ARCHIVED GC8 - Dispute Resolution

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Legal text for SACC item

Public Works and Government Services Canada

GC8.1  Interpretation
GC8.2  Consultation and Co-operation
GC8.3  Notice of Dispute
GC8.4  Negotiation
GC8.5  Mediation
GC8.6  Confidentiality
GC8.7  Settlement
GC8.8  Rules for Mediation of Disputes
       GC8.8.1       Interpretation
       GC8.8.2       Application
       GC8.8.3       Communication
       GC8.8.4       Appointment of Project Mediator
       GC8.8.5       Confidentiality
       GC8.8.6       Time and Place of Mediation
       GC8.8.7       Representation
       GC8.8.8       Procedure
       GC8.8.9       Settlement Agreement
       GC8.8.10      Termination of Mediation
       GC8.8.11      Costs
       GC8.8.12      Subsequent Proceedings


GC8.1  Interpretation

1)     "dispute" means any disagreement regarding any issue identified by 
       the Contractor in the notice submitted to Canada in accordance with 
       paragraph 2 of GC8.3, "Notice of Dispute", and includes any claim by 
       the Contractor arising from such disagreement and any counterclaim 
       by Canada, but does not include any claim by either party for 
       punitive or exemplary damages, injury to persons, death, or any 
       claim based on an allegation of libel or slander.

2)     The alternative dispute resolution procedures set out in GC8, do not 
       apply to any claim by Canada against the Contractor except any 
       counterclaim in a dispute as defined in paragraph 1 of GC8.1, 
       including, but not limited to, any claim of setoff regarding any 
       amount due to Canada under GC5.10, "Assessment and Damages for Late 
       Completion".

GC8.2  Consultation and Co-operation

1)     The parties agree to maintain open and honest communication 
       throughout the performance of the Contract.

2)     The parties agree to consult and co-operate with each other in the 
       furtherance of the Work and the resolution of problems or 
       differences that may arise.

GC8.3  Notice of Dispute

1)     Any difference between the parties to the Contract of any nature 
       arising out of or in connection with the Contract which could result 
       in a claim by the Contractor against Canada, and which is not 
       settled by consultation and co-operation as envisaged in GC8.2, "
       Consultation and Co-operation", shall be resolved in the first 
       instance by Canada, whose written decision or direction shall be 
       final and binding subject only to the provisions of GC8.  Such 
       written decision or direction includes, but is not limited to, any 
       written decision or direction by Canada under any provision of the 
       General Conditions.

2)     The Contractor shall be deemed to have accepted the decision or 
       direction of Canada referred to in paragraph 1) of GC8.3 and to have 
       expressly waived and released Canada from any claim in respect of 
       the particular matter dealt with in that decision or direction 
       unless, within 15 working days after receipt of the decision or 
       direction, the Contractor submits to Canada a written notice of 
       dispute requesting formal negotiation under GC8.4, "Negotiation".  
       Such notice shall refer specifically to GC8.4, "Negotiation", and 
       shall specify the issues in contention and the relevant provisions 
       of the Contract.

3)     The giving of a written notice in accordance with paragraph 2) of 
       GC8.3 shall not relieve the Contractor from complying with the 
       decision or direction that is the subject of the dispute.  Such 
       compliance, however, shall not be construed as an admission by the 
       Contractor of the correctness of such decision or direction.

4)     If a dispute is not resolved promptly, Canada shall give such 
       instructions as, in Canada's opinion, are necessary for the proper 
       performance of the Work and to prevent delays pending a resolution 
       of the matter.  Unless Canada terminates the Contract, orders the 
       Contractor to suspend the Work, or takes the Work out of the hands 
       of the Contractor, the Contractor shall continue to perform the Work 
       in accordance with the provisions and requirements of the Contract 
       and the instructions of Canada.  Such performance shall not 
       prejudice any claim that the Contractor may have.

5)     Nothing in GC8 relieves the Contractor from its obligation to 
       provide any other notice required by the Contract within the time 
       specified in the Contract, including but not limited to, any notice 
       required under GC6.2, "Changes in Subsurface Conditions".

GC8.4  Negotiation

1)     Within 10 working days after receipt by Canada of a notice referred 
       to in paragraph 2) of GC8.3, "Notice of Dispute", or within such 
       other period of time as may be mutually agreed to, the parties shall 
       commence formal negotiations in order to resolve the dispute.  
       Negotiations shall occur initially between representatives of the 
       Contractor and Canada who play a direct supervisory role in the 
       performance, administration or management of the Contract.

2)     If the representatives referred to in paragraph 1) of GC8.4 are 
       unable to resolve some or all of the issues which are the subject of 
       the negotiations within 10 working, the parties shall refer the 
       remaining issues which are in dispute to a second level of 
       negotiation between a principal or principals of the Contractor and 
       a senior level manager or senior level managers representing Canada.

3)     If negotiations fail to resolve the dispute within 30 working days 
       from the date of delivery of the notice referred to in paragraph 2) 
       of GC8.3, "Notice of Dispute", or within such longer period as may 
       have been agreed to by the parties, the Contractor may, by giving 
       written notice to Canada, in accordance with GC2.3, "Notices", 
       within 10 working days from the end of such period, request that 
       mediation be undertaken to assist the parties to reach agreement on 
       the outstanding issues.

4)     If the Contractor does not request mediation within the period 
       permitted by paragraph 3) of GC8.4, the Contractor shall be deemed 
       to have accepted the decision or direction of Canada under paragraph 
       1) of GC8.3, "Notice of Dispute", and to have expressly waived and 
       released Canada from any claim in respect of the particular matter 
       dealt with in that decision or direction. 
GC8.5  Mediation

1)     If the Contractor has requested mediation in accordance with 
       paragraph 3) of GC8.4, "Negotiation", mediation shall be conducted 
       in accordance with GC8.8, "Rules for Mediation of Disputes".

2)     If a Project Mediator has not previously been appointed for the 
       purposes of the Contract, a Project Mediator shall be appointed in 
       accordance with GC8.8, "Rules for Mediation of Disputes", forthwith 
       after delivery of a notice in accordance with paragraph 3) of GC8.4, 
       "Negotiation", requesting mediation.

3)     If the dispute has not been resolved within

       (a)    10 working days following the appointment of a Project 
              Mediator in accordance with paragraph 2) of GC8.5, if a 
              Project Mediator was not previously appointed;

       (b)    10 working days following receipt by Canada of a written 
              notice in accordance with paragraph 3) of GC8.4, "Negotiation
              ", if a Project Mediator was previously appointed; or

       (c)    such other longer period as may have been agreed to by the 
              parties;

       the Project Mediator shall terminate the mediation by giving written 
       notice to the parties stating the effective date of termination.

GC8.6  Confidentiality

1)     All information exchanged during alternative dispute resolution 
       procedures, by whatever means, shall be without prejudice and shall 
       be treated as confidential by the parties and their representatives, 
       unless otherwise required by law.  However, evidence that is 
       independently admissible or discoverable shall not be rendered 
       inadmissible or non-discoverable by virtue of its use during an 
       alternative dispute resolution process.

GC8.7  Settlement

1)     Any agreement to settle all or any part of a dispute, by whatever 
       means, shall be in writing and be signed by the parties or their 
       authorized representatives.

GC8.8  Rules for Mediation of Disputes

       GC8.8.1       Interpretation

In these Rules

1)     "Coordinator" means the person designated by Canada to act as the 
       Dispute Resolution Coordinator.

       GC8.8.2       Application

1)     By mutual agreement, the parties may change or make additions to the 
       Rules.

       GC8.8.3       Communication

1)     Written communications pursuant to these Rules shall be given in 
       accordance with GC2.3, "Notices".

       GC8.8.4       Appointment of Project Mediator 
1)     The parties to the Contract may, by mutual consent, at any time 
       after entry into the Contract, appoint a mediator (the "Project 
       Mediator") to conduct mediation proceedings in accordance with these 
       Rules for Mediation of Disputes, in regard to any dispute that may 
       arise with regard to the interpretation, application or 
       administration of the Contract.  In this case, they shall jointly 
       enter into a contract with the appointed Project Mediator, which 
       contract shall be in a form drafted by the Coordinator and agreed to 
       by the parties.

2)     If the parties do not appoint a Project Mediator pursuant to 
       paragraph 1) of GC8.8.4, the parties shall appoint a Project 
       Mediator within 17 working days following receipt of a written 
       notice from the Contractor, in accordance with GC2.3, "Notices", 
       requesting that mediated negotiations be undertaken in accordance 
       with these Rules to assist the parties to reach agreement on any 
       outstanding issues that may be in dispute.  Any contract entered 
       into with the appointed Project Mediator shall meet the requirements 
       as set out for the contract described in paragraph 1) of GC8.8.4.

3)     When mediation is requested by the Contractor pursuant to paragraph 
       3) of GC8.4, "Negotiation", if the parties have previously entered 
       into a contract with a Project Mediator, the parties shall within 2 
       days send to both the Project Mediator and the Coordinator

       (a)    a copy of the notice requesting negotiation under paragraph 2) 
              of GC8.3, "Notice of Dispute";

       (b)    a copy of Canada's written position in relation to the notice, 
              the issues in contention and the relevant provisions of the 
              contract; and

       (c)    a copy of the Contractor's written request for mediation 
              required under paragraph 3) of GC8.4, "Negotiation".

4)     If the parties have not agreed on a Project Mediator, the parties 
       shall forthwith provide the Coordinator with the written materials 
       referred to in subparagraphs 3)(a), 3)(b) and 3)(c) of GC8.8.4 
       together with a request that the Coordinator assist in the 
       appointment of a mutually acceptable Project Mediator in accordance 
       with these Rules.

5)     Within 5 working days following receipt of the request and materials 
       referred to in paragraph 4) of GC8.8.4, the Coordinator shall 
       provide the parties with a list of qualified private sector 
       mediators obtained from an independent and impartial entity, 
       together with instructions to each party to individually and 
       confidentially select and rank their preferred and fully acceptable 
       choices of mediator in descending order.  Each mediator listed shall 
       be impartial and independent of the parties, and shall be an 
       experienced and skilled commercial mediator, preferably with 
       knowledge of the subject matter of the dispute.

6)     Within 10 working days of receipt of the list referred to in 
       paragraph 5) of GC8.8.4 each party shall comply with the 
       instructions accompanying the list(s) and shall deliver the 
       completed listing to the Coordinator.

7)     Within 2 working days following receipt of the completed listings, 
       the Coordinator shall select the highest common ranked mediator to 
       act as Project Mediator for the purposes of the contract.

8)     In the event of a tie, the Coordinator shall consult both parties to 
       re-evaluate their rankings in order to assist the Coordinator in 
       selecting a Project Mediator acceptable to both parties.  If the 
       parties cannot agree upon a Project Mediator, the Coordinator shall 
       forthwith provide the parties with a second list of mediators and 
       the procedure shall be repeated.

9)     If the parties have not previously entered into a contract with a 
       mutually acceptable Project Mediator, the Coordinator shall use 
       reasonable efforts to negotiate a contract with a mutually 
       acceptable Project Mediator on behalf of the parties, which contract 
       shall incorporate or otherwise comply with the provisions of these 
       Rules.  If negotiations are unsuccessful, or if for other reason the 
       individual is unwilling or unable to enter into a contract to act as 
       Project Mediator, the Coordinator shall repeat the process with the 
       second-highest common ranked mediator.

10)    The parties agree that, upon successful completion of the 
       negotiations referred to in paragraph 9) of GC8.8.4, they shall 
       jointly enter into a contract with the selected Project Mediator, 
       which contract shall be in a form drafted by the Coordinator and 
       agreed to by the parties.

11)    Upon execution of the contract with the Project Mediator referred to 
       in paragraph 10) of GC8.8.4 the Coordinator shall provide the 
       Project Mediator with copies of the documents referred to in 
       paragraph 3) of GC8.8.4.

       GC8.8.5       Confidentiality

1)     Subject to paragraph 2) of GC8.8.5, and unless otherwise agreed in 
       writing by the parties, the Project Mediator, the parties and their 
       counsel or representatives shall keep confidential all matters and 
       documents disclosed during mediation proceedings except where the 
       disclosure is necessary for any implementation of any agreement 
       reached or is required by law.

2)     Evidence that is independently admissible or discoverable in any 
       arbitral or judicial proceeding shall not be rendered inadmissible 
       or non-discoverable by virtue of its use in mediation proceedings.

3)     Neither party shall make transcripts, minutes or other records of a 
       mediation conference.

4)     The personal notes and written opinions of the Project Mediator made 
       in relation to mediation are in the Project Mediator's sole 
       possession and control, are confidential, and may not be used in any 
       subsequent proceeding between the parties or where they are opposed 
       in interest without the express written permission of the parties.

5)     All information exchanged during mediation procedures, by whatever 
       means, shall be without prejudice and shall be treated as 
       confidential by the parties and their representatives, unless 
       otherwise required by law.

       GC8.8.6       Time and Place of Mediation

1)     The Project Mediator, in consultation with the parties shall set the 
       date, time and place of any mediation conference as soon as possible, 
       bearing in mind that, subject to agreement to the contrary between 
       the parties, only 10 working days are available within which to 
       attempt to settle the dispute.

       GC8.8.7       Representation

1)     Representatives of the parties may be accompanied at the mediation 
       conference by legal counsel or any other person.

2)     If the Project Mediator is a lawyer, the Project Mediator shall not 
       provide legal advice to a party during the course of the mediation 
       conference, but may recommend that a party obtain independent legal 
       advice before finalizing a settlement agreement.

       GC8.8.8       Procedure

1)     The parties agree to an exchange of all facts, information and 
       documents upon which they intend to rely in any oral or written 
       presentation during the mediation.  This exchange shall be completed 
       no later than 2 working days prior to the date set for a mediation 
       conference.
 
2)     The Project Mediator shall be free to meet with the parties 
       individually during a mediation conference if the Project Mediator 
       is of the opinion that this may improve the chances of a mediated 
       settlement, and either party may request such an individual meeting 
       at any time.

3)     The parties may agree to extend the 10 working days available for 
       settlement of the dispute through mediation, and the Project 
       Mediator shall record that agreement in writing.

       GC8.8.9       Settlement Agreement

1)     The parties shall record in writing any settlement agreement reached, 
       with sufficient detail to ensure a clear understanding of

       (a)    the issues resolved;

       (b)    any obligations assumed by each party including criteria to 
              determine if and when these obligations have been met; and

       (c)    the consequences of failure to comply with the agreement 
              reached.

2)     The parties agree to carry out the terms of a settlement agreement 
       as soon as possible and, in any event, within any time periods 
       specified in the agreement.

       GC8.8.10      Termination of Mediation

1)     Either party may withdraw from mediation at any time without reason 
       and, in that event, the Project Mediator shall give each party a 
       written notice terminating the mediation and establishing the 
       effective date of termination.

2)     If, in the opinion of the Project Mediator, either party fails to 
       mediate in good faith or fails to comply with the terms of these 
       Rules, or if the Project Mediator, at any time during mediation, is 
       of the opinion that further negotiations will fail to resolve the 
       issues outstanding, the Project Mediator may terminate the 
       negotiations by providing the parties with a written notice of 
       termination, stating therein the Project Mediator's reasons for the 
       termination, and the effective date of termination.

3)     If a dispute has not been resolved within 10 working days or such 
       other longer period as may have been agreed to by the parties, the 
       Project Mediator shall terminate the mediation by giving written 
       notice to the parties stating the effective date of termination.

       GC8.8.11      Costs

1)     The parties agree that they will each be responsible for the costs 
       of their own representatives and advisors and associated travel and 
       living expenses.  Fees and expenses of the Project Mediator and all 
       administrative costs of mediation, such as the cost of the meeting 
       room(s), if any, shall be borne equally by the parties.

       GC8.8.12      Subsequent Proceedings

1)     The parties shall not rely on or introduce as evidence in any 
       arbitral or judicial proceeding, whether or not such proceeding 
       relates to the subject matter of mediation,

       (a)    any documents of other parties that are not otherwise 
              producible in those proceedings;

       (b)    any views expressed or suggestions made by any party in 
              respect of a possible settlement of issues;

       (c)    any admission made by any party in the course of mediation 
              unless otherwise stipulated by the admitting party; and

       (d)    the fact that any party has indicated a willingness to make 
              or accept a proposal or recommendation for settlement.

2)     The Project Mediator shall neither represent nor testify on behalf 
       of either of the parties in any subsequent investigation, action or 
       proceeding relating to the issues in mediation proceedings.
3)     The Project Mediator shall not be subpoenaed to give evidence 
       relating to

       (a)    the Project Mediator's role in mediation; or

       (b)    the matters or issues in mediation;

       in any subsequent investigation, action or proceeding and the 
       parties agree to vigorously oppose any effort to have the Mediator 
       so subpoenaed.