Claims & Dispute Resolution

Pan-Pac Pulp and Paper

Napier, New Zealand
Pan-Pac Pulp and Paper

Pan-Pac Pulp and Paper

Napier, New Zealand

The EPC Contractor was awarded a FIDIC design-built contract to upgrade the existing wastewater treatment plant to accommodate the two plant operation modes (BCTMP and TMP) and comply with the new environmental regulations. The scope included design, civil, mechanical, electrical works, and all process equipment, testing and commissioning. The biological treatment system mainly consists of a primary dissolved air floatation (DAF) unit, two moving bed bioreactor (MBBR) basins, two activated sludge (AS) plug-flow aeration basins followed by a secondary clarifier.

Challenge

FIDIC EPC contract at fixed price and duration. Project was delivered and commissioned in accordance with the contract. The dispute occurred in the performance stage, during the defect liability period. The parties had exhausted all possibilities for an amicable settlement and had begun to exchange legal correspondence, were considering arbitration. The key issue was the inability to obtain a "meeting of the minds" regarding the key terms of the contractual performance.

Claims & Dispute Resolution

Urgently stop the legal escalation process.

  • Identify the other party’s stakeholders, decision maker and their motivations.

  • Offer a genuine last chance to an amicable resolution, to resolve the remaining issues on a shared risk basis.

  • Agree on a “in person” settlement process with mediation workshops.

  • Review the chronology of events since the pre-contractual negotiations to date, assemble, organize, and review the facts.

  • Prepare for mediation with the project team and internal stakeholders and identify the possible concessions: best scenario, probable scenario of the other party, leave the table scenario (our limits).

  • Hold mediation sessions focusing on facts, contractual base, good faith, and flexibility. Failure to reach settlement will mean legal proceedings (time consuming, costly).

  • Promptly confirm the agreements reached during the session and sign.

  • Settlement was reached within 3 months.