphasised the importance of diligent record-keeping, stating: “It’s very rare that people keep excellent records out here. If you want to lower your chances of dispute, and your cost in arbitration, keep good records. This saves you an awful lot of time and money when it comes to hiring legal teams and experts to come up with the information to support your claims.”

Moving on to the best course of action for firms that find themselves in dispute, Barry warned attendees to do everything within their power to resolve the matter before it reached the stage of arbitration. He advised delegates to crystalise the issue, enlist the services of a dispassionate third-party reviewer, assess the likelihood of a successful claim, and pursue commercial settlements that work for both parties wherever possible.

Barry also extolled the virtues of dispute adjudication boards (DABs), which enable stakeholders to deal with potential disputes as and when they arise. He elaborated: “DABs are effective in that, if you stick to what the contract says, you will end up getting decisions very early. That will aid your understanding of where your cash flow – and, ultimately, your budget – is going.”

He concluded: “The best approach is to keep the lines of communication open and work to resolve disputes early. If both parties take a common-sense approach then, maybe, they will never end up in dispute.” 

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