Disputes in Construction Projects in Selangor, Malaysia: Alternative Dispute Resolution Methods and Challenges

Chhay, Vuoch Y (2022) Disputes in Construction Projects in Selangor, Malaysia: Alternative Dispute Resolution Methods and Challenges. Final Year Project (Bachelor), Tunku Abdul Rahman University College.

Text RQS#Chhay Vuoch Y#18WVR01056I - VUOCH Y CHHAY.pdf Restricted to Registered users only Download (926kB)

Abstract

Construction disputes are inevitable and they have cost hundreds of millions of dollars every year. Malaysia’s construction industry has been prospering with thousands of projects across the whole country, however, disputes that arise in this sector tend to jeopardize this potential growth. The disputes were reported to be solved through Arbitration, Adjudication, and Mediation. Therefore, this research study is carried out to identify the factors causing disputes in construction projects in Malaysia, to identify ADR methods used to solve disputes in construction projects in Selangor, Malaysia, and to identify the challenges faced in the implementation of those ADR methods. The literature review is conducted to find out relevant previous studies on the three objectives of this study. It is then followed by distributing questionnaire survey to Quantity Surveyor, Architect, Engineer, Mediator, Adjudicator, and Arbitrator in Kuala Lumpur and Selangor. The data collected from the targeted respondents are analysed through Statistical Package for Social Science (SPSS) software using Cronbach’s Alpha Analysis, Descriptive Analysis, and Multiple Response Analysis. From the results obtained, the first objective of this research is achieved as it is found that disputes in construction projects in Malaysia are caused by payments, delay and extension of time, variations, contractual matters, contract documents, and unit prices. Payment issues are highlighted in the results. The second objective is also achieved as it is found that four methods have been identified namely, Negotiation, Mediation, Adjudication, and Arbitration. Negotiation remains the priority when it comes to dispute resolution. Last but not least, the third objective is achieved as it is found that the common challenges in the implementation of those ADR methods are time and cost issues, one of the parties is not interested in settlement, complicated and tiresome procedure, no proper documentation of the case for future use, damage of reputation and relationship of the parties due to the involvement of third parties, disputing parties want a legal precedent, no guarantee that ADR would resolve disputes, and insufficiency of personnel. Time and cost issues are the main challenge faced. The findings in this research will benefit the construction team players on identifying factors that can potentially cause disputes and ADR methods available to be used in case disputes arise. Furthermore, with the research findings, the government, related organisations and boards can identify the challenges faced in the implementation of ADR methods in construction projects. Hence, rules and regulations, and policies can be made as appropriate to mitigate those challenges and to uplift the usage of ADR in the construction industry.