Litigation Asia Summit 2012

MTR Corporation Limited - Approach to Effective Dispute

Management

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21st May, 2012

Presented by :

Gill Meller, Legal Director & Secretary

Martin Dunn, General Manager – Procurement & Contracts

MTR Corporation Ltd.

Management

MTR SYSTEM MAPMTR SYSTEM MAPMTR SYSTEM MAPMTR SYSTEM MAP

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MTR MTR MTR MTR –––– FACTS AND FIGURESFACTS AND FIGURESFACTS AND FIGURESFACTS AND FIGURES

• ~ 220~ 220~ 220~ 220km of trackkm of trackkm of trackkm of track

• 84848484 stations and 68 light rail stopsstations and 68 light rail stopsstations and 68 light rail stopsstations and 68 light rail stops

• 4 million+ passengers per day4 million+ passengers per day4 million+ passengers per day4 million+ passengers per day

• 2222ndndndnd biggest landowner in Hong Kongbiggest landowner in Hong Kongbiggest landowner in Hong Kongbiggest landowner in Hong Kong

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• 2222ndndndnd biggest landowner in Hong Kongbiggest landowner in Hong Kongbiggest landowner in Hong Kongbiggest landowner in Hong Kong

• ~ 740,000~ 740,000~ 740,000~ 740,000 sq m office and retail property under management in HKsq m office and retail property under management in HKsq m office and retail property under management in HKsq m office and retail property under management in HK

• 5 new railway lines (56km) under construction5 new railway lines (56km) under construction5 new railway lines (56km) under construction5 new railway lines (56km) under construction

• Operations in the Mainland of China, UK, Sweden and AustraliaOperations in the Mainland of China, UK, Sweden and AustraliaOperations in the Mainland of China, UK, Sweden and AustraliaOperations in the Mainland of China, UK, Sweden and Australia

COMPLETE COMMERCIAL CONTRACTINGCOMPLETE COMMERCIAL CONTRACTINGCOMPLETE COMMERCIAL CONTRACTINGCOMPLETE COMMERCIAL CONTRACTING

• PrePrePrePre----contract:contract:contract:contract:

– Identification of key areas of riskIdentification of key areas of riskIdentification of key areas of riskIdentification of key areas of risk

– Incorporation of escalation and dispute resolution procedures into Incorporation of escalation and dispute resolution procedures into Incorporation of escalation and dispute resolution procedures into Incorporation of escalation and dispute resolution procedures into contractscontractscontractscontracts

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• During contract:During contract:During contract:During contract:

– Recognition of the counterparty’s concerns and entitlementsRecognition of the counterparty’s concerns and entitlementsRecognition of the counterparty’s concerns and entitlementsRecognition of the counterparty’s concerns and entitlements

– Assessment of the behavioural aspects of dispute managementAssessment of the behavioural aspects of dispute managementAssessment of the behavioural aspects of dispute managementAssessment of the behavioural aspects of dispute management

– Effective management of external counsel involvementEffective management of external counsel involvementEffective management of external counsel involvementEffective management of external counsel involvement

THE BASICSTHE BASICSTHE BASICSTHE BASICS

• Why do disputes arise?Why do disputes arise?Why do disputes arise?Why do disputes arise?

- unclear termsunclear termsunclear termsunclear terms- failure to performfailure to performfailure to performfailure to perform

• How should disputes be dealt with?How should disputes be dealt with?How should disputes be dealt with?How should disputes be dealt with?

• What are the consequences? legal; financial; reputationalWhat are the consequences? legal; financial; reputationalWhat are the consequences? legal; financial; reputationalWhat are the consequences? legal; financial; reputational

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• What are the consequences? legal; financial; reputationalWhat are the consequences? legal; financial; reputationalWhat are the consequences? legal; financial; reputationalWhat are the consequences? legal; financial; reputational

• What are the costs of litigation?What are the costs of litigation?What are the costs of litigation?What are the costs of litigation?

- legallegallegallegal- financialfinancialfinancialfinancial- impact on relationshipsimpact on relationshipsimpact on relationshipsimpact on relationships

PREVENTION IS BETTER THAN CURE (1)PREVENTION IS BETTER THAN CURE (1)PREVENTION IS BETTER THAN CURE (1)PREVENTION IS BETTER THAN CURE (1)

• Identify the major (and minor) risks and “minefields” at the start of the Identify the major (and minor) risks and “minefields” at the start of the Identify the major (and minor) risks and “minefields” at the start of the Identify the major (and minor) risks and “minefields” at the start of the

project and carry out a thorough risk analysis and allocation processproject and carry out a thorough risk analysis and allocation processproject and carry out a thorough risk analysis and allocation processproject and carry out a thorough risk analysis and allocation process

• Use clear and unambiguous drafting Use clear and unambiguous drafting Use clear and unambiguous drafting Use clear and unambiguous drafting

• Incorporate clear contractual mechanisms to deal with the risks should they Incorporate clear contractual mechanisms to deal with the risks should they Incorporate clear contractual mechanisms to deal with the risks should they Incorporate clear contractual mechanisms to deal with the risks should they

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• Incorporate clear contractual mechanisms to deal with the risks should they Incorporate clear contractual mechanisms to deal with the risks should they Incorporate clear contractual mechanisms to deal with the risks should they Incorporate clear contractual mechanisms to deal with the risks should they

eventuateeventuateeventuateeventuate

PREVENTION IS BETTER THAN CURE (2)PREVENTION IS BETTER THAN CURE (2)PREVENTION IS BETTER THAN CURE (2)PREVENTION IS BETTER THAN CURE (2)

• Implement a clear and practical claim assessment process based on factual Implement a clear and practical claim assessment process based on factual Implement a clear and practical claim assessment process based on factual Implement a clear and practical claim assessment process based on factual

meritsmeritsmeritsmerits

• Don’t be afraid to allow or consider a claim if, on the factsDon’t be afraid to allow or consider a claim if, on the factsDon’t be afraid to allow or consider a claim if, on the factsDon’t be afraid to allow or consider a claim if, on the facts

and on the contract, there is a basis for the claim; don’t refuse a claim and on the contract, there is a basis for the claim; don’t refuse a claim and on the contract, there is a basis for the claim; don’t refuse a claim and on the contract, there is a basis for the claim; don’t refuse a claim

for the sake of refusingfor the sake of refusingfor the sake of refusingfor the sake of refusing

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for the sake of refusingfor the sake of refusingfor the sake of refusingfor the sake of refusing

• Select appropriate dispute resolution proceduresSelect appropriate dispute resolution proceduresSelect appropriate dispute resolution proceduresSelect appropriate dispute resolution procedures

• Client Brief signed off at Executive levelClient Brief signed off at Executive levelClient Brief signed off at Executive levelClient Brief signed off at Executive level

• Functional Requirements DocumentsFunctional Requirements DocumentsFunctional Requirements DocumentsFunctional Requirements Documents

• Design StandardsDesign StandardsDesign StandardsDesign Standards

• Particular SpecificationParticular SpecificationParticular SpecificationParticular Specification

PROCESSPROCESSPROCESSPROCESS

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• Particular SpecificationParticular SpecificationParticular SpecificationParticular Specification

• Maintenance RequirementsMaintenance RequirementsMaintenance RequirementsMaintenance Requirements

• Tender Readiness PresentationsTender Readiness PresentationsTender Readiness PresentationsTender Readiness Presentations

• Control ChangeControl ChangeControl ChangeControl Change

SPECIFICATIONSSPECIFICATIONSSPECIFICATIONSSPECIFICATIONS

• Specifications reviewed by peer GroupSpecifications reviewed by peer GroupSpecifications reviewed by peer GroupSpecifications reviewed by peer Group

• Specifications reviewed for contractual loop holes Specifications reviewed for contractual loop holes Specifications reviewed for contractual loop holes Specifications reviewed for contractual loop holes ---- ambiguitiesambiguitiesambiguitiesambiguities

• Industry Review of SpecificationsIndustry Review of SpecificationsIndustry Review of SpecificationsIndustry Review of Specifications

• Interface Specifications must be signed off byInterface Specifications must be signed off byInterface Specifications must be signed off byInterface Specifications must be signed off by

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• Interface Specifications must be signed off byInterface Specifications must be signed off byInterface Specifications must be signed off byInterface Specifications must be signed off byEngineering GroupsEngineering GroupsEngineering GroupsEngineering Groups(i.e. Rolling Stock / signalling Traction / Power /(i.e. Rolling Stock / signalling Traction / Power /(i.e. Rolling Stock / signalling Traction / Power /(i.e. Rolling Stock / signalling Traction / Power /Trackwork / Controls)Trackwork / Controls)Trackwork / Controls)Trackwork / Controls)

TENDER READINESSTENDER READINESSTENDER READINESSTENDER READINESS

• Document preparation team present package to Senior Managers (Directors / General Document preparation team present package to Senior Managers (Directors / General Document preparation team present package to Senior Managers (Directors / General Document preparation team present package to Senior Managers (Directors / General

Managers / Executive Managers, etc)Managers / Executive Managers, etc)Managers / Executive Managers, etc)Managers / Executive Managers, etc)

• Review Covers: Review Covers: Review Covers: Review Covers: ���� Scope / SpecificationScope / SpecificationScope / SpecificationScope / Specification

���� Lessons LearntLessons LearntLessons LearntLessons Learnt

���� ProgrammeProgrammeProgrammeProgramme

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���� ProgrammeProgrammeProgrammeProgramme

���� RisksRisksRisksRisks

���� InterfacesInterfacesInterfacesInterfaces

���� ConstructionConstructionConstructionConstruction

���� EstimateEstimateEstimateEstimate

���� OptionsOptionsOptionsOptions

• Look at appropriate Contract approaches (e.g. Target Cost)Look at appropriate Contract approaches (e.g. Target Cost)Look at appropriate Contract approaches (e.g. Target Cost)Look at appropriate Contract approaches (e.g. Target Cost)

• Bids Secured on WorldBids Secured on WorldBids Secured on WorldBids Secured on World----wide Basiswide Basiswide Basiswide Basis

• Alternative Bids Considered Alternative Bids Considered Alternative Bids Considered Alternative Bids Considered –––– Currency / TechnicalCurrency / TechnicalCurrency / TechnicalCurrency / Technical

• CAR and Third Party Insurance procured by MTRCAR and Third Party Insurance procured by MTRCAR and Third Party Insurance procured by MTRCAR and Third Party Insurance procured by MTR

CONTRACT STRATEGY (1)CONTRACT STRATEGY (1)CONTRACT STRATEGY (1)CONTRACT STRATEGY (1)

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• Liquidated & General Damages for Delay cappedLiquidated & General Damages for Delay cappedLiquidated & General Damages for Delay cappedLiquidated & General Damages for Delay capped

• Performance Bonds, Joint & Several or Parent Company GuaranteesPerformance Bonds, Joint & Several or Parent Company GuaranteesPerformance Bonds, Joint & Several or Parent Company GuaranteesPerformance Bonds, Joint & Several or Parent Company Guarantees

• Identify Risk place with party best able to manageIdentify Risk place with party best able to manageIdentify Risk place with party best able to manageIdentify Risk place with party best able to manage

• Terms and Conditions Terms and Conditions Terms and Conditions Terms and Conditions –––– FIDIC basedFIDIC basedFIDIC basedFIDIC based

• Key is how you apply the terms of the ContractKey is how you apply the terms of the ContractKey is how you apply the terms of the ContractKey is how you apply the terms of the Contract

• MTR Approach is about working togetherMTR Approach is about working togetherMTR Approach is about working togetherMTR Approach is about working together

• Contractors our best resourceContractors our best resourceContractors our best resourceContractors our best resource

CONTRACT STRATEGY (2)CONTRACT STRATEGY (2)CONTRACT STRATEGY (2)CONTRACT STRATEGY (2)

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• Contractors our best resourceContractors our best resourceContractors our best resourceContractors our best resource

• MTR pioneered Target Cost in Hong Kong in 2002MTR pioneered Target Cost in Hong Kong in 2002MTR pioneered Target Cost in Hong Kong in 2002MTR pioneered Target Cost in Hong Kong in 2002

• Developed through Developed through Developed through Developed through Cable Car ProjectCable Car ProjectCable Car ProjectCable Car Project

West Island LineWest Island LineWest Island LineWest Island Line

South Island LineSouth Island LineSouth Island LineSouth Island Line

TARGET COST CONTRACTS (1)TARGET COST CONTRACTS (1)TARGET COST CONTRACTS (1)TARGET COST CONTRACTS (1)

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South Island LineSouth Island LineSouth Island LineSouth Island Line

Shatin Central Line (next)Shatin Central Line (next)Shatin Central Line (next)Shatin Central Line (next)

• Only used where it is more essential for MTR and Contractor to manage Only used where it is more essential for MTR and Contractor to manage Only used where it is more essential for MTR and Contractor to manage Only used where it is more essential for MTR and Contractor to manage

Stakeholder risksStakeholder risksStakeholder risksStakeholder risks

• 2 Stage Process with 2 Tenderers 2 Stage Process with 2 Tenderers 2 Stage Process with 2 Tenderers 2 Stage Process with 2 Tenderers –––– competitioncompetitioncompetitioncompetition

• InInInIn----depth Technical / Commercial Workshopsdepth Technical / Commercial Workshopsdepth Technical / Commercial Workshopsdepth Technical / Commercial Workshops

• Focused Technical SubmissionsFocused Technical SubmissionsFocused Technical SubmissionsFocused Technical Submissions

TARGET COST CONTRACTS (2)TARGET COST CONTRACTS (2)TARGET COST CONTRACTS (2)TARGET COST CONTRACTS (2)

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• Pain Share / Gain Share Pain Share / Gain Share Pain Share / Gain Share Pain Share / Gain Share

• Dashboard + “AtDashboard + “AtDashboard + “AtDashboard + “At----Risk” Modelling of OutturnRisk” Modelling of OutturnRisk” Modelling of OutturnRisk” Modelling of Outturn

• Payment to losing TendererPayment to losing TendererPayment to losing TendererPayment to losing Tenderer

• ResponsibilitiesResponsibilitiesResponsibilitiesResponsibilities

• Cost and Accounting PracticesCost and Accounting PracticesCost and Accounting PracticesCost and Accounting Practices

• Payment and Cash FlowPayment and Cash FlowPayment and Cash FlowPayment and Cash Flow

• Financial Control and Outturn MonitoringFinancial Control and Outturn MonitoringFinancial Control and Outturn MonitoringFinancial Control and Outturn Monitoring

JOINT COMMERCIAL MANAGEMENT PROCEDURESJOINT COMMERCIAL MANAGEMENT PROCEDURESJOINT COMMERCIAL MANAGEMENT PROCEDURESJOINT COMMERCIAL MANAGEMENT PROCEDURES

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• Procurement Procurement Procurement Procurement –––– MTR InvolvementMTR InvolvementMTR InvolvementMTR Involvement

• Works Proposal Group Works Proposal Group Works Proposal Group Works Proposal Group –––– Resolution of IssuesResolution of IssuesResolution of IssuesResolution of Issues

• Detailed presentations by Contractors of 10(Ten) major safety risks, construction Detailed presentations by Contractors of 10(Ten) major safety risks, construction Detailed presentations by Contractors of 10(Ten) major safety risks, construction Detailed presentations by Contractors of 10(Ten) major safety risks, construction

risks and cost bustersrisks and cost bustersrisks and cost bustersrisks and cost busters

• Greater awareness of Contractors methods, resources, programmeGreater awareness of Contractors methods, resources, programmeGreater awareness of Contractors methods, resources, programmeGreater awareness of Contractors methods, resources, programme

• Value Engineering encouragedValue Engineering encouragedValue Engineering encouragedValue Engineering encouraged

TENDERINGTENDERINGTENDERINGTENDERING

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• Lowest cost in NPV termsLowest cost in NPV termsLowest cost in NPV termsLowest cost in NPV terms

• We do not always award to lowest ContractorWe do not always award to lowest ContractorWe do not always award to lowest ContractorWe do not always award to lowest Contractor

CONTRACT MANAGEMENT (1)CONTRACT MANAGEMENT (1)CONTRACT MANAGEMENT (1)CONTRACT MANAGEMENT (1)

• Work with the Contractor to achieve a win/win solutionWork with the Contractor to achieve a win/win solutionWork with the Contractor to achieve a win/win solutionWork with the Contractor to achieve a win/win solutionon all issueson all issueson all issueson all issues

• Accept Contractors valid entitlements to Variations / ClaimsAccept Contractors valid entitlements to Variations / ClaimsAccept Contractors valid entitlements to Variations / ClaimsAccept Contractors valid entitlements to Variations / Claims

• Negotiate and agree Variations as they ariseNegotiate and agree Variations as they ariseNegotiate and agree Variations as they ariseNegotiate and agree Variations as they arise

• Address Contractual Claims early Address Contractual Claims early Address Contractual Claims early Address Contractual Claims early –––– pay Contractors entitlement and grant time as pay Contractors entitlement and grant time as pay Contractors entitlement and grant time as pay Contractors entitlement and grant time as

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• Address Contractual Claims early Address Contractual Claims early Address Contractual Claims early Address Contractual Claims early –––– pay Contractors entitlement and grant time as pay Contractors entitlement and grant time as pay Contractors entitlement and grant time as pay Contractors entitlement and grant time as appropriateappropriateappropriateappropriate

• Target final account agreement by works completion dateTarget final account agreement by works completion dateTarget final account agreement by works completion dateTarget final account agreement by works completion date

CONTRACT MANAGEMENT (2)CONTRACT MANAGEMENT (2)CONTRACT MANAGEMENT (2)CONTRACT MANAGEMENT (2)

• Contract to include clear Completion ObligationsContract to include clear Completion ObligationsContract to include clear Completion ObligationsContract to include clear Completion Obligations

• Damages (Liquidated / General) apply to Completion ObligationsDamages (Liquidated / General) apply to Completion ObligationsDamages (Liquidated / General) apply to Completion ObligationsDamages (Liquidated / General) apply to Completion Obligations

• IPS to be used as basis for PaymentsIPS to be used as basis for PaymentsIPS to be used as basis for PaymentsIPS to be used as basis for Payments

• Payment only certifiable if Milestones achievedPayment only certifiable if Milestones achievedPayment only certifiable if Milestones achievedPayment only certifiable if Milestones achieved

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• Starts at Feasibility StageStarts at Feasibility StageStarts at Feasibility StageStarts at Feasibility Stage

• Takes cognisance of risks to existing RailwayTakes cognisance of risks to existing RailwayTakes cognisance of risks to existing RailwayTakes cognisance of risks to existing Railway

• Risk registers developed through design phaseRisk registers developed through design phaseRisk registers developed through design phaseRisk registers developed through design phase

RISK IDENTIFICATIONRISK IDENTIFICATIONRISK IDENTIFICATIONRISK IDENTIFICATION

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• Risk registers developed through design phaseRisk registers developed through design phaseRisk registers developed through design phaseRisk registers developed through design phase

• Risk allocated to individuals to manageRisk allocated to individuals to manageRisk allocated to individuals to manageRisk allocated to individuals to manage

• Risk register included in all Tenders/ContractsRisk register included in all Tenders/ContractsRisk register included in all Tenders/ContractsRisk register included in all Tenders/Contracts

• Contractor to develop risk mitigation and manageContractor to develop risk mitigation and manageContractor to develop risk mitigation and manageContractor to develop risk mitigation and manage

EMPLOYER’S RESIDUAL RISKEMPLOYER’S RESIDUAL RISKEMPLOYER’S RESIDUAL RISKEMPLOYER’S RESIDUAL RISK

• Risk Register Risk Register Risk Register Risk Register –––– Employer’s RiskEmployer’s RiskEmployer’s RiskEmployer’s Risk

• “At“At“At“At----Risk” softwareRisk” softwareRisk” softwareRisk” software

• Reviewed Monthly [ Construction / P&CD ]Reviewed Monthly [ Construction / P&CD ]Reviewed Monthly [ Construction / P&CD ]Reviewed Monthly [ Construction / P&CD ]

• Trend Forecast of ContingencyTrend Forecast of ContingencyTrend Forecast of ContingencyTrend Forecast of Contingency

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NOTICENOTICENOTICENOTICE

• Contractor contractually obliged to give MTR ‘Notice’Contractor contractually obliged to give MTR ‘Notice’Contractor contractually obliged to give MTR ‘Notice’Contractor contractually obliged to give MTR ‘Notice’

• Claims can be called a failure on our partClaims can be called a failure on our partClaims can be called a failure on our partClaims can be called a failure on our part

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MTR MTR MTR MTR OBLIGATIONSOBLIGATIONSOBLIGATIONSOBLIGATIONS

• Make available the SiteMake available the SiteMake available the SiteMake available the Site

• Provide Drawings and Specifications and issue Instructions in a timely Provide Drawings and Specifications and issue Instructions in a timely Provide Drawings and Specifications and issue Instructions in a timely Provide Drawings and Specifications and issue Instructions in a timely

mannermannermannermanner

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• Approve Design DataApprove Design DataApprove Design DataApprove Design Data

• Certify payment to the ContractorCertify payment to the ContractorCertify payment to the ContractorCertify payment to the Contractor

• Inspect and certify the WorksInspect and certify the WorksInspect and certify the WorksInspect and certify the Works

CLAIMSCLAIMSCLAIMSCLAIMS

• Responsibility to resolve lies with Engineer’s DelegateResponsibility to resolve lies with Engineer’s DelegateResponsibility to resolve lies with Engineer’s DelegateResponsibility to resolve lies with Engineer’s Delegate

• All claims are reported monthly (Cost Report)All claims are reported monthly (Cost Report)All claims are reported monthly (Cost Report)All claims are reported monthly (Cost Report)

• Factual records should be agreed “for records purposes only”Factual records should be agreed “for records purposes only”Factual records should be agreed “for records purposes only”Factual records should be agreed “for records purposes only”

• Contracts Managers are responsible for preparation of complete claims analysisContracts Managers are responsible for preparation of complete claims analysisContracts Managers are responsible for preparation of complete claims analysisContracts Managers are responsible for preparation of complete claims analysis

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TIMINGTIMINGTIMINGTIMING

• Acknowledge notification as soon as possibleAcknowledge notification as soon as possibleAcknowledge notification as soon as possibleAcknowledge notification as soon as possible

• You do not have to wait for the Contractors’ submissionYou do not have to wait for the Contractors’ submissionYou do not have to wait for the Contractors’ submissionYou do not have to wait for the Contractors’ submission

• If the claim is valid If the claim is valid If the claim is valid If the claim is valid –––– do an Engineer’s assessment do an Engineer’s assessment do an Engineer’s assessment do an Engineer’s assessment ––––

we need visibility of time/cost as soon as possiblewe need visibility of time/cost as soon as possiblewe need visibility of time/cost as soon as possiblewe need visibility of time/cost as soon as possible

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• Early discussion / settlement will generally reduce cost to EmployerEarly discussion / settlement will generally reduce cost to EmployerEarly discussion / settlement will generally reduce cost to EmployerEarly discussion / settlement will generally reduce cost to Employer

CLAIMS ASSESSMENTSCLAIMS ASSESSMENTSCLAIMS ASSESSMENTSCLAIMS ASSESSMENTS

• It is not personal It is not personal It is not personal It is not personal –––– don’t let emotion influence assessmentdon’t let emotion influence assessmentdon’t let emotion influence assessmentdon’t let emotion influence assessment

• Base assessment on fact and contract provisionsBase assessment on fact and contract provisionsBase assessment on fact and contract provisionsBase assessment on fact and contract provisions

• Ensure very good plant / labour records are keptEnsure very good plant / labour records are keptEnsure very good plant / labour records are keptEnsure very good plant / labour records are kept

• Lower expectation Lower expectation Lower expectation Lower expectation ---- demonstrate errors in Contractor’s submission, i.e. demonstrate errors in Contractor’s submission, i.e. demonstrate errors in Contractor’s submission, i.e. demonstrate errors in Contractor’s submission, i.e.

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• Lower expectation Lower expectation Lower expectation Lower expectation ---- demonstrate errors in Contractor’s submission, i.e. demonstrate errors in Contractor’s submission, i.e. demonstrate errors in Contractor’s submission, i.e. demonstrate errors in Contractor’s submission, i.e.

duplication, no entitlement, incorrect factsduplication, no entitlement, incorrect factsduplication, no entitlement, incorrect factsduplication, no entitlement, incorrect facts

• Avoid globalising ClaimsAvoid globalising ClaimsAvoid globalising ClaimsAvoid globalising Claims

MTR CONDITIONS OF CONTRACTMTR CONDITIONS OF CONTRACTMTR CONDITIONS OF CONTRACTMTR CONDITIONS OF CONTRACT

• Practical, commercial and pragmatic mindsetPractical, commercial and pragmatic mindsetPractical, commercial and pragmatic mindsetPractical, commercial and pragmatic mindset

• Standard dispute resolution clauseStandard dispute resolution clauseStandard dispute resolution clauseStandard dispute resolution clause

• Two step process Two step process Two step process Two step process –––– Mediation followed by ArbitrationMediation followed by ArbitrationMediation followed by ArbitrationMediation followed by Arbitration

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• Interlocutory reliefInterlocutory reliefInterlocutory reliefInterlocutory relief

• Own Mediation Rules Own Mediation Rules Own Mediation Rules Own Mediation Rules

• HK Arbitration Ordinance for the conduct of any arbitral hearingHK Arbitration Ordinance for the conduct of any arbitral hearingHK Arbitration Ordinance for the conduct of any arbitral hearingHK Arbitration Ordinance for the conduct of any arbitral hearing

THE MTR APPROACHTHE MTR APPROACHTHE MTR APPROACHTHE MTR APPROACH

• Early case assessmentEarly case assessmentEarly case assessmentEarly case assessment

• Early involvement of inEarly involvement of inEarly involvement of inEarly involvement of in----house legal teamhouse legal teamhouse legal teamhouse legal team

• Early involvement of external lawyersEarly involvement of external lawyersEarly involvement of external lawyersEarly involvement of external lawyers

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EXTERNAL LEGAL SUPPORTEXTERNAL LEGAL SUPPORTEXTERNAL LEGAL SUPPORTEXTERNAL LEGAL SUPPORT

• It is often the case that things are said or written in the early phase of a It is often the case that things are said or written in the early phase of a It is often the case that things are said or written in the early phase of a It is often the case that things are said or written in the early phase of a

dispute which come back to haunt the company when the matter turns dispute which come back to haunt the company when the matter turns dispute which come back to haunt the company when the matter turns dispute which come back to haunt the company when the matter turns

litigiouslitigiouslitigiouslitigious

• Ensure the team explains the complete background and provides all Ensure the team explains the complete background and provides all Ensure the team explains the complete background and provides all Ensure the team explains the complete background and provides all

necessary evidentiary documentation necessary evidentiary documentation necessary evidentiary documentation necessary evidentiary documentation –––– do not hold back; take advantage of do not hold back; take advantage of do not hold back; take advantage of do not hold back; take advantage of

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necessary evidentiary documentation necessary evidentiary documentation necessary evidentiary documentation necessary evidentiary documentation –––– do not hold back; take advantage of do not hold back; take advantage of do not hold back; take advantage of do not hold back; take advantage of

legal professional privilegelegal professional privilegelegal professional privilegelegal professional privilege

• Use them as a third party “sounding board” to determine whether the Use them as a third party “sounding board” to determine whether the Use them as a third party “sounding board” to determine whether the Use them as a third party “sounding board” to determine whether the

dispute has any real merit in your favour, or are there sufficient gaps dispute has any real merit in your favour, or are there sufficient gaps dispute has any real merit in your favour, or are there sufficient gaps dispute has any real merit in your favour, or are there sufficient gaps

which may jeopardise your casewhich may jeopardise your casewhich may jeopardise your casewhich may jeopardise your case

GET INVOLVEDGET INVOLVEDGET INVOLVEDGET INVOLVED

• Howard’s viewHoward’s viewHoward’s viewHoward’s view

• Understand our industryUnderstand our industryUnderstand our industryUnderstand our industry

• Understand our business Understand our business Understand our business Understand our business –––– don’t give advice in don’t give advice in don’t give advice in don’t give advice in

a vacuuma vacuuma vacuuma vacuum

• Understand the underlying transaction Understand the underlying transaction Understand the underlying transaction Understand the underlying transaction –––– ask ask ask ask

questionsquestionsquestionsquestions

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questionsquestionsquestionsquestions

• Understand our risk appetiteUnderstand our risk appetiteUnderstand our risk appetiteUnderstand our risk appetite

• don’t fight over issues that we don’t care don’t fight over issues that we don’t care don’t fight over issues that we don’t care don’t fight over issues that we don’t care

aboutaboutaboutabout

• think about ways of resolving the disputethink about ways of resolving the disputethink about ways of resolving the disputethink about ways of resolving the dispute

• Exercise judgment Exercise judgment Exercise judgment Exercise judgment –––– we won’t sue you for we won’t sue you for we won’t sue you for we won’t sue you for

giving your view!giving your view!giving your view!giving your view!

BILLING/FEESBILLING/FEESBILLING/FEESBILLING/FEES

• The balance between cost and involvementThe balance between cost and involvementThe balance between cost and involvementThe balance between cost and involvement

• Case specific billing arrangementsCase specific billing arrangementsCase specific billing arrangementsCase specific billing arrangements

• No surprisesNo surprisesNo surprisesNo surprises

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• Tell us what you’ve doneTell us what you’ve doneTell us what you’ve doneTell us what you’ve done

• And don’t bill us for things we haven’t asked forAnd don’t bill us for things we haven’t asked forAnd don’t bill us for things we haven’t asked forAnd don’t bill us for things we haven’t asked for

• Happiness = a fair price for work done Happiness = a fair price for work done Happiness = a fair price for work done Happiness = a fair price for work done

COMMUNICATIONCOMMUNICATIONCOMMUNICATIONCOMMUNICATION

• Ask us Ask us Ask us Ask us –––– and listenand listenand listenand listen

– How we prefer to communicateHow we prefer to communicateHow we prefer to communicateHow we prefer to communicate

– How we want to work with youHow we want to work with youHow we want to work with youHow we want to work with you

• Presentation is important Presentation is important Presentation is important Presentation is important –––– think about our think about our think about our think about our audienceaudienceaudienceaudience

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audienceaudienceaudienceaudience

• Use executive summariesUse executive summariesUse executive summariesUse executive summaries

• Prepare for meetingsPrepare for meetingsPrepare for meetingsPrepare for meetings

• Let us meet the people who are doing the workLet us meet the people who are doing the workLet us meet the people who are doing the workLet us meet the people who are doing the work

• Push back sometimesPush back sometimesPush back sometimesPush back sometimes

PRACTICE MAKES PERFECTPRACTICE MAKES PERFECTPRACTICE MAKES PERFECTPRACTICE MAKES PERFECT

• Get advance view of potential reception of a dispute by using focus groups Get advance view of potential reception of a dispute by using focus groups Get advance view of potential reception of a dispute by using focus groups Get advance view of potential reception of a dispute by using focus groups

or mock trialsor mock trialsor mock trialsor mock trials

• Can be effective in educating lawyers and clients on risks and potential Can be effective in educating lawyers and clients on risks and potential Can be effective in educating lawyers and clients on risks and potential Can be effective in educating lawyers and clients on risks and potential

outcomesoutcomesoutcomesoutcomes

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• Can also be used to provide input to analysis of resolution possibilitiesCan also be used to provide input to analysis of resolution possibilitiesCan also be used to provide input to analysis of resolution possibilitiesCan also be used to provide input to analysis of resolution possibilities

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Since 1975Since 1975Since 1975Since 1975

– 2 Arbitrations with Hong Kong Government2 Arbitrations with Hong Kong Government2 Arbitrations with Hong Kong Government2 Arbitrations with Hong Kong Government

– 1 Mediation with Contractor (MTR successful)1 Mediation with Contractor (MTR successful)1 Mediation with Contractor (MTR successful)1 Mediation with Contractor (MTR successful)

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