Amicable Settlement

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Amicable Settlement is the most common form of dispute resolution between Contracting Authority and Contractor and the one preferred in the majority of cases. This is a discussion/ negotiation process between the parties involved with a view to find a commonly accepted solution for the disputes that have arisen and one which satisfies both parties. The resolution through amicable settlement presumes that the Contracting Authority as much as the Contractor are willing to proceed with mutual concessions in order to bring about an accord (win - win situation).

Amicable Settlement as a method of dispute resolution is characterised by the following advantages:

Speediness: The disputes are resolved within a short period of time.
Low Cost: It is the method of dispute resolution with the lower cost as it does not requires the involvement of a Third party, something which applies in the other methods and which burdens the parties involved with additional costs.
Secrecy: The contract information and the disputes of the two parties are not disclosed to third parties.
Maintenance of the relationship between Contracting Authority and Contractor: The amicable settlement is based on the intention of both parties to resolve their disputes in cooperation and ensure the continuity of the Project to the benefit of the Contracting Authority as much as that of the Contractor. From this point of view the amicable settlement allows the preservation of the good relations between the two parties.
Control over the procedure and examination of several potential solutions: The non participation of a Third party in the amicable settlement process ensures its absolute control by the Contracting Authority and the Contractor. In addition and given the fact that the solution must be towards the direction of ensuring a benefit for both sides, the two parties shall examine the entire spectrum of potential solutions.


© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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