Resolution of Construction Disputes Arising from Major Infrastructure Projects in Developing Countries – Case Study of Ghana

Abstract

This study undertook a critical examination of developing countries’ experiences of infrastructure-related construction dispute resolution using Ghana as a case study. It investigated the dispute resolution processes and procedures which parties to infrastructure construction disputes employed to address such disputes. To gain a better understanding of the dispute resolution processes, the study also assessed the legal framework for procurement and contract formation and other contextual issues which influenced parties’ dispute resolution choices. Consequently, strategies for efficient and effective dispute resolution were developed. The main rationale for the study was the need for effective and efficient dispute resolution processes in the context of infrastructure projects in developing countries. The literature indicated that disputes often occurred on such projects in developing countries that were resolved at great cost mainly by arbitral tribunals in the developed world. However, there was limited information on the extent to which other dispute resolution mechanisms were utilised prior to resort to international arbitration. The study adopted a qualitative research approach informed by the interpretivist philosophical paradigm. Data was collected from fifty-six interviewees from the State as the Employer and foreign contractors through semi-structured interviews and documents and analysed using qualitative data analysis procedures associated with grounded theory research such as coding, constant comparison, memoing and diagramming, and doctrinal legal analysis. It was found that engineer’s determination, negotiation and international arbitration were the most used dispute resolution mechanisms. Others such as mediation were rarely used. The dispute resolution processes were characterised by high cost, low satisfaction with outcomes and negative effect on relationships. It was also found that the extant dispute resolution processes were the product of the nature of the parties, the context in which they operated and their responses to the context. Factors such as lack of coordination among the Employer’s sub-units, human resource constraints and political interference had varying negative impacts on dispute occurrence, dispute resolution system design and the dispute resolution processes. To deal with these challenges and achieve efficient and effective dispute resolution processes, four sets of remedial strategies (condensed into a model called the Dispute Resolution Efficiency Cycle (DREC)) were proposed. The study has provided empirical evidence which has addressed some of the gaps identified in the literature on issues such as absence of information on pre-international arbitration dispute processes. The study has also highlighted the impact of context and dispute system design on dispute resolution. Contributions to practice included diagnosing challenges with the extant dispute resolution processes and proposing possible remedial strategies.