A study on dispute resolution by adjudication and arbitration in Hong Kong after the experience of the technical circular (works) no. 6/2021

Abstract

It is observed that the Hong Kong Government has recently adopted an administrative and contractual approach, through the means of the Technical Circular (Works) No. 6/2021 (“the Circular”), to encourage the adoption of adjudication as the major tool for dispute resolution within the construction industry. However, literature in this field has been rare and outdated. Therefore, this study aims to provide insights on the actual response of the construction industry on adjudication, which is promoted by the Technical Circular, and arbitration, which is the traditional dominant means of resolving construction disputes in Hong Kong, on the current setting. First-hand data is collected as the main source of research information, in which questionnaires and further interviews on selected respondents are conducted to gather the opinions of various stakeholders, ranging from clients such as government representatives to contractors of different tiers and consultants, on adjudication and arbitration before and after the implementation of the Technical Circular. Research analyses generally suggest that under the Technical Circular, (i) there is a growing preference among the industry for adopting adjudication over arbitration as a whole for dispute resolution; (ii) it is projected by various stakeholders that the industry will have higher frequency to adopt adjudication and hence fewer arbitration proceedings as a whole; and (iii) the industry has cultivated a preference for adjudication over arbitration to resolve disputes in terms of maintaining party relationship. These three research findings have largely validated the three hypotheses set up for this research correspondingly. At last, further to the findings, recommendations are given to optimize the use of adjudication as the dominant dispute resolution tool in Hong Kong construction industry, which are increasing its scope of application, promoting a greater understanding among stakeholders towards adjudication, and enhancing transparency and guidance on the execution of construction contracts.