Iijm 2014 11 29 1

IPASJ International Journal of Management (IIJM)
Web Site: http://www.ipasj.org/IIJM/IIJM.htm

Email: editoriijm@ipasj.org
ISSN 2321-645X
A Publisher for Research Motivation........
Volume 2, Issue 12, December 2014
Application of Modern Methodologies to Settle

Disputes in Construction Projects
A. A. Elziny 1, M. A. Mohamadien 2, H. M. Ibrahim 3, and M. K. Abdel Fattah4
1
The corresponding author, Planning Engineer , Petrojet Company, Port Said, Egypt
President of Suez Canal University, Professor of Steel Structure, Faculty of Engineering

Suez Canal University, Ismailia, Egypt
Head of Civil Engineering Department, Professor of Concrete Structures, Faculty of Engineering

Port Said University, Port Said, Egypt
4
Business Development Manager - Petrojet Company, Cairo, Egypt
ABSTRACT
The objective of construction project stakeholders is the completion of a project that meets the objectives of time, cost and
quality. However, the construction process is often fraught with disputes over the interpretation of construction documents,
existing conditions, the legitimacy of variations, timely payments, etc. The best technique to resolve a dispute is how to manage
it carefully to reach an appropriate solution. The aim of this paper is to evaluate the prevailing dispute handling methodology
process and consequently to recommend possible Alternative Disputes Resolutions (ADR) methods. To achieve the goal of this
study, a questionnaire has been used and four case studies have been studied to collect the required data. This study indicates
the actual problems facing contractors and owners during dealing with disputes, and how to assist in reaching a good
resolution methodology by the application of the proposed ADR. from the experts opinions and questionnaire respondents the
proposed ADR procedure for long and short term local contracts is applicable, simple and takes the parties satisfaction .So
there is a need to revise the local construction project contracts and standardize it to include the proposed ADR for disputes
resolution through establishing an official committee which consists of all related sectors working in public construction
projects, contracting union, engineering syndicate, and specialist engineering consulting firms.
Key words: Project stakeholders, Disputes, Alternative Dispute Resolution, local contracts.
1.INTRODUCTION
The construction industry in Egypt is considered the largest industry over the world wide. The construction sector is
a vital contributor to the Egyptian economy, yet, it is also very complex as it involves multidisciplinary participants. In
this environment, disputes appear to hinder the completion of construction and cause delays in delivering projects.
Said [1], defined disputes as'' any contract question or controversy must be settled beyond the jobsite management
staff". Susan [2] used the term dispute to mean "a difference between the parties after the internal procedure has been
exhausted". Ndekugri and Russell [3], showed that a dispute only comes after a claim has been made and been rejected
". Roxene [4] stated that in a typical construction project, the owners, donor agencies, project managers, field
engineers, general contractors, subcontractors, and suppliers are the primary stakeholders. So when disputes arise in a
construction project, some or all of the stakeholders are the dispute parties. Without the means to address disputes,
minor issues can fester and grow, with crippling consequences for project participants. The rising cost, delay and risk
of litigation in construction disputes has prompted the construction industry to look for new and more efficient ways to
resolve these disputes outside the courts. The best technique to resolve a dispute is how to prevent the dispute
occurrence. So, all bodies should be cooperative in early handling any problem to avoid enlargement. Office of
government commerce [5], determined that the first important step to avoid disputes is to have clear wording in the
contract that reflects the intensions of the parties. That wording should include provision for the appropriate dispute
resolution techniques to be applied in the event of a dispute arising, with suitable arrangements for escalation. Attorney
General's office (AGO) [6], concluded that It may be impossible or too costly to prevent all international disputes. But
certainly, one good way of trying to deal with disputes is to forestall as many as possible from ever arising, or at least
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try to find ways to solve them quickly before the dispute becomes exacerbated and the parties' positions harden. If a
dispute occurs, it should be managed carefully to reach an appropriate solution for it, Cheung [7], found that
construction management has been recognized as a distinct method of managing construction projects for over twenty
years. Unsuitable management system can be a vital reason to produce various conflicts, misunderstanding of project
documents and weak communications between the project contract parties. Early positive management for disputes
leads to early settlement. This idea was stated by the Office of government commerce [5]. J.J.P [8] stated that the first
step in the process of differences between parties, relating to any project, should be to establish a process whereby
parties would be enabled to mitigate disputes. However, the goals of dispute resolution should firstly be to establish the
right of a party to submit a claim and to enable the other party to consider the claim in terms of validity, contractual
terms and possible outcome. The establishment and consideration of a claim does not mean that a dispute exists, but
should the rejection of a claim occur, or a different interpretation to a claim remains and parties are not able to settle or
mitigate their differences, a dispute may then be the result. According to Guidance for Government Departments and
Agencies [6], if a dispute arises, it is important to manage it actively and positively and at the right level in order to
encourage early and effective settlement. Unnecessary delays and inefficiency can lead to rapid escalation of costs and
further damage the client/supplier relationship. S. Cheung and H. C. H. Suen, [9], stated that disputes are inevitable in
construction projects, Skills in dispute resolution should be part of the toolkit of any practitioner in a managerial
position. Thus resolving dispute has been part of the routine of every construction manager. Construction disputes
could be resolved using several techniques including negotiation, mediation, conciliation, review, mini-trial,
arbitration, and litigation.The term "ADR" is often used to describe a wide variety of dispute resolution mechanisms
that are short of, or alternative to, full-scale court processes. Taschuk and Chambers [10] defined ADR as a collection
of techniques for the resolution of disputes quickly and economically, in a fashion not usually possible with the
traditional litigation process. FIAS [11] clarified that ADR system offer disputants a chance to avoid the often long and
expensive process of taking a case through the formal judicial system. Mediated solutions are generally faster, less
expensive, and more likely to allow the parties to return to doing business with one another. ADR has long been an
important part of disputes resolutions in many developed countries and are becoming increasingly important in
developing countries as these countries attempt to reform their judicial systems. Barr [12] stated that ADR means
methods of resolving legal disputes or conflicts privately through the intervention of a third party other than via
litigation. It offers a more conciliatory means, quicker and less expensive platform for resolving disputes in contrast to
the procedures of seeking justice and fairness or even redress, in a law court. More importantly, ADR mechanism
promotes and protects the privacy of aggrieved parties, creates calm and friendly atmosphere for parties to discuss,
agree and disagree before reaching amicable and endurable agreement. A.A Okharedia [13], showed how South Africa
has successfully used ADR (refers to a set of practices and techniques aimed at permitting the resolution of legal
disputes outside the courts, The practice and technique of ADR comprises negotiation, mediation, conciliation,
arbitration, and
a variety of hybrid processes by which a neutral person facilitates the resolution of legal disputes
without formal adjudication.) to settle dispute. and how this method be used by other countries like Ghana, Nigeria,
Ethiopia, Malawi and other African countries where the method of ADR has not been fully utilized. The main objective
is to keep disputes out of the normal court system in an effort to cut down the cost of resolving the dispute among the
parties. Nicholas and Partner [14], searched for how disputes arise and then taking proactive steps to avoid them.
communicating well and looking for objective solutions and avoiding conflict can also help once the project is under
way. A commercially based settlement, either in negotiation or by mediation, is now frequently used in the construction
industry. Use of a mediator or some other ADR process can resolve disputes more quickly, saving time and money. If
all of this fails, there are of course the procedures of arbitration and litigation. While they are applicable occasionally,
they are best avoided if possible. The present study is thus an attempt to extend the previous studies by investigating
the disputes in construction projects. From the authors point of view, the studies which were conducted on disputes
settlement procedures are too few also there was rare in the application of ADR to solve disputes in Egyptian contracts.
so this research may be a good starting point for the study by applying a decision support system that helps the contract
parties to estimate their performance in dispute management, settle disputes through proposed ADR methodology in
both local long and short term contracts and provide recommendations in these issues, This will be through a
questionnaire and four case studies to collect the required data.
2.QUESTIONNAIRE DESIGN
According to the review of literature and after interviewing experts who were dealing with the disputes in construction
projects at different levels, all the information that could help in achieving the study objectives were collected, reviewed
and formalized to be suitable for the study survey and after many stages of brain storming, consulting, amending, and
reviewing that executed by the researcher with the supervisors. A questionnaire survey designed to study the
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companies' point of view in main sources of disputes, modern methodologies to settle disputes in construction projects
including its application, obstacles and proposed ADR to settle disputes in long and short term contracts in Egypt.
The questionnaire contains two parts, as follows:
Part A:
A.1 General Information about respondents contains their name, company, project, location and its field.
A.2 Main sources of disputes include five main subsections as follows: contract documents, contract management,
project related issues, financial issues and other sources as (Force majeure, weak of construction laws, etc)
A.3 Modern methodologies to settle disputes in construction projects and contains: disputes resolution methods and
disputes resolution obstacles.
Part B:
The Proposed ADR to settle disputes in Egypt contracts.
2.1 Questionnaire population
The research target is 500 companies working in the construction projects in Egypt. The studied population was the
companies (contractors, consultants and owners) work at both management and operational levels during the
construction process. The interviews aimed to classify responses arising from the questionnaire. The interviews
included project managers, site managers, project coordinators, planning, and contract administration engineers of
various disciplines.
2.2 Sample Size Determination
Statistical equations were used in order to calculate the sample size for the companies. Follow Said, [1] the sample size
of the unlimited population could be taken as:
(1)
Where SS = Sample size
Z = Z value (e.g. 1.96 for 95% confidence level)
P = percentage picking a choice, expressed as a decimal (0.50 used for sample size needed)
C = margin of error (8%)
Substituting these values in equation (1) leads to
Correction for Finite Population:

(2)
Substitute pop of 500; match the proposed classes of construction companies.
Interviews and e-mails have been successfully implemented with 120 experts with different scope of experience in the
Egyptian construction industry and different years of field experience for each construction category. The selected
sample has different field of experience to actually typify the different construction projects. They also selected with
suitable period of experience so that their answers can represent valuable information. The studied population was the
companies working in the fields: concrete structures, buildings, steel, roads, water and sewage, and electro-mechanics.
120 out of 140 questionnaires have been distributed, filled, completed by the informants in public and private projects
in Egypt, and then analyzed.
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2.3 Method Of Data Measurement

As provided by Odeh A. N., and Battaineh H. T. [15], The frequency of each type of claims, which firms were asked to
fill a questionnaire and were implemented in which they choose one of four possible options for the frequency of each
type of claims. A weight in a scale from 1 to 4 was given for each of the four frequencies with a weight of 1 for
Seldom, 2 for Sometimes, 3 for Often, 4 for Always, No weight was given when no response was
provided.
(3)
Where Wi is the weight assigned to the ith item;
Xi is the number of respondents who selected the ith option; and N is the total number of respondents (120 out of 140 in
this paper). To better understand the importance of the questionnaire contents, an importance index percentage was
then calculated:
(4)
Where h is the highest scale = 4
2.4 Results and Discussions
The results of analyzing main sources of disputes are distributed into five groups as shown in Fig. 1.
Fig. 1 Sources of disputes importance index percentage (Ip.I %)

Fig.1 shows a summary of each group (Ip.I %) rank to the main field of sources of disputes. The first most important
source of disputes among the fifth groups, is the "contract management", then the "contract document", the "financial
issues" is the third, the "project related issues" is the forth, and finally "other sources" is the fifth, which respectively
had an Ip.I% as: 74.04 %, 71.49 %", 67.8 %, 63.92 %, and 61.58 %. The results of analyzing dispute settlement
procedures according to contract type (FIDIC 1987, FIDIC 1999, ECC, AIA, Petroleum, Public, Private contracts) as
shown in Fig. 2
Fig. (2) dispute settlement procedures according to contract type
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The respondents ranked the international contracts (FIDIC 1999, FIDIC 1987, ECC and AIA) in the highest position,
with an Ip.I value 0.70, 0.55, 0.45 and 0.38 respectively. This means that the international contracts especially the
FIDIC contracts described the disputes settlement procedure in comprehensive way. On the other hand the respondents
also ranked the local contracts (petroleum, public and private contracts) in the lowest position with an Ip.I value 0.36,
0.30 and 0.23 respectively this means that the existing local contracts described the dispute procedures in non
comprehensive way, some of it did not indicate any issues regard disputes and some of these contract indicates the
dispute procedure in ambiguous way, which create difficulties to the contractor in haw to present and discuss his
dispute with the owner, where this issues can affect the contractor in losing his right to the dispute. As illustrated in
Table (1) the respondents opinion about the most disputes resolution obstacles is "weak process of dispute resolution for
local contract" as the first highest Ip.I value of 0.91.This means that existing dispute resolution procedure in Egypt is
weak and create difficulties for both contract parties to solve their disputes, where this issue can affect the contractor in
losing his rights to the dispute and the relation between the contract parties.
Table (1) disputes resolution obstacles

No.
disputes resolution obstacles
Ip.I
Ip.I %
Sub
Field
Rank
Weak process of dispute resolution for local contract.
0.91
91.46
No department for saving the project records.
0.86
85.63
Insufficient employee for review the contract to determine right time

for dispute identification / resolution
0.85
84.58
Lack of training on dispute management.
0.83
83.33
The owner postpone of the resolution till finishing project works.
0.80
80.42
Lack of the helping technical means in dispute analysis.
0.80
79.58
Insufficient authority delegated to the project site staff.
0.79
79.38
Lack of information from the contractor to support his position in the

dispute.
0.79
79.38
Weak possibilities of project manager in dispute settlement.
0.78
77.92
10
Weak involvement by the owner / contractor legal representative.
0.78
77.92
11
The supervisor and designer are the same.
0.73
72.92
12
Insufficient project funding.
0.68
67.50
2.5 Statistical Validity of Responses

Odeh A. N., and Battaineh H. T. [15], suggested ensuring the validity of the questionnaire by using the structure
validity test (Spearman test) to test the validity of the questionnaire structure by testing the validity of each group. This
test was used to measure the correlation coefficient between the theoretical and actual responses of the questionnaire
that have the same level of similar scale.
The following formula is used to calculate the Spearman rank correlation:
(
Where Rs= Spearman rank correlation

di= the difference between the ranks of the theoretical and actual responses of the questionnaire
n= the total number of respondents (120 out of 140 in this paper).
As illustrated in both tables (2&3), the result of the questionnaire respondents for both (source of disputes groups and
obstacles for dispute resolution) have perfect and strong correlation with theoretical responses from previous literatures.
Thereby, it can be said the questionnaire responses was valid for all responses.
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0.74
1.00
Perfect
correlation
2. Contract documents
0.75
0.71
0.99
Strong
correlation
3. Financial issues
0.78
0.68
0.99
Strong
correlation
4. Project related issues
0.68
0.64
0.99
Strong
correlation
5. Other Reasons
0.72
0.62
0.99
Strong
correlation
Ip.I
Actual
0.85
Theoretical
Rank
1. Contract Management
Ip.I
Rs
Groups
Theoretical
Actual Rank
Table 2 Sources of disputes validity
Correlation
Degree
Table 3 Disputes resolution obstacles validity
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3.CASE STUDIES
The data was collected via interviews with some companies' organizations in Egypt. Site visits and reviewing project
documents were the core of data for all case studies .summarized data of the collected information was presented by
concentrating on the nature, sources of disputes and the resolution methodology used by the contract parties to solve
their disputes.
Case Study No. (1)
The project is located in Egypt. It involves the construction of container terminal, the project basic information as per
the following:
Work Fields: Civil, Mechanical and Electrical works.
Project nature: Private project.
Contract type: Unit price contract.
Contract Period: 140 weeks.
Contract Price: 620,000,000 L.E.
Contract conditions: General conditions "FIDIC" with particular applications [16].
Disputes status summarized in Table 4
`Table 4 Case study No. (1) disputes summary
1st Dispute
Disputing
party
Contractor
2nd Dispute
3rd Dispute
4th Dispute
Contractor
Contractor
Owner
Subject/
Reasons
Additional costs for

extension of time for the
completion of whole of
works due to1st
revolution in Egypt on
25th Jan.2011(Force
majeure)
Shortage of fuel supply

/ Rommana Sand as
consequences of the 1st
revolution dated 25th
Jan.2011
Time and Cost

arising out of Project
revised completion
date due to delay
caused by civil unrest
conditions as
consequences of
Force Majeure
Deduct the
current delay
damages for the
contractor's
delay in
completion of
parts of works
Sec (D,ETJ and
ETI)
Sources of
dispute
Contract Management
(Delay the approval on
claims )
Contract Management
claims)
Contract
Management (Delay
the approval on
claims)
Financial issues
(Difference in
opinion for the
responsibilities
of delay
damage)
Consequences
Extra cost and time
Extra cost and time
Extra cost
Liquidated
damages as per
contract.
Disputed
amount in
time
28 days
114 days
Nil
Nil
Disputed
amount in
cost
3,121,000 L.E
1,114,000 L.E
4,820,000 L.E
8,500,000 L.E
How the
dispute was
treated
Not settled
Not settled
Not settled
Not settled
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Granted
extension of
time
Nil
Nil
Nil
Nil
Compensation
of cost
Nil
Nil
Nil
Nil
Resolution of Disputes by Negotiation

The Contractor requested many meetings with the Engineer, and the Employer's representative to discuss the disputed
issues. They conducted long meetings and negotiations reviewing all disputes to reach a compromise state then finally
they got a solution. Under this agreement the Employer agrees to waive all rights to deduct the delay damages due under
the provisions of the conditions of contract, sub clause 8.7. In consideration of the Employer's agreement with regard to
waiving delay damages, the Contractor agrees to waive all rights to additional costs arising out of extensions of time for
completion already granted and also agrees to withdraw all outstanding claims for extension of time.
Case study No. (2)
The project is located in Egypt. It involves the onshore construction services, the project basic information as per the
following:
Project nature: Petroleum project.
Contract type: Unit price contract.
Contract Conditions :particular conditions
Table 5 Case study No. (2) disputes summary
1st Dispute
2nd Dispute
3rd Dispute
Disputing party
Sub-contractor
Sub-contractor
Main-Contractor
Reasons
Sales Taxes invoices paid due

to change in local regulations
during construction
Additional piles requested

from the Main contractor
after completing the work
Apply Liquidated damages

for delay of Mechanical
completion date (MC)
Sources of
dispute
New laws affect the

construction time and budget
Contract Management
claim for additional cost)
Financial issues (Difference

in opinion for the
responsibilities of delay
damage)
Consequences
Extra cost
Extra cost
Extra cost and time
Disputed
amount in time
Nil
Nil
90 days.
Disputed
amount in cost
3.222.327L.E.
384.420 L.E
2.500.000L.E.
How the dispute

was treated
Not settled
Not settled
Not settled
Granted
extension of time
Nil
Nil
Nil
Compensation of
cost
Nil
Nil
Nil
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Resolution of disputes by mediation
The Sub-contractor requested many meetings with the Main contractor to discuss the disputed issues. They conducted
long meetings and negotiations reviewing the disputes to reach a compromise state then finally they didn't get a
solution. The Sub-contractor proposed to assign an external mediator to investigate his disputes also the main
contractor's disputes and the value of delay damages requested from the Main contractor. The Main contractor accepted
the sub-contractor suggestion, and then all parties suggested construction consulting firm and the Mediation procedure
finished as the main contractor made an offer that he agrees to waive all rights to deduct the delay damages. In
consideration of the contractor's agreement with regard to waiving delay damages, the sub- contractor have to agrees to
withdraw all outstanding disputes for extension of time and additional cost. The Sub contractor agreed to the main
contractor offer and the disputes settled.
Case study No. (3)
The project is located in Egypt. It involves the construction of storage plant, the project basic information as per the
following:
Project nature: Private project.
Contract type: Lump Sum contract (Turn Key).
Contract Conditions: Particular conditions.
1st Dispute
2nd Dispute
3rd Dispute
Disputing party
Contactor
Contactor
Owner
Reasons
Additional cost due to

extension of Asphalt area and
thickness for roads upon
instructions from Road
Authority
Additional cost due to

instruction of
constructing new buildings
not mentioned in the
contract
Additional expenses due to

contractor's delay on
completing some parts of
work.
Sources of dispute
Interposition of other parties

in contract management
issues
Contract Management
claim for additional cost)
Financial issues (Difference

in opinion for the
responsibilities of delay
damage)
Consequences
Extra cost
Extra cost
Extra cost
Disputed amount
in time
Nil
Nil
Nil
Disputed amount
in cost
606.903L.E
250.300 L.E.
1,100.000 L.E
How the dispute

was treated
Not settled
Not settled
Not settled
Granted extension
of time
Nil
Nil
Nil
Compensation of
cost
Nil
Nil
Nil
Resolution of disputes by arbitration
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The contractor requested many meetings with the Engineer, and the Employer's representative to discuss the disputed
issues. They conducted long meetings and negotiations reviewing the disputes to reach a compromise state then finally
they didn't get a solution and had to go to Arbitration as per the contract.
The results of Arbitration that obligating the second party (The contractor) to pay 850,453.14 L.E to the first party (The
owner) for the additional expenses due to the delay had been occurred by the mismanagement of the contractor for
completing the works.
Case study No. (4)
The project is located in Egypt. It involves the Construction of road, the project basic information as per the following:
Work Fields: Civil and Electrical works.
Project nature: Public project.
Contract type: Lump sum contract.
Contract Conditions: General conditions of Egyptian Tender Law (No. 89 / 1998), with Particular conditions.
st
1 Dispute
2nd Dispute
3rd Dispute
Disputing party
Contactor
Contactor
Owner
Reasons
Additional time and cost

due to delay occurred as
result of '' there is no
permits to start works''
Additional cost for stoppage

of work due to 1st revolution
dated 25th Jan. 2011 in Egypt
(force majeure)
Termination of contract
due to negligence of
contractor and delay of
work
Sources of dispute
Remote location (no access

to the site)
Acts beyond the responsibility

of contract parties
Financial issues
Consequences
Extra time and cost
Extra time and cost
Extra cost
Disputed amount
in time
90 days
28 days
Nil
Disputed amount
in cost
1,385,000 L.E
750,000 L.E
2,436,000L.E
How the dispute

was treated
Not settled
Not settled
Not settled
Granted extension
of time
Nil
Nil
Nil
Compensation of
cost
Nil
Nil
Nil
Resolution of disputes (not settled yet)

The contractor requested many meetings with the Engineer, and the Employer's representative to discuss the disputed
issues. They conducted long meetings and negotiations reviewing the disputes to reach a compromise state then finally
they didn't get a solution and had to go to Litigation as per the contract. This case not settled yet through the litigation
process, where the contractor submitted his disputes to court by hiring services of legal advisor, this took long time,
after waiting more than 24 months it still pending up to survey date. Form the collected cases studies. It can be
concluded that the collected cases studies confirms with the questionnaire results especially for sources and resolution
of disputes for the selected actual disputes cases studies. The four case studies presenting the sample of how actual
situation of disputes management process used in Egyptian construction industry for construction project sectors and
this is confirmed with questionnaire results as there is weak process of dispute resolution for local contract. The results
of the four case studies were summarized as shown in Table 8.
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Table 8 result of all case studies disputes summary
Case
No.
Type of contract
(1)
FIDIC Contract
(2)
Petroleum contract
Sources of disputes
Contract Management
& Financial issues
Contract Management &

Financial issues &other
sources.
Procedure
status
Negotiation
(Solved)
Mediation
( Solved )
Arbitration
(3)
(4)
Private contract
Public Contract
Contract Management
Financial issues
& other sources
( Solved )
Litigation
( Unsolved )
Lessoned learnt
Agreement of dispute cases by

negotiation process is the
shortest way.
Mediation process consumes
longer period than direct
negotiation between the project
parties but still better alternative
resolution than other
alternatives.
Arbitration is a good alternative
to litigation, often quicker and
less expensive, yet it is typically
more costly and time consuming
than other methods of ADR.
The stages passed by this case
show that litigation process is
costly as result of hiring a legal
adviser and consuming long
period.
4. ADR PROPOSED PROCEDURE FOR DISPUTE RESOLUTION IN EGYPT

Due to the lack of dispute resolution management in Egypt contracts and there is no procedure for actual ADR to settle
these disputes as stated in questionnaire results and case studies analysis , the researcher proposed the following
procedures and use each of them depending on the duration of the contract. ADR Proposed Procedure for Dispute
Resolution in Long Term Contracts in Egypt (more than 12 months).as shown in Fig. 3. ADR Proposed Procedure for
Dispute Resolution in Short Term Contracts in Egypt. (From 6 to 12 months) as shown in Fig. 4.
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Fig.4 Proposed procedure for dispute resolution in short term contracts in Egypt
The results of analyzing questionnaire respondents regarding proposed ADR procedure in both long and short contracts
are validated as shown in both Tables 9 and 10.
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5.CONCLUSIONS
The study proposes a reliable and accurate method to quantify and analyze sources of construction disputes .The
most important sources of disputes was "contract management (74.04 %)", the second was "contract documents
(71.49 %)", the third was financial issues (67.80 %)", the fourth was "project related issues (63.92 %)", and the
lowest one was "other sources'' such as force majeure, weak of construction laws, etc...., (61.58%)".
The study indicates that the contract management can be considered the main factor that can affect the existence of
disputes due to many reasons such as the issues related to the owner and the contractor, their management of the
contract, time schedule prepared by the contractor and required update.
Disputes resolution procedures are mentioned in different ways in most local contracts and the balance doesn't
facilitate disputes conditions and procedures. The existing local contracts are various, and changeable according to
the owner vision and some of them obligate the parties go to direct to arbitration then litigation without amicable
settlement conditions, on the other hand The International contracts especially the FIDIC contracts described the
disputes settlement procedure in comprehensive way, which gives rights to all contract parties (contractor/owner).
Dispute resolution procedure in Egypt is weak which create difficulties for both contract parties to solve their
disputes, where this issue can affect the contractor in losing his rights to the dispute and the relation between the
contract parties.
The proposed ADR procedure for long and short term local contracts is applicable, simple and takes the parties
satisfaction.
There is a need to revise the local construction project contracts and standardize it to include the proposed ADR for
disputes resolution through establishing an official committee which consists of all related sectors working in
public construction projects, contracting union, engineering syndicate, and specialist engineering consulting firms
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[7] Cheung, S.O. "Critical Factors Affecting The Use of Alternative Dispute Resolution Processes in Construction".
International Journal of Project Management, pp. 189-194, Vol. 17, No. 3, 1999.
[8] J.J.P (Basie) Verster1"Real Time Integrated Cost Planning and Control: Mitigation and Resolution of Claims",
Quantity Surveying Workshop Paper, University of The Free State, Bloemfontein, South Africa ,2006.
[9] Sai-On Cheung and Henry C. H. Suen. "A Multi-Attribute Utility Model for Dispute Resolution Strategy
Selection", Hong Konp, Taz Chee Aventie, Kowloon, Hong Kong, 2002.
[10] Taschuk, Peter P. and Chambers Stuart W. "The Latest in Dispute Avoidance Techniques". The Construction
Super-conference, 1999.
[11] FIAS. "Egypt as a Regional Platform for Alternative Dispute Resolution in the Arab World Guarantee Agency",
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[12] Barr. Bola Disu."Alternative Dispute Resolution, Law 517", National Open University of Nigeria, School of Law,
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IPASJ International Journal of Management (IIJM)

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A Publisher for Research Motivation........

Volume 2, Issue 12, December 2014

Application of Modern Methodologies to Settle

President of Suez Canal University, Professor of Steel Structure, Faculty of Engineering

Head of Civil Engineering Department, Professor of Concrete Structures, Faculty of Engineering

Business Development Manager - Petrojet Company, Cairo, Egypt

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Web Site: http://www.ipasj.org/IIJM/IIJM.htm

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IPASJ International Journal of Management (IIJM)

A Publisher for Research Motivation........

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Correction for Finite Population:

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IPASJ International Journal of Management (IIJM)

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2.3 Method Of Data Measurement

Fig. 1 Sources of disputes importance index percentage (Ip.I %)

Fig. (2) dispute settlement procedures according to contract type

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Table (1) disputes resolution obstacles

disputes resolution obstacles

Weak process of dispute resolution for local contract.

No department for saving the project records.

Insufficient employee for review the contract to determine right time

Lack of training on dispute management.

The owner postpone of the resolution till finishing project works.

Lack of the helping technical means in dispute analysis.

Insufficient authority delegated to the project site staff.

Lack of information from the contractor to support his position in the

Weak possibilities of project manager in dispute settlement.

Weak involvement by the owner / contractor legal representative.

The supervisor and designer are the same.

Insufficient project funding.

2.5 Statistical Validity of Responses

Where Rs= Spearman rank correlation

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4. Project related issues

Table 2 Sources of disputes validity

Table 3 Disputes resolution obstacles validity

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Additional costs for

Shortage of fuel supply

Time and Cost

Extra cost and time

Extra cost and time

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