Statutory Adjudication for the Sri Lankan Construction Industry

Abstract

Disputes are pervasive in the Sri Lankan construction industry, causing project delays and financial burdens. Common dispute resolution methods include negotiation, conciliation, mediation, adjudication, and arbitration. While adjudication is mandatory in Sri Lankan construction contracts, its ineffectiveness and lack of enforceability have prompted the exploration of statutory adjudication. This study investigates the barriers to implementing statutory adjudication in Sri Lanka’s construction industry and proposes solutions. Using a qualitative approach, the study involves literature reviews and interviews with industry professionals. Findings indicate a growing preference for adjudication due to its efficiency and reduced adversarial impact. However, the absence of legislative support poses a significant obstacle. Recommendations include enacting statutory adjudication laws, government involvement, creating frameworks and guidelines, and establishing dispute resolution organizations and court systems. Comparable systems in the UK, Australia, and Singapore provide insights into the types of disputes eligible for resolution. Overcoming operational issues such as biased authority nominations, short adjudication timeframes, and insufficient adjudicator regulations is crucial. Implementing statutory adjudication can enhance confidence among stakeholders, cash flow management, and dispute resolution in Sri Lanka’s construction industry, ultimately fostering its growth and sustainability. This study emphasizes the need for legislative backing, government engagement, and comprehensive system development to facilitate statutory adjudication’s successful integration. Recommendations also include promoting awareness, training adjudicators, and encouraging professionals to become adjudicators in the industry, ensuring the construction sector’s continuous improvement.