1.  The characteristics of dispute resolution in public sector IT projects are markedly different from those concerning IT projects in the private sector:

• in Asia particularly, Government contracts are very onerous, often presented with very little opportunity for vendor negotiation; and accepted by vendors who may have built their business plans around winning such contracts
• adherence to timescales markedly less important to public sector procurers compared to the private section equivalents
• pragmatic approach to achievable scope issues less likely to be taken by a public sector procurer
• once dispute situation arises, public sector management may feel unable to compromise to achieve a commercial solution, preferring a Court or tribunal's decision.

2. Techniques for avoiding disputes derailing the Project

A. If the dispute relates to the cost of delivery, usually through scope items although perhaps through hardware sizing, the impetus of the Project will be lost if the work is suspended whilst an arbitration takes place. In practice, it would be unlikely to resume.

Case study: describing a situation where the Government and supplier agreed a large packet of work which was not accepted as being in scope, and which the vendor agreed to deliver only on the basis that it preserved its right to arbitrate the liability for payment at a later date.

B. If the parties need to dispose of the dispute before carrying on with delivery, mediation should be considered.

Case study

C. A project may be constrained by the resources and skill sets which one part of the vendor community can deploy. In those circumstances, one way through the resulting disputes is for one or more vendor(s) to dispose its interest in the Project to another.

Case study

3. Arbitration or litigation

National courts in Asian jurisdictions are not usually well placed to adjudicate technical disputes arising from technology projects. As more and more contracts include arbitration clauses, the gene pool of suitably skilled judges becomes virtually non-existent.

Disputants may try to push claims into Court for tactical reasons:

See Secretary for Justice v. HP Enterprise Services (Hong Kong) Limited (formerly EDS) HCA 667/2011.

4. Dealing with the political element

Disputants and their advisors need to be attuned to the political landscape surrounding the distressed Project.

Discussion surrounding defusing or co-opting support in the event of involvement from different stakeholders.

Peter Bullock
Pinsent Masons

13.09.2013