The key to resolving complex disputes? Don't wait till the last minute.

SIMC Specialist Mediator and Clyde & Co Partner Eugene Tan discusses the potential of mediation for construction disputes.

“it’s not a very large industry, and there are very many common business partners… Maintaining and preserving those relationships is beneficial for the parties in the longer run. And in those cases, arbitrating or litigating may damage these relationships.”

Watch the full interview or read the interview transcript below. We thank Eugene for sharing his views.

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I’m Eugene Tan. I’m a partner with Clyde & Co. Classis in Singapore. I lead Clyde & Co’s  Southeast Asian construction practice. And I of course specialise in projects and construction for the last 19 years.

I think, you know, Southeast Asia is in the midst of, of course, infrastructure growth, and of the region, we see a lot of infrastructure projects, construction, as well. And what you also see in these projects are parties, multinational parties, each with a different perspective and cultural background. And this often leads to disputes or differences.

Let me give you an example. Very frequently, in projects, there would be differences over the interpretation of data, there is also going to be difference over the risk that each party has undertaken and reflected in the terms of the contract. Now, sometimes what it just requires is for parties to address these concerns and resolve it then than rather than to put in a claim and to wait until the end of the project before it’s resolved. Because when the parties wait, what happens is this: rather than focus on what’s important in a project, which is the progress and timely completion of it, they start getting sidetracked by claims, and with an eye to litigation or arbitration at the end of the project. And when that happens, you know, parties become entrenched in their position, they start looking at preserving and reserving their rights, rather than finding a speedy resolution or solution to the problem. And that, of course, affects the working relationship, which also affects, at the end of the day, projects.

So I try and advise clients to consider mediation before commencing arbitration. And I think if there’s something that the industry could benefit from, in terms of dispute resolution, it would be to consider a mediation, perhaps, at a much earlier stage, rather than after arbitration proceedings have commenced.

And mediation allows parties to fashion a result that they can both live with, but specifically also in the construction industry – it’s not a very large industry, at least here in Singapore, and there are very many common business partners, some of which have long standing, and maintaining and preserving those relationships is beneficial for the parties in the longer run. And in those those cases, arbitrating or litigating cases. And winning may damage these relationships.

I would say that I think there’s huge potential for growth for mediation.

This also coincides with the fact that many clients are now looking for a cheaper and more efficient alternative to litigation or arbitration to resolve their disputes.

I had one experience where I was representing a Mongolian party against a Chinese party in an arbitration. And both of them decided to refer the dispute to the SIMC. And we’re very, very satisfied with the outcome. I think that is an indication of what kind of potential there is for mediation in the region.