Pakistan Construction Disputes Report 2024
MK Consultus, in collaboration with Pakistan Engineering Council, Chartered Institute of Arbitrators (CIArb) and TCC ADR Centre Pakistan, is surveying to produce the first comprehensive research on the causes of disputes in Pakistan’s construction industry. The survey findings will pave the way to understanding the key causes of disputes and help develop appropriate strategies to avoid them.
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PCDR 2024 coming soon!
Mian Sheraz Javaid
Barrister Mian Sheraz Javaid, Managing Partner at MK Consultus LLP, practices as a counsellor, arbitrator, mediator, and adjudicator, dual-qualified civil engineer and barrister, with more than 20 years of collective experience in all aspects of construction contracts, litigation, and dispute resolution. Mr. Javaid is highly qualified in dealing with energy, power, and infrastructure-related matters. His core area of expertise is dispute avoidance with emphasis on arbitration and expert determination for commercial entities both in the private and government sectors.
Mr. Javaid has made significant contributions to Pakistan’s dispute resolution landscape. He serves as the founding Chair for the Chartered Institute of Arbitrators (Ciarb) – Pakistan Branch and the Pakistan International Disputes Weekend. In addition to being a Fellow at various institutions and he is also is an Approved Faculty List (AFL) trainer at Ciarb and has trained hundreds of dispute resolution practitioners across Pakistan.
MK Consultus LLP (MKC)
MK Consultus LLP (MKC) is an end-to-end solution provider law firm delivering dispute avoidance, management and resolution through its core service offering in legal consultancy, advisory, litigation, and alternative dispute resolution. We are the only dedicated legal practice in Pakistan for Construction and Engineering Law and are uniquely positioned to advise our clients throughout the project lifecycle, focusing predominantly on infrastructure, building and civil construction, oil & gas, energy and power sectors.
Our dual-qualified engineers and lawyers provide excellent advice on all aspects of Construction and Engineering Law and regularly act as arbitrators, providing expert determination on claims relating to engineering, quantum and delay issues. Having offices in the UK and Pakistan, we are uniquely placed to serve cross-border issues and have developed unique partnerships with legal and professional consultancies across the world to serve our clients’ needs.
Our mission is to provide our clients with unprejudiced advice, so they know where they stand. We are passionate about raising the profile of construction law in Pakistan and provide a comprehensive service for contentious and non-contentious construction and engineering law matters.
Guest commentary by
Mian Sheraz Javaid
Partner MKC
Chair CIArb Pakistan Branch
You cannot propose a solution unless you know the problem. Pakistan has seen enormous construction activity in the past few years mainly due to the development of the China-Pakistan Economic Corridor (CPEC), currently amounting to an investment of US$ 70 billion. Public sector development is the compass to gauge the progress of any country. Public funds should be well spent, and the timely completion of projects saves money and cause for dispute. With the involvement of Chinese contractors, the need for skilled labour, the use of innovative technology, and efficient mechanisms for dispute resolution is greatly felt. The main objective of PCDR is to identify the prevalent problems within the construction industry, following which a solution can be devised and implemented.
The data shows that the top causes of disputes in Pakistan are payment delay, access to sites, and the behaviour and competency of people, reflecting Pakistan’s similarity to other jurisdictions. The main areas requiring attention are efficient dispute avoidance and resolution mechanisms.
The management of disputes in other jurisdictions serves as a valuable source for devising effective dispute resolution mechanisms on a domestic level. In the United Kingdom, statutory adjudication plays a vital role in safeguarding the financial lifeline of contractors and other stakeholders. Matters are decided within 28 days, although the findings can be challenged in other forums. However, the intention is to deal with disputes actively and efficiently. Mediation is also becoming a well-recognised phenomenon and Courts have shown their inclination in resolving disputes through this avenue, especially when contractually mentioned in dispute resolution clauses. In Hong Kong, it is mandatory to appoint a Dispute Resolution Advisor for large construction projects and Dispute Boards are also being used for early neutralisation of problems in modern best-practice jurisdictions.
Unfortunately, Pakistan lacks the mechanism for efficient dispute resolution regarding the construction industry. The Arbitration Act was enacted in 1940, prior to the inception of Pakistan, and is still in force without amendment.
As the Pakistani jurisdiction does not lend great support to mediation or ADR, the resident entities consult the courts. Not surprisingly, the Civil courts in Pakistan have a backlog of 2.5 million cases, and parties face timeconsuming litigation. It is due to these reasons that Parties in dispute naturally prefer the option to negotiate amongst themselves or follow ADR to avoid futile endeavour of going to the courts.
Arbitration is a mandatory course to be adopted for dispute resolution for all international contracts. The Arbitration and Reconciliation Committee of the Pakistan Engineering Council is currently the only forum for the resolution of construction disputes, although it is highly underused.
A unique data set is collected for this report. Much effort was expended, not only in reaching out to the target niche, but also to convince them to participate in the survey. This was especially so with regards to the public body officials.
At this point in time, Pakistan needs modern and tested mechanisms that support the construction industry. Beginning from contract clarity to the use of standard forms of contracts.
Pakistan Engineering Council (PEC)
The Pakistan Engineering Council is a statutory body, constituted under the PEC Act 1976 (V of 1976) amended upto 1st December 2016, to regulate the engineering profession in the country such that it shall function as key driving force for achieving rapid and sustainable growth in all national, economic and social fields. The council shall as its mission set and maintain realistic and internationally relevant standards of professional competence and ethics for engineers, and license engineers, and engineering institutions to competently and professionally promote and uphold the standards.
PEC interacts with the Government, both at the Federal and Provincial level by participating in Commissions, Committees and Advisory Bodies. PEC is a fully representative body of the engineering community in the country.
Its main statutory functions include registration of engineers, consulting engineers, constructors/operators and accreditation of engineering programmes offered by universities/institutions, ensuring and managing of continuing professional development, assisting the Federal Government as Think Tank, establishing standards for engineering products and services besides safeguarding the interest of its members. The council shall encourage, facilitate and regulate working of professional engineering bodies for creativity and as custodians of engineering under the umbrella of the Council.
PEC has also been providing support to the Government in conducting technical enquiries and recommending remedial measures on the subjects referred. Over the years, the Pakistan Engineering Council has become an influential voice, which speaks for the engineering profession as a whole in the country. It forms an effective bridge between Government, industry and education.
The Chartered Institute of Arbitrators
The Chartered Institute of Arbitrators (CIArb) is a global centre of excellence for the practice and profession of ADR, championing all aspects of dispute resolution across arbitration, mediation, and adjudication. It is committed to promoting ADR and the benefits it brings to society and economies across the world.
CIArb has a growing membership of over 17,000 professionals and over 10,000 students based across 150 jurisdictions and is supported by an international network of 42 branches. It supports its members, from students to experienced Fellows, at every step of their ADR journey, offering:
- Opportunities to build skills and achieve career goals through learning, mentorship, and insightful publications.
- Global and local ways to connect through its branches, events, and networking opportunities.
- A voice for its members, representing the profession when it counts
- Guidance to help its members adapt as the world changes and ensure ADR practice reflects the society it represents.
Guest commentary by
Catherine Dixon
Director-General, The Chartered Institute of Arbitrators (CIArb)
This report demonstrates how ADR (alternative dispute resolution) can be used to effectively resolve disputes. Disputes are inevitable, particularly in the construction sector. Therefore, it is important that businesses have access to and can rely on ways of resolving disputes effectively. This ensures business certainty, maintains business relationships and results in economic prosperity.
CIArb is a global professional body and membership organisation for dispute resolvers. CIArb offers worldclass training and CIArb postnominals are recognised as the gold standard globally.
CIArb’s aims are to:
- Globally promote effective dispute resolution.
- Be a global thought leader.
- Create a global community of diverse dispute resolvers.
CIArb is proud to open a Branch in Pakistan, which is part of our global network of 42 Branches comprising members in over 150 jurisdictions.
As the Director General of CIArb, I’m delighted to welcome the Pakistan Branch to our global community and wish all CIArb members in Pakistan every success.
