New mediation centre to resolve disputes in construction industry launched

SINGAPORE: A dedicated mediation centre has been set up for companies in the construction industry to resolve disputes more quickly. 

The Singapore Construction Mediation Centre (SCMC) was launched on Tuesday (Mar 12) by the Singapore Contractors Association (SCAL), after it noted an increasing demand for mediation in construction disputes.

“Time management is crucial to achieve profitability in construction projects. Hence, it is essential that parties involved in disputes move quickly to resolve them with minimum impact on the respective companies,” said SCAL president Kenneth Loo.

According to SCAL, the most common disputes in construction relate to payment, defects and liquidated damages.

Since 1997, construction disputes have been handled by the Singapore Mediation Centre (SMC). 

Forty per cent of the disputes it handled in 2017 were construction related, according to figures from SMC, the most common alongside company and shareholder disputes.

“The construction value chain involves many stakeholders with different interests. We recognise that disputes will happen from time to time. However, we should always strive to encourage the early and amicable resolution of potential disputes,” said Minister of State for National Development Zaqy Mohamad, who was at the launch event.

To seek mediation through SCMC, at least one of the parties in the dispute has to be a SCAL member or registered under SCAL’s Singapore List of Trade Subcontractors.

Mediation fees range from S$800 to S$4,300 per day per party, depending on the claims amount.

SCAL currently has about 3,000 members.

Twenty-four mediators have been appointed by SCMC, and all have a background in construction or are experienced in mediating construction disputes.

One of them is Ms Monica Neo, a practising lawyer specialising in the construction industry. She said mediation does not take much time, usually within half a day to one day.

In her experience mediating construction disputes at SMC, 80 per cent of cases are resolved, she said.

“If they (parties involved) cannot agree, if they want to pursue their case, they would have to end up going to court or arbitration, depending on what the contract says, which will be a tedious and expensive process,” she added.

The new mediation centre starts operations on Wednesday.