21 ASIAN LEGAL BUSINESS – JUNE 2024 WWW.LEGALBUSINESSONLINE.COM ROUNDTABLE ing closely with project managers, we ensure the company is in compliance with environmental standards, mitigating potential environmental legal issues. We diligently track environmental regulation changes to update our policies for sustainable construction. Prioritising these considerations showcases our commitment to sustainable communities, managing environmental risks effectively, and positioning the company as a leader in environmentally responsible construction. ALB: The construction industry is notorious for its contractual complexities and potential disputes. How does your legal team approach contract negotiation, drafting, and enforcement to safeguard the interests of your company while fostering positive relationships with clients, subcontractors, and suppliers? SHASTRY: The construction industry is fraught with disputes. There are substantial amounts of money that are stuck in various arbitration and contractual disputes, which has led to cash flow issues in various construction majors, and this has been one of the fundamental reasons as to why many big giants have failed too. Therefore, the approach to potential conflict needs to be scientific and unambiguous. We handle this most important risk as under: The first and foremost is the contractual clauses. We have standardised templates, and we ensure we stuck to those templates. We generally don’t allow deviation from the standard clauses, however, in unlikely scenarios where we have to agree for deviation, we then scrutinise that contract well and keep a constant vigil on the progress under that contract. At times, the government clients will always have taken it or leave it attitude for the contracts. For that we need to ensure that our communication is spot on. The delays which are not due to our faults or any liability, whether in terms of cost or time, which is not owing our act or omission, has to be clearly communicated. Thus, a robust communication matrix is adhered to. The CCRM dept. is responsible for the same. We generally foster an amicable and collaborative relationship with all our stakeholders. The clients, contractors, sub-contractors, government clients, independent engineers etc., are communicated clearly about our plans and approach. We generally take their inputs and, as much as possible, either implement it or, by dialogues try to tell it very early as to why the said decision could not be implemented. This transparent system helps in fostering trust. That mostly nips in the bud any potential dispute. In an unlikely scenario where we have to end up landing at dispute, we try to solve it with mediation and dialogue as much as possible. At times, even if we have to take a little bit of financial hit, we go with that instead of pressing the trigger. Because, at the core, we are clear that trigger friendly approach won’t help in longer run. Nonetheless, if all talks and mediation fail despite our best efforts, then we will have to rely on our litigation strategy. Given our robust communication matrix, we generally have enough and ample documentations to prove our point. We also mostly use institutional arbitration, preferably SIAC, for our arbitration, and that helps us in streamlining strategies. BURY: Fostering positive relationships with our clients, subcontractors, and suppliers is of vital importance to Gammon’s continued success in the industry. However, there is a delicate balance between delivering what your clients want and ensuring that the company is protected from unnecessary risk. Where contracts are negotiated with subcontractors and suppliers, the legal team is always consulted and assists in the process. Before Gammon tenders for any new project with a new or existing client, the legal team reviews the tender documents, including the draft contract and makes recommendations for drafting. Where possible, we will assist with the negotiations as well. The commercial and finance teams will also review the tender documents to ensure that the interests of the company are safeguarded to the best of our ability. In this way, decisions are made after careful review and consideration and where risks are taken, they are taken in an informed environment. In terms of enforcement, Gammon will always look in the first instance at ways to resolve disputes amicably, and usually we find a way to do this. Where necessary, we have a good team of experienced litigators and dispute resolution professionals, as well as extensive relationships with law firms. Fortunately, we do not regularly have to resort to this, though. LOO: Our legal team adopts a meticulous and strategic approach in contract negotiation, drafting, and enforcement. This approach ensures that the interests of the company are safeguarded while fostering positive relationships with the stakeholders. Our negotiation strategy prioritises the company’s interests while maintaining openness and transparency with the counterparty. This approach facilitates effective negotiations, ensuring that all parties have a clear understanding of their obligations and expectations. By fostering an atmosphere of mutual respect and cooperation, we aim to build long-term, positive relationships with our partners. Understanding dispute resolution in the construction field is crucial due to the numerous practical considerations involved. These include managing risks related to land purchase, contractor performance, timelines, and delays. We take into consideration both the legal and commercial repercussions and strive for solutions that preserve our business relationships. Mediation and negotiation are preferred methods for dispute resolution, as they are less adversarial and more cost-effective. Initiating legal action is considered a last resort, used only when all other avenues have been exhausted. By adopting this comprehensive and balanced approach to contract negotiation, drafting, and enforcement, our legal team effectively safeguards the company’s interests while fostering a collaborative and positive working environment with our external stakeholders.
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