‘Mediation key to resolving contract disputes in construction sector’

Mediation has been identified as a key strategy for resolving contract disputes in the construction sector as it will not only boost business growth but also further enhance investment opportunities even as savvy investors now beam their searchlight on Nigeria as one of the most profitable countries in Africa and the world.

The use of Public Private Partnership (PPP) as a viable approach for providing infrastructure through private equity firms has further heightened the need for mediation rather than litigation for resolving disputes, as most firms contracted to execute same projects sometimes have different cultures.

“Because of the recent increase in private companies’ participation in providing infrastructure, the possibility of dispute arising is imminent; thus, it is in the best interest of construction companies to employ mediation as against litigation at times of contract disagreements,” said Madibe Cisse, senior counsel, African Finance Corporation (AFC), Nigeria, at the first Lagos Court of Arbitration (LCA) West Africa Regional and ADR conference recently.

Opuyo Oforiokuma, managing director, ARM Infrastructure, Nigeria, said the new trend has further highlighted the need for a proper preparation of project contracts to inculcate all parties involved in a project including the end users.

Using the construction of the Lekki-Epe Expressway and toll plaza as a case study, Oforiokuma stressed that such huge projects are only successful and sustainable when all parties involved in such projects have been clearly communicated their roles and responsibilities during and after project execution.

He further advised that contracts should be clearly defined from the onset, mediation clauses should also be enshrined in contract documentations to afford the firms or parties involved the luxury of mediation before any litigation process could commence.

“No firm is in business to waste time and resources on litigation, everybody is in business to maximise profit, hence it is important that construction and private equity firms seek mediation clauses in contract documents,” he said.

Referring to the LCA, which is an independent, private-sector-driven international centre for the resolution of commercial disputes through arbitration and other forms of ADR services, industry chiefs at the conference urged an effective implementation of arbitration resolutions, adding that such move would play a vital role in attracting more investors into the country’s construction sector.

Eyitemi Mojuetan, general counsel, Chevron Nigeria, noted the importance of highly-skilled arbitrators in settling business disputes between warring factions.

By: ODINAKA MBONU