Shortening negotiations by 19 days for a developer
Successfully reached a settlement between an investor and two contractors in a dispute over delays in the amount of 84k PLN.
The dispute at Bud-Poz Sp. z o.o. concerned delays on the construction site at Marcelińska St. The investor halted payments to two subcontractors because the deadline for handing over the installation shifted by 14 business days.
The challenge
The main problem was the amount of 84,300 PLN due to accrued contractual penalties. The heating installation contractor and the electrical company argued about who first blocked access to the installation shafts. The conflict lasted since March 4, 2024, and completely stopped plastering work on the second floor of the building.
Emotions between the crew heads were so high that they stopped taking each other's calls. The developer was threatened with breaking deadlines with the bank financing the investment. Each day of downtime cost the company about 2,800 PLN net for rental of scaffolding and office containers.
Our approach
We used our architecture of compromise building method, dividing the process into 4 specific mediation sessions. We focused exclusively on construction log entries from February and March, cutting out the personal biases of the parties. We looked for touchpoints in the schedule that would allow for parallel work.
Our team of mediators, drawing on 8 years of experience in mediation, prepared an alternative cost analysis. We showed the parties that a court trial would last at least 11 months and consume more than the disputed amount. Facts beat emotions during the second meeting, when we established a precise list of missing technical entries.
The solution
We prepared a settlement protocol in which the parties split the cost of the delay in a ratio of 60 to 40 percent. The developer agreed to waive 23% of the accrued penalties in exchange for accelerating finishing work by 5 business days.
We set a new, rigid schedule for entering individual floors, which all three parties signed on April 23, 2024. Additionally, we introduced a rule of short, 15-minute daily reports sent by SMS to the site manager, which eliminated communication errors between electricians and plumbers.
Results
Thanks to mediation, construction started within 48 hours of signing the documents. The parties avoided a costly trial in the commercial court and maintained business relations for the next stage of the investment.
Timeline
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March 7, 2024Analysis of documentation and construction log by the mediator.
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March 21, 2024First joint mediation session at the developer's office.
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April 12, 2024Verification of actual costs of equipment downtime on site.
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April 23, 2024Signing of final settlement and resumption of plastering work.
"Mediation allowed us to avoid having subcontractor accounts blocked. The price for the sessions was fair, and concrete facts from the construction log quickly closed the topic of futile arguments."