The Construction Development Board (CDB) adopted alternative dispute resolution or out-of-court settlement for construction related disputes in 2014.
Since then the CDB has been playing a key role in settling conflicts arising between the involved parties. From 2015 till December last year, the CDB facilitated and resolved 43 cases, worth of Nu 1bn through arbitration- an alternative way to resolve disputes outside the court.
According to CDB officials, construction sector is regarded as one of the most conflict and dispute ridden industry, and said “traditionally parties involved would enter into often costly and lengthy litigation. So, arbitration has been effective in resolving construction disputes owing to its flexibility and fastness.”
Officials also said, parties involved in the dispute have the independence to choose their own arbitrators. “Arbitration is time bound and it is not formal like courtrooms, so parties can express whatever they have. Moreover, arbitration doesn’t take much time and it is cost effective,” said Yeshi Phuntsho, the Legal Officer of CDB.
Through arbitration, the government agencies recovered nearly Nu 120m from contractors involved in various cases from 2015-17.
Not wanting to become arbitrators
Considering the effectiveness of arbitration, the Construction Development Board conducts trainings to enhance arbitration and mediation skills of arbitrators. However, not many people want to be arbitrators and that is due to nominal fee.
“Government has to build the capacity of the arbitrators initially till a time that it becomes commercial and people can practice it. At present, people are reluctant to become arbitrators because the fee is very low. They get Nu 10000 for being arbitrators and that amount is very small,” said Mahendra Chhetri, who is an arbitrator.
He added: “Even to handle a simple case, it costs more than the fees of arbitrators. Short courses, trainings, and sensitisation must be widespread so that the arbitrator’s job becomes attractive.”
Today, there are 29 certified arbitrators in the country.
