Feature - The United Nations Convention on International Settlement Agreements Resulting from Mediation - an end to other dispute resolution methods in the construction industry?
By Construction Dispute Resolution Committee, the HKIE

With complex designs, limited resources, different expectations and often time constraining deliverables within the construction industry, disputes are bound to happen, no matter how prepared one is in proactively managing a project from conceptual design to commissioning. Most practitioners are aware that standard forms of contract cannot predict or prevent all risks, whether inherent or apparent. In these kinds of situations, parties have no choice but to refer to the provisions of the contractual documentation to seek some forms of redress. Majority of these redress mechanisms include mediation as a means of settlement of the parties’ differences. However, those familiar with the industry are aware that no one takes mediation seriously and they simply go through the motions to satisfy the needs of the dispute resolution provisions within the contractual documentation, as mediation is a form of non-binding dispute resolution process that renders a settlement in the form of a legally binding contract, known commonly as a “mediated settlement agreement”.

In the last ten years the HKSAR Government has been actively trying to encourage the community to adopt mediation as a desirable method in resolving one differences. Nevertheless, the uptake within the industry has not been forthcoming to say the least, given that the roots of mediation in Hong Kong do stem from the construction industry. In a speech by The Honourable Wong Yan-lung, the then Secretary for Justice at Hong Kong Mediation Council Annual Dinner on Friday, 17 March 20061, Mr Wong highlighted the advantages of mediation, “…As early as in 1984, the Government began a trial scheme for mediation of construction disputes. Since the early 1990s, the Government has supplemented its use of arbitration for dispute resolution with other alternative dispute resolution (ADR) methods. In particular, mediation was adopted not only for the Airport Core Projects (ACP) contracts but for all major public works contracts. This has proved very effective in reducing the number of claims which would otherwise proceed to arbitration… Mediation remains an ideal method for the resolution of construction disputes due to its inherent flexibility, the ability of the mediator to discuss issues with the parties confidentially, and the scope for adopting a pragmatic commercial approach. It is also much less expensive…”. The question is why the industry has moved away from this collaborative form of amicable settlement of one’s difference? A possible answer is that mediated settlement agreements are merely a contract, and if one does not honour his/her obligations as stipulated in the contract, the other party has no choice but to seek different forms of determinative methods of dispute resolution such as arbitration and litigation. To some, this non-binding nature of mediation may well have worked in the past but society has adapted and changed. People nowadays expect a result that has some teeth and substance, so that they can seek immediate relief should someone not honour their responsibilities as agreed in the mediated settlement agreement.

The introduction of “The United Nations Convention on International Settlement Agreements Resulting from Mediation” (commonly known as the “Singapore Convention”) in August 2019 might reverse one’s appetite to use mediation again, given the attributes of mediation some say do far outweigh other forms of dispute resolution methods in terms of costs and speed.

The Singapore Convention applies to an agreement resulting from mediation and is concluded in writing (recorded in any form including electronic means of communication) in which (a) at least two of the parties to the settlement agreement have their places of business at difference states; or (b) the state in which the parties to the settlement agreement have their places of business is different from (b)(i) the state in which the substantial part of the obligations under the settlement agreement is performed; or (b)(ii) the state with which the subject matter of the settlement agreement is most closely connected2. As such, the Singapore Convention applies to mediation settlement agreements of an international nature, whereas those mediation settlement agreements of a domestic nature, one will need to seek redress through the local court system. A possible alternative would be for the various legislations3 that govern mediation in Hong Kong to be amended to adopt and mirror some of the Singapore Convention’s principles into local legislation to cater for mediated settlement agreements of a purely domestic nature. With such provisions in place, mediated settlement agreements would carry weight and the industry might consider revisiting this form of dispute resolution method as a viable means of redressing construction and engineering disputes.

The success of the Singapore Convention lies in the enforceability of mediated settlement agreements, nevertheless the competent authority in which a party seeks enforcement may refuse such enforcement where4:

i. a party to the mediated settlement agreement is under some incapacity;
ii. the mediated settlement agreement is procedurally and technically ineffective;
iii. the mediated settlement agreement is not binding or not final, or has been subsequently modified;
iv. the obligations in the mediated settlement agreement have already been fulfilled or are not clear or comprehensible;
v. granting relief would be contrary to the terms of the mediated settlement agreement;
vi. there is a serious breach by the mediator of standards applicable to the mediator or the mediation, without which breach that party would not have entered into the mediated settlement agreement;
vii. there is a failure by the mediator to disclose circumstances that raise justifiable doubts as to his or her impartiality or independence and that failure has a material impact or undue influence on a party which would not otherwise have entered into the settlement agreement;
viii. it would be contrary to the public policy of the state where enforcement is sought or the subject matter of the dispute is not capable of settlement by mediation under the law of the state where enforcement is sought.

With proper legal advice, disputants can prevent some or the majority of the matters raised above from happening. However, there is one area that may still create some uncertainties in the enforcement of mediated settlement agreements that is the subject of “serious breach by the mediator of standards applicable to the mediator or the mediation”. The word “standard” denotes “a level of quality or attainment”. Defining a mediator’s quality is easier said than done, as some mediators are born with the gift of the gab, who simply can sell snow to eskimos, whereas others need practice to achieve perfection. On top of this, some disputants view matters in totally different perspectives. A top-notch international mediator may sometimes not meet the needs of the party or parties involved in the process, as there is an element of subjectivity as well as persona of the mediator in question. Most people involved with mediation are aware that there is not a single standard that can claim to be the universal gold standard for mediators. Majority of the standards are developed with the local context in mind, with some claiming to be a mixture of local and international but the reality is that there is simply not a single universal standard applicable for mediators across the global. Coupled with the different perspectives and outcomes for mediators in terms of accreditation/credentials, there is scope for one to manoeuvre to convince the competent authority that the meditator in question fails to meet the standards of a reasonable prudent mediator. In the short term, this could create problems but with developed case law and guidance, and the judiciary will be more informed of the matter and decisions across continents will eventually become more consistent and predictable.

In a recent survey conducted by the Singapore International Dispute Resolution Academy of the Singapore Management University5, respondents stated that “In selecting mediation, users indicated impartiality/neutrality (86%), speed (85%) and confidentiality (83%) as ‘absolutely crucial’ or ‘important’ factors influencing their choice of process”. With the Singapore Convention now in place (subject to enactment and adoption into various jurisdictions), one would expect mediation to gradually develop further as the mainstream process that most disputants will prefer to adopt before engaging in other forms of ADR. Engineers with the necessary skill sets in engineering and mediation would ideally be placed to assist disputants within the construction industry as mediation is a process that focuses on the collaborative approach of identifying issues, exploring and generating options without adjudicating the dispute, with the ultimate goal of reaching an agreement in relation to the resolution of the whole, or part, of the dispute which disputants can comfortably accept and move forward without compromising one’s core business values and exposing one vulnerabilities in the public domain, which may have adverse consequences. In the coming years, some predict that construction projects are bound to increase, and disputes of some kinds and forms are inevitable. Having the technical and mediation skills under one’s belt, some engineers may be well placed to offer such mediation services to the industry and the public as a secondary profession.

References
1 Department of Justice of the HKSAR Government. 2006. The Benefits of Mediation. Retrieved 23 October 2019, from https://www.doj.gov.hk/eng/archive/pdf/2006/sj20060317e.pdf.
2 The United Nations Commission on International Trade Law. 2019. Article 1 of the Singapore Convention. Retrieved 23 October 2019, from https://uncitral.un.org/sites/uncitral.un.org/files/singapore_convention_eng.pdf.
3 Department of Justice, Cap 609 Arbitration Ordinance and Cap 620 Mediation Ordinance of the Laws of Hong Kong.
Retrieved 23 October 2019, from https://www.elegislation.gov.hk/.
4 The United Nations Commission on International Trade Law. 2019. Article 5 of the Singapore Convention. Retrieved 23 October 2019, from
https://uncitral.un.org/sites/uncitral.un.org/files/singapore_convention_eng.pdf.
5 Singapore International Dispute Resolution Academy. 2019. The 2019 International Dispute Resolution Survey: Currents of Change - Preliminary Report.

This article was prepared by Ir Prof Christopher To of the Construction Dispute Resolution Committee, the HKIE.

Feature - Improving worker safety: changing the way we install split type air-conditioners
By Ir Dr Eddy W T LAU

Hong Kong’s private residential buildings are usually designed as luxury apartments. Their building envelopes often incorporate intricate design details that complicate repair and maintenance of external building services equipment. The Hong Kong Construction Industry Employees General Union and other worker organisations have raised concerns about the installation method of split type air-conditioning (AC) units in new private residential developments.

Problems arise because external scaffolding must be erected when AC units need repair and maintenance in future (see Figure 1). This can cause fatal accidents. This paper reviews the problems and proposes a new approach to installing AC units, with the hope that building services engineers, structural engineers and the local building authority can work together to upgrade our designs, in order to improve safety standards for our maintenance workers.

Design issues
Currently, the external walls of some luxury residential buildings are cladded with aluminium panels. The thickness of the panels is typically 3 mm, which is insufficient for fixing metal supports for external scaffolding. Other buildings might be cladded with marbles, where drilling is often impractical as it will easily damage the stones. In addition, building window designs often incorporate large observation panes with small openable windows on the sides. This design can cause difficulty for workers to reach the required drilling positions for erecting scaffoldings.

In residential flats, a split type AC unit is usually installed behind a louvre under the bay window of the flat upstairs (see installation method “A” in Figure 2). Not only will the hot air affect the upstairs flat when repair or replacement has to be done for the AC unit of the flat downstairs, the workers also must gain access to the upstairs flat to erect the scaffolding. Besides, the relatively thin bay window slab also makes it difficult to securely install the triangular steel brackets for supporting the scaffolding as only one out of three bolts per bracket can be fixed on the slab.

In some alternative designs, AC units are installed on dedicated concrete platforms outside bathrooms or kitchens (see installation method “B” in Figure 3). Although this is an improvement over the previous method, workers must still climb through small windows and work in poorly lit, narrow spaces to carry out repair and maintenance works. Under these conditions, there is a risk of people or objects falling off the building.

Proposed solutions
In countries such as Japan and Thailand, flats are often equipped with spacious balconies. Split type AC units can be installed at a low level on the balcony corner, or at a higher height on the balcony side walls provided there is sufficient headroom (see installation method “1” in Figure 4). Workers can then clean and maintain the AC units in a well-lit spacious location, without the need for scaffolding or the risk of people or objects falling onto the street below. This method tremendously reduces maintenance cost.

Unfortunately, this method is incompatible with Hong Kong’s current design practice where balconies/utility platforms are usually designed to be small to match the gross floor area (GFA) concession limits. Besides, if AC units are located at a low level, the parapets have to be permeable in order to facilitate heat rejection. This is also incompatible with local balcony design where glass balustrade is commonly used. Although the mesh-type parapets of utility platforms are compatible, their areas are often too small to incorporate the equipment. To make this solution workable, the Buildings Department should modify its existing practice notes by allowing the utility platform to be combined with the balcony and AC plant room to increase overall area.

If building designers still prefer installing new AC units under bay windows, a further proposed solution would be to add an access panel either at the side or above the AC unit location (see installation method “2” in Figure 5). Instead of placing the AC unit under the bay window of the flat upstairs, the bay window of the subject flat should be chosen. This would prevent maintenance work or hot air from disturbing the upstairs flat. Again, the Buildings Department would need to revise its practice note because long wide bay windows are now disincentivised due to significant reduction in GFA concessions introduced in January 2011. This reduction has caused many developers to adopt curtain walls instead. It is believed, however, that bay windows should not be discouraged in Hong Kong as they can serve two important green functions - first, providing a rain-proof location for drying clothes and second, providing a convenient location for indoor planting.

Conclusion
“Prevention is better than cure” is the essence of designing for safety. Therefore, engineers and designers should consider adopting the proposed approach for installing split type AC units. Such improved methods would hopefully encourage innovative designs to address foreseeable risks to occupational safety during a building’s entire life cycle.

Epilogue
Coincidentally, subsequent to the writing of this article, the Buildings Department has revised JPN-1 and 2 that promulgate the design requirements for AC platform combined with balcony or utility platform. The new requirement is similar to Installation method “1” proposed in this article. For details, readers are advised to read JPN-1 and 2 and related code of practice.

About the author: Ir Dr Eddy W T Lau is a Fellow of the HKIE. He is the Head of Green Labelling at Hong Kong Green Building Council.


Figure 1: Workers erecting an external scaffolding


Figure 2: Existing installation method “A”


Figure 3: Existing installation method “B”


Figure 4: Proposed installation method “1” 


Figure 5: Proposed installation method “2”

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