DISPUTE RESOLUTION

16.1 Disputes 16.1.1. In case of any timely Claim, Dispute or other matter involving the interpretation of the Contract Documents, a change in the Contract Sum, and or an Extension of Contract Time, and other matters in question arising out of, or relating to this Contract or the breach thereof, except for Claims which have been waived by the acceptance of final payment, shall be submitted to and decided first by the Owner's Representative as provided in Article 11.5. 16.1.2. If the Dispute submitted to the Owner's Representative as provided for in Article 11.5 is not decided by him within the thirty (30) day period established therein, the Claim shall be deemed rejected. 16.1.3. If the party establishing the Claim is not satisfied with the decision or automatic rejection by the Owner's Representative, the party will have fifteen (15) days to appeal the decision to the Chief of Construction, or equivalent division head, of the Owner. 16.1.4. The Chief of Construction shall have a period of thirty (30) days from the date of receipt of the notice of appeal during which he must render a decision. 16.1.4.1. However, if the Chief of Construction requires additional time to review the Claim, because of the nature or complexity of the Claim or if additional documents and/or information are needed from the Contractor to make a determination, the Chief of Construction shall submit, within five (5) calendar days of receipt of the notice of appeal, a written notice with an estimate of the additional time needed to review said claim and its justification. This additional time, shall not exceed thirty (30) days, unless more time is agreed upon by the parties. 16.1.4.2. If the Chief of Construction does not render a decision within the time allotted, including extensions, then the Claim shall be deemed rejected. 16.1.5. If the Contractor is not satisfied with the decision or automatic rejection by the Chief of Construction, the Claim shall be referred to the Owner and the Contractor. The parties will meet for negotiations within ten (10) working days of the notice of referral of said Claim. If the Dispute has not been resolved within thirty (30) days after said referral (which may be extended by mutual agreement) and subject to any rights to injunctive relief and unless otherwise specifically provided for herein, the parties shall proceed in accordance with Article 16.2. 16.1.6 Contractor shall carry on the Work and adhere to the progress schedule during all Disputes or disagreements with Owner. The Owner will continue making payments under the Contract for Work performed that is not in Dispute. 16.1.7. No Work shall be delayed or postponed pending resolution of any Disputes or disagreement unless Owner and Contractor otherwise agree in writing. - 101 - UNIFORM GENERAL CONDITIONS FOR PUBLIC WORKS CONTRACTS 16.2 Remedies 16.2.1. All Disputes not resolved by the method indicated in Article 16.1, upon written agreement of the parties, shall be submitted to non-binding mediation as indicated in Article 16.3. Either party may, at any time, give written notice to the other party that it does not wish to mediate or to continue to mediate a Dispute. Such notice shall conclude the mediation process. 16.2.2. If the parties fail to agree to submit the Dispute to mediation, or one party decides to cancel the mediation after the mediation has started, or if the mediation process does not resolve all Disputed matters, then the remaining Disputes shall be decided by arbitration, upon timely demand for arbitration, notified by one party to the other within ten (10) days after the mediation process has concluded, if the amount of the claim does not exceed the limits established in Article 16.4.1. The mediation process shall conclude on the date notice is delivered by one party to the other stating that the party does not wish to mediate or to continue to mediate. Any undecided Disputes that exceed the limits established in Article 16.4.1, will be decided by the General Court of Justice of Puerto Rico. 16.3 Mediation 16.3.1. If the parties agree to mediate the Dispute they may chose between: 16.3.1.1. a mutually agreed mediation procedure; or 16.3.1.2. a mediation procedure under the supervision of the Bureau of Claim Resolution by Alternate Methods the Office of the General Court of Justice; or 16.3.1.3. a mediation procedure administered by the American Arbitration Association under its Construction Industry Mediation Rules. 16.3.2. All costs incurred as a result of the mediation shall be borne equally by the parties, unless the mediator orders otherwise in accordance to Article 16.3.4. 16.3.3. The parties will be required to exchange their positions as to the Dispute, fully and in good faith, with a detailed description of the facts and of the applicable law and shall fully exchange supporting documents. If after agreeing to mediate a Dispute a party is substantially unprepared to participate in the proceedings, or fails to participate in good faith, the Mediator at his discretion may require said party to pay all or part of the costs of the mediation incurred by the other party due to the non-compliance with this Article. 16.4 Arbitration 16.4.1. Disputes to be arbitrated shall be limited to those Disputes, which when all sums claimed therefore under the Contract are added, total an aggregate sum of five percent (5%) or less of the Contract Price or $500,000.00 or less, whichever is lower. Only such Disputes where the aggregate amount claimed is below said threshold shall be resolved through the arbitration procedures established in this Article 16.4. The aggregate sum shall be determined on the date of the notice of the demand for arbitration taking into consideration all pending Disputes regarding the Contract submitted by the Contractor pursuant to Articles 11.5 and 16. In order to qualify for resolution thru arbitration, all issues and Claims regarding liability and damages relating to a particular Dispute must be submitted together, within the same arbitration proceeding. The parties are specifically prohibited from submitting the issue of liability to arbitration and thereafter submitting the issue of damages (regarding the same Dispute) to another arbitration proceeding or to the court. - 102 - UNIFORM GENERAL CONDITIONS FOR PUBLIC WORKS CONTRACTS 16.4.1.1. The $500,000.00 threshold will be adjusted every five (5) years. The adjustment will be based on the Consumer Price Index (CPI) published by the Government of Puerto Rico. The base year for such adjustment shall be the year 2010. 16.4.1.2. If Contractor invokes the provisions of this Article 16.4, but at a later date submits additional Claims to the Owner under the same Contract, pursuant to Article 11.5 and/or Article 16, for an additional sum which, if added to the amount claimed under the original Dispute(s), surpasses the threshold amount established in Article 16.4.1, then said additional Disputes that surpass the threshold may not be submitted to arbitration and shall bei decided by the General Court of Justice of Puerto Rico. Nevertheless, the already pending arbitration proceedings under not count towards the threshold stated in Article 16.4.1. 16.4.2. Procedure For Binding Arbitration. 16.4.2.1. Contractor shall submit to the Owner, together with the notice of demand for arbitration of a Dispute, a list of no less than five (5) proposed arbitrators, together with their respective curriculum vitae and a disclosure statement from each as to possible conflicts of interest. 16.4.2.2. Within five (5) working days of receipt of the notice of demand for arbitration, Owner shall either: (i) select one (1) arbitrator from the Contractor's list, or (ii) if all arbitrators proposed by Contractor are unacceptable to Owner, submit to Contractor a list of no less than five (5) proposed arbitrators, together with their respective curriculum vitae and a disclosure statement from each as to possible conflicts of interest. 16.4.2.3. Within five (5) working days of receipt of the Owner's list, contractor shall either: (i) select one (1) arbitrator from such list or (ii) reject all arbitrators from the Owner's list. If within the following ten (10) days the parties cannot agree as to an arbitrator or a panel of arbitrators, then each party within the following five (5) days will unilaterally appoint and notify to the other one arbitrator, and the two (2) arbitrators so appointed shall within ten (10) days after the appointment of both arbitrators select a third arbitrator and notify the Owner and the Contractor of said selection, and the three (3) arbitrators shall constitute the panel of arbitrators that shall decide the Dispute. The arbitrators so appointed or selected need not be on the original lists of arbitrators. Within ten (10) days of the selection of the third arbitrator, each arbitrator shall notify Owner and Contractor their respective curriculum vitae and statement as to possible bias or conflict of interest. 16.4.2.4. The arbitration proceedings shall be conducted under the provisions of the Puerto Rico Arbitration Act, Act No. 376 of May 8, 1951, as amended. 16.4.3. Award 16.4.3.1. The award entered need not include written determinations of fact and conclusions of law and the award shall be final and not be reviewable or appealable due to errors of fact or of law. Nevertheless, the arbitrators will endeavor to ascertain the facts and follow the law.