ROLES OF ARCHITECTS AS CONSTRUCTION MEDIATORS IN POST MCO RECOVERY IN MALAYSIA

Roles of Architects as Construction Mediators in Post MCO[1] Recovery in Malaysia

This paper attempt to answer why the Architect should be the best of position as the mediator? If so, what extend, the current Covid-19 pandemic situation, impacted the building industry and brought about the opportunity of mediation as a measure of recovery?  In what role, the Architect has to play? What has the Bill provided? How was it related to mediation? If so, what else is cover under this provision of s.9 of this Act? What can PAM, as an institution do to promote ‘construction mediation’? Why s.9 needs to ‘reinvent the wheel’ on mediation when there is already a Mediation Act 2012?

Why should the Architect be the best of position as the mediator? Foremost, he is the ‘man on the ground’, equipped with technical ‘know-how’ and constantly in the forefront of events happened on site. Second, in being a mediator, its role is significantly elevated in terms of his impartiality, of which he is already ‘statutory bound’ as certifier. [2] Thirdly, he is at the position to amass ‘technical advices’ from various affiliated consultants within the project team, fortifying him, an ‘expert mediator’ in the field of construction. [3] Fourthly, the Architect is a profession that is highly regulated and there is very little need to ‘reinvent the wheel’ to create additional law in governing such area. [4] 

On such account, what extend, Covid-19 pandemic, impacted the building industry and brought about the opportunity of mediation as a measure of recovery?  In what role, the Architect has to play? The pandemic has bought about a ‘massive kneejerk’ reactions to the industry at large, placing the economy on ‘standstill’. Contractors are morbidly ‘counting losses’ confronting uncertainties and future disputes.[5] Prolonged MCO leading to CMCO[6], witnessed the government put in place SOP[7] to ‘kick-start’ the construction industry. The industry succumbed to further fear of lockdowns and potential liabilities arising from delays in completion and handing over ‘vacant-possession’.[8] No one has ‘an answer’ to this unprecedented event.[9] Lawyers are suggesting repudiation under ‘frustration’ and remedies under force majeure. Virtually ‘no one’ would consider, putting aside one’s legal rights and negotiate a win-win solution, which is mediation. Came RMCO[10], although a little ‘delay’[11] compared to the Singapore’s Covid-19 Bill, the government of Malaysia has finally passed the Temporary Measures for Reducing the Impact of Covid-19 Bill 2020[12] TMRIC.

What has the Bill provided? How was it related to mediation? In a nutshell, as its name suggests, it is a ‘temporary measure’ to protect party that is unable to perform its contractual obligation during the MCO and refraining the other party to exercise its right under the terms of the contract, during the relief period[13] against the defaulting party.[14] The Bill impacted the construction industry on a wide array of matters, among them relevant point, is mediation[15], covering contracts for construction and consultancy contract; supply of materials, plants and manpower in the construction industry; and professional services, whereupon, “any dispute[…]specified in the Schedule[…]may be settled by way of mediation”.[16]

If so, what else is cover under this provision of s.9? Foremost, mediation as prescribed is a ‘voluntary’ act in the operative word, ‘may’ instead of ‘shall’, so much so, the Bill does not provide sufficient ‘statutory bite’.[17] Only upon settlement, the parties ought to agree via a ‘settlement agreement’ that is binding although not without its risk of being breached.[18] Thirdly, the mediator is ‘somebody’ to be appointed by the Minister, thus who is this ‘appointing body’? Since the matter of construction is best dealt with by the construction professionals, institution like PAM[19] and having the PAM Form[20] as the most widely employed in Malaysia, in collaboration with CIArb(Malaysia)[21] shall ‘naturally’ be granted the privilege as the appointing party. Moreover, PAM has been, a stakeholders of the construction industry.

What can PAM do to promote ‘construction mediation’? Foremost, PAM has been running its ‘panel of arbitrators’ since 1969 and the service of ADR[22] has since grew.[23] PAM is capable in providing ‘state of the art’ facilities for ADR proceedings at reasonable costs. PAM has a comprehensive Rules and Professional Ethics governing ADR. PAM has constantly, in collaboration with CIArb(Malaysia) to organize courses in area of ADR for its members and allied professions, and last but not least, PAM has its publication, media appearances and network to promote ADR in a seamless platform for growths.

One may again ask, why s.9 TMRIC needs to ‘reinvent the wheel’ on mediation when there is already a Mediation Act 2012?[24] Party autonomy has always been the core value prescribed in the 2012Act[25], but in view of the specific nature of expertise centralize on the ‘construction industry’, no appointing body provided in the 2012Act by default in such area of emphasis.  2012Act suggests technique employed to be the ‘facilitative mediation’ approach centralize more on the participants’[26] discoveries of ‘win-win solutions’ to move ahead without any ‘suggestions’ provided by the mediator, it is of paramount important for an ‘expert mediator’ to ‘prompt’ and probe participants on feasible choices that goes beyond just ‘costs and time’[27] and its ‘reality testing’ within the sphere of multiple contracting parties and collateral interests.[28] Someone from ‘ground-zero’ of the construction industry is required to ‘feel’ such pulses, and is none other than the ‘expert mediator’, himself. Thus, an evaluative meditation may just fit the mold. 
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Concluding, there is already professional on ground such as the Architect to take up the challenge as the ‘expert mediator’ to mediate construction dispute beyond just to achieve a resolution, but an avoidance to costly legal battles, besides juggling its role as an impartial certifier. In this given ‘ecosystem’ of the pandemic resilient measures and the existing facilities and network so provided by PAM, the Architect is the better choice, as a mediator for construction disputes.

 
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[1] The Movement Control Order MCO, is a ‘cordon sanitaire’ implemented as a measure by the Malaysian government in response to the COVID-19 pandemic on 18 March 2020, known commonly as a lockdown or partial lockdown.
[2] Perform ‘dual functions’ as agent to the employer and impartial certifier to the contractor.
[3] Acting as superintendence on site i.e. Superintendent Officer SO, mainly for ordering variation and issuing certificates, instructions and drawings.
[4] The first line of dispute avoidance is and has always been vested upon the shoulder of the ‘contract administrator’, by default such as so provided in the PAM form of building contract, the architect, http://www.davidyek.com/adr/dispute-avoidance-during-mco-what-architect-can-or-cannot-do, accessed 5 October 2020.
[5] […] eventually bring about the repercussion of ‘loss and expenses’ claim by the contractor. <http://www.davidyek.com/adr/dispute-avoidance-during-mco-what-architect-can-or-cannot-do>, accessed 5 October 2020.
[6] Conditional Movement Control Order.
[7] Standard Operating Procedure: put together by the Ministry of Health MOH and the Ministry of International Trade and Industry MITI, requiring the contractor who wish to restart work to put in place additional preventive measures and protocols, possible without reimbursement from the employer arising from the ‘neutral event’.
[8]  It is important for architects to understand the liabilities annexed to these undertakings while keeping ‘your finger crossed that nothing bad actually happened while in operation’. <http://www.davidyek.com/adr/mco-03-go-to-work-mr-arcitect>, accessed 5 October 2020.
[9] Having gone through the 3 phases (of MCO) everybody in the construction industries are looking at the ‘crystal ball’ to see ‘when it is going to end’, what is the ‘exit plan’ and more importantly, how to face the ‘new normal’. <http://www.davidyek.com/adr/mco-04-new-normality-bites>, accessed 5 October 2020.
[10] Recovery Movement Control Order.
[11] <https://www.freemalaysiatoday.com/category/nation/2020/08/25/govt-explains-delay-in-tabling-covid-19-bill/>, accessed 3 October 2020.
[12] The Bill has not been gazetted in the time of writing this paper.
[13] 18 March 2020 – 31 December 2020
[14] S.7 TMRIC
[15] Protection from inability to perform contractual obligation; Mediation; Extension of Limiting Period; and Impact on Housing Developer’s Act HDA.
[16] S.9 TMRIC
[17] The stronger party or party which has more resources will still resort to the normal dispute resolution process, such as going to the courts even after this Bill becomes law. <https://www.thestar.com.my/opinion/columnists/with-all-due-respect/2020/08/16/is-our-covid-19-bill-the-panacea>, accessed 3 October 2020.
[18] If mediation is chosen, then what happens if parties fail or refuse to reach a settlement or perform the settlement agreement? <https://www.thestar.com.my/opinion/columnists/with-all-due-respect/2020/08/16/is-our-covid-19-bill-the-panacea>, accessed 3 October 2020
[19] Malaysian Institute of Architects PAM
[20] Pertubuhan Arkitek Malaysia PAM Standard Form of Building Contract
[21] PAM has entered into a Memorandum of Understanding MOU with Chartered Institute of Arbitrators CIArb Malaysia Branch, to collaborate in the area of ADR.
[22] Alternative Dispute Resolution.
[23] To include expert determination, adjudication and mediation, coincides with its amendment to the PAM2018.
[24] […] parties can always opt for mediation and follow the provisions of the Mediation Act, 2012 (Act 749), <https://www.thestar.com.my/opinion/columnists/with-all-due-respect/2020/08/16/is-our-covid-19-bill-the-panacea>, accessed 3 October 2020
[25] https://www.mylawyer.com.my/mediation-act-2012/
[26] Participant is the term referred to, in lieu of, party in a dispute that has a slightly negative connotation for collaboration.
[27] The sole subject of dispute, generally applied to most construction related dispute.
[28] S.2(1)(b)Act2012 excluded any mediation conducted by a judge, magistrate or officer of the court pursuant to any civil action that has been filed in court.