Transactions on Science and Technology Vol. 10, No.

3, xx - xx, 2023

Unveiling the Root Causes and Consequences

of Project Delays and Litigation
Challenges in Sabah
Malik Fahad1, Habib Musa Mohamad2#, Muhd Fauzy Sulaiman3
1,2,3, Faculty of Engineering, Universiti Malaysia Sabah, Jalan UMS, 88400 Kota Kinabalu, Sabah, MALAYSIA
#Corresponding author. E-Mail: habibmusa@ums.edu.my; Tel: +60178629545; Fax: +6088-435324.

ABSTRACT The construction industry, inherently intricate and multifaceted, assumes a critical role in the progress of
Sabah, Malaysia. Effective communication stands as the cornerstone of successful project execution in this domain.
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However, the absence of clear communication often precipitates project delays, escalated costs, and disputes culminating
in complex legal challenges. This research delves into the intricate landscape of communication breakdowns, their root
causes, and the subsequent far-reaching consequences on construction projects in Sabah. Gathering qualitative insights
from in-depth knowledge about previous court cases and quantitative data derived from a structured survey, this study
seeks to dissect the contributing factors to communication disparities, which propel project delays and eventual legal
entanglements. By systematically analyzing amassed data and juxtaposing it with relevant case precedents, this research
aims to unveil the pivotal nexus between miscommunication, project delays, and ensuing litigation. The study draws on a
plethora of academic literature, industry reports, and practical instances, exemplified by the Federal Court ruling in United
Project Management (M) Sdn Bhd v. Southern Builders (J) Sdn Bhd (2003) and another confidential case of bankruptcy.
These pivotal cases underscored the applicability of the Construction Industry Payment and Adjudication Act (CIPAA) to
disputes in construction contracts. The research strives to not only unravel communication challenges but also provide
actionable insights for stakeholders to implement proactive communication strategies. Ultimately, this study aspires to
offer a holistic framework for stakeholders to navigate communication intricacies, thereby mitigating project delays and
preempting the legal complexities that often ensue. Through an amalgamation of theoretical underpinnings, real-world
evidence, and expert perspectives, this research provides a comprehensive framework for improving communication in
Sabah's construction industry, enriching the discourse with theoretical insights, empirical data, and expert perspectives.
These findings align with the survey consensus (99.18%) among Malaysian construction stakeholders that
miscommunication leads to project delays. Key culprits are differences in work practices (26.8%) and the absence of
communication protocols (25.4%), emphasizing the need for improvements. The ramifications of miscommunication
include project delays, conflicts, higher costs and legal disputes, stressing the importance of refining communication
practices. This study offers solutions to mitigate delays and preempt legal complexities in construction projects.
Received xxxxxx Revised xxxxxx Accepted xxxxxx In press xxxxxx Online xxxxxx
© Transactions on Science and Technology

INTRODUCTION
The construction industry in Sabah, Malaysia, is experiencing a paradigm shift due to rapid
urbanization and technological advancements, leading to increasingly intricate projects involving
various stakeholders, including clients, consultants, and contractors (Gamil & Abdul Rahman, 2018).
Effective communication has emerged as a pivotal factor in addressing the challenges posed by this
dynamic landscape, ensuring the attainment of successful project outcomes. However, scholarly
research has consistently highlighted that deficient communication during the project lifecycle can
culminate in project delays and, in severe instances, project failure (Chan & Kumaraswamy, 2010;
Baiden et al., 2016). This study aims to delve into the intricate fabric of communication within
construction projects in Sabah and scrutinize its ramifications on project performance and legal
ramifications. As the construction industry continues to evolve, the need for seamless
communication among diverse project teams, each harbouring distinct roles, and responsibilities,
becomes increasingly indispensable (Acharaya et al., 2006). Miscommunication, particularly
concerning contractual terms and obligations, has been shown to yield disputes and even litigation,
thereby underscoring the paramount importance of lucid, effective communication (Yang, 2012).

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In the realm of construction contracts, three pivotal components include Bill of Quantities
(BOQs), Technical Specifications, and Project Drawings, each bearing unique significance for both
parties involved (Yang, 2012). However, miscommunication surrounding these contract elements
has been demonstrated to precipitate disputes and arbitration processes (Acharaya et al., 2006). This
research endeavours to investigate into the root causes and far-reaching consequences of such
miscommunication, shedding light on its profound impact on project health and its potential to
trigger legal complexities.

By comprehensively examining the fundamental causes of communication breakdowns and their

repercussions within construction projects, this research seeks to offer invaluable insights to both
industry practitioners and policymakers. The exploration of the roles played by pertinent
regulations and guidelines, such as the Construction Industry Payment and Adjudication Act
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(CIPAA) and the best practices advocated by the Construction Industry Development Board (CIDB),
will provide a holistic perspective on how effective communication can be fostered (CIDB, 2017).
Ultimately, this study aspires to optimize project management strategies, mitigate potential risks,
and pave the way for streamlined and triumphant construction projects in the Sabah region.

LITREATURE REVIEW
Miscommunication is a pervasive challenge within the construction industry, arising from
breakdowns in information exchange among stakeholders like clients, contractors, and consultants
(Shen et al., 2021). Such failures can encompass inadequate data sharing, misinterpretation of
technical or financial details, and ambiguity in role assignments. The repercussions of
miscommunication can be profound, causing project delays, errors, budget overruns, and even legal
conflicts among stakeholders (Yu et al., 2018). The multifaceted nature of construction projects
involving various stakeholders increases the complexity of communication breakdowns. Addressing
this issue is crucial for successful project outcomes. The main purpose of communication in this
industry is to share or inform ideas, opinion for desired action and facts between all involved
parties. In this process the required information must be transparently communicated to the receiver
without confusion and misunderstanding (Lee & Kim, 2018). By building constructive feedback
loops effective communication not only helps to improve the management it also helps to strengthen
the team and their confidence. In the result these factors help to reduce the construction time, help to
reduce the budget and safety of project. Sometime in projects contractually driven relationship can
lack of mutual respect for each other due to ineffective communication. If there is lack of
communication and misunderstanding in the project can lead to several costly problems during the
project life cycle (Lee & Kim, 2018).

Generally, there are two main types of delays which are Inexcusable delay and Excusable delay
(Banerjee, 2022). Inexcusable delays are mostly from the contracted side, in some cases the contractor
can claim but and, in some cases, additional cost is to be paid by the contractor party and mostly
must pay for liquidity damages. On the other hand, excusable delays such as due to weather
condition or any other reason from owner’s side can lead to extension of time EOT (Banerjee, 2022).
In excusable delays it’s easier for contractors to get the claims and contractors are excused from
liabilities as well. In construction projects disputes mainly occur in inexcusable delays and that lead
to complicated litigation and arbitrations. During the year 2020 Spring Energy Sdn Bhd had an issue
of payment with Maju Holdings Sdn Bhd. In this case Spring Energy Sdn Bhd commenced and
action against the defender Maju Holding Sdn Bhd for sums due from Payment certificate 22 and 23
was held in session court (Wong, 2021). The plaintiff has proven in court that those payments
certificates have no issue in their element’s clarity, incontrovertibility and have been finalized
clearly. The judgment was in favor of the contractor and defendant was ruled to pay the sums

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(Wong, 2021). As per details of case if there was lack of communication from both parties on
mentioned case. If communication was done properly and things were being verified there was
minimal chances that it was going to lead to court.

Conflicts, Causes and Effect

Conflicts are the part of a construction projects that effects project estimated cost, completion
time, reduce productivity and reduces the project profit, it can have many causes that are sometimes
anonymous, most of the disputes begins when there is the difference. Most of the time it is
considered that the poor management at the site is the main reason behind the major conflict.
Contractors for granting extension of time have taken the first step to identify a problem,
investigate and find possible solutions. Prior to the usage of S-Curve analysis the root cause of delay
was firstly identified, secondly analysis of manpower and thirdly monitoring by the use of financial
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S-curve. The S-curve is used in generation of reports to developer team, for warning strength of
team and for visualizing the progress of the project of time (Mohamad et al., 2021).

Table 1: below illustrates the causes that are responsible for the delay in the project that includes
16 major points (Mohamad et al., 2021).

It was contractually decided to hand over the whole project in 2015, but by December 2014 just
after passing 21 months of project, it was observed that the project is behind the schedule 5.96 factor
behind at 80.47 % of schedule. By this time, it was contractually decided to have an actual progress
of 74.78% (Mohamad et al., 2021).

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Construction laws and regulations:

The following laws and contracts are considered to study the impact of communication in the
construction industry. As in survey in depth knowledge about these laws is checked in people who
are involved in construction industry. As due to the limitations of research only these following laws
are considered for this project.

• Construction Industry Development Board (CIDB).

• Construction Industry Payment and Adjudication Act 2012 (CIPAA) was introduced in
2012 and has been enforced in the construction industry since 15th April 2014.
• The Pertubuhan Akitek Malaysia (PAM) -Agreement and conditions of PAM Contract
2018 (With Quantities)
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RESERCH OBJECTIVE
The objective of this research endeavor is to assess unveiling Roots, Causes and Consequences
inefficient communication in construction projects, particularly its role in fostering complex
litigation and arbitration. The research objectives are outlined as follows:

• To investigate the underlying reasons and repercussions associated with insufficient

communication within project management.
• To exemplify the factors contributing to delays in the scrutiny of Interim Payment
Applications (IPA) and payment-related concerns, subsequently leading to arbitration.
• To dissect prevailing legal disputes stemming from ineffective communication, aligning
them with established legal statutes, and devising enhanced strategies to facilitate
effective communication.

RESERCH SCOPE
In this study the following scope will be covered.

• This research will mainly focus on the causes of ineffective communication and what are
the effects of that on the project life cycle.
• Issues related to the Private Construction Project with (CIDB) G5 and above category (Rm
5 million or more) will be Evaluated.
• What are the sources of delays in IPA verification due to ineffective communication and
how conflict over nonpayment claims can lead to Arbitration.
• How discriminations of contract can lead to management issues and legal concerns that
involves local authorities.

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METHODOLOGY
This chapter outlines the methodology adopted to explore the root causes and consequences of
miscommunication in Sabah's construction industry. A mixed-method approach, combining
qualitative surveys and extensive desk research, was used.

Waterfall Methodology:
This sequential project management approach includes phases like requirements gathering,
analysis, design, implementation, testing, deployment, and maintenance. It guided the research
process. Following are the stages of Waterfall Methodology:
• Plan: Defined research questions and objectives based on a literature review, identifying
the research gap.
• Design: Developed a research plan, including survey and interview questions.
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• Data Collection: Conducted surveys and interviews, collected relevant data.

• Data Analysis: Analyzed data for patterns and trends.
• Reporting: Presented findings and recommendations.
• Review: Evaluated the research process and its implications.

Case study
Two distinct cases were selected to examine the consequences of ineffective communication
in construction projects leading to complex litigation and arbitration. The first case involved a
dispute between United Project Management (M) Sdn Bhd and Southern Builders (J) Sdn Bhd,
emphasizing the miscommunication of contract documents and its repercussions. This case
dissected the dispute, including contract interpretation and compensation assessment during
arbitration. The second case centered on a confidential dispute between Company A (Contractor)
and Company B (Client). Contract termination, exacerbated by payment and bankruptcy issues due
to miscommunication, led to a legal dispute. These cases underscore the critical role of effective
communication in avoiding such complications. To complement the case studies, a structured
survey gauged stakeholders' perceptions and experiences within the construction industry, seeking
insights on how miscommunication instigates disputes and leads to legal conflicts and arbitration.
This research aims to comprehensively explore the multifaceted dimensions of ineffective
communication's impact on construction projects, including complex legal entanglements and
arbitration proceedings.

Survey
To gather quantitative data on the impact of ineffective communication in construction projects
and its relation to complicated litigation, we designed a structured self-administered questionnaire
consisting of closed-ended and open-ended questions. It was tailored for individuals associated with
Sabah's construction industry and aimed to address the research objectives of this project.

Participants:
The survey targeted construction professionals in Sabah, Malaysia, including project managers,
engineers, quantity surveyors, and legal experts. Participants had at least one year of experience and
worked on projects exceeding CIDB G5 category (RM 5 million and above). Participation in
arbitration or litigation related to construction projects was optional, and participants' knowledge of
communication processes and contract forms used in Malaysia was assessed.

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Table 2: Survey structure summary of objectives with different sections.

Section Title Description
1 Demographic Information Collecting background data for context.
2 Causes of Explore factors causing ineffective
Miscommunication communication. Rate familiarity, cultural
impact, channels, and conflict frequency.
3 Impact of Assess consequences on delays, costs, quality,
Miscommunication arbitration, and project adherence.
4 Disagreements due to Investigate conflicts from communication
Miscommunication breakdowns. Rate knowledge of legal aspects.
5 Legal Concerns due to Understand legal implications. Rate knowledge
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Miscommunication of contract terms and legal awareness.

6 Court Cases Examples of Gather real cases. Rate agreement with
Miscommunication miscommunication leading to disputes.
7 Importance of Effective Measure communication's significance. Rate
Communication solutions, protocols, and visual aids.
Lastly Additional Solutions Open-ended question for industry
open improvement suggestions.
ended

Analysis
To conduct the analysis for this research, you will employ both quantitative and qualitative
methods. The quantitative aspect will involve the statistical analysis of survey data, including
calculating frequencies, percentages, and potentially using inferential statistics to identify significant
relationships or patterns. This statistical analysis will allow you to quantify the prevalence of
miscommunication issues, their impacts, and participants' perceptions.
On the other hand, the qualitative analysis will focus on the case studies and open-ended survey
responses. Here, you will use thematic analysis to identify recurring themes, patterns, and insights
from the qualitative data. Thematic analysis will help uncover the nuanced aspects of
miscommunication in the construction industry and provide a deeper understanding of the issue.
By combining these quantitative and qualitative approaches, you will achieve a comprehensive and
multifaceted analysis of the impact of ineffective communication in construction projects, shedding
light on the root causes and potential solutions to mitigate these challenges.

RESULT AND DISCUSSION

In the initial survey results for Objective One, responses were gathered from four main parties
involved in construction projects. Clients accounted for 22% of the total responses, while consultants
contributed 28%. Most responses, totalling 44%, came from contractors. Additionally, there was a 6%
contribution from other stakeholders within the construction industry. These percentages reflect the
varying levels of participation and input from different parties, allowing for a comprehensive
examination of communication issues from multiple perspectives within the construction sector.
Overwhelmingly, 99.18% of surveyed construction stakeholders concur that miscommunication can
lead to project delays, while a mere 0.88% hold an opposing view.

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Figure 1: Roles in construction of parties involved in survey.

Among the factors contributing to communication issues in Sabah, Malaysian construction projects,
differences in work practices hold the highest share at 26.8%. This is followed by a lack of
communication protocols at 25.4%. Other significant factors include language barriers at 18.6%,
technological limitations at 14.1%, and cultural differences at 12.4%. Only a minor percentage, 2.5%,
attribute communication issues to other factors not listed here. Ineffectual communication in
construction projects has multifaceted repercussions, as revealed by the respondents. A significant
25.62% believe it impacts all listed aspects, emphasizing its far-reaching consequences. Specifically,
23.97% assert that it causes delays in project completion, demonstrating a substantial impact.
Additionally, 21.07% highlight conflicts between stakeholders as a prominent outcome, while
16.53% identify increased project costs. Surprisingly, a noteworthy 11.57% connect ineffective
communication with arbitration and litigations. This situation parallels the international landscape,
as studies emphasize the pervasive impact of poor communication on construction projects. (Smith
& Tan, 2021; Lee, 2019), as per their research Malaysia's construction sector, differences in work
practices (26.8%) and the absence of communication protocols (25.4%) are key contributors to
communication issues. These findings reflect the diverse and substantial influence of
communication quality on construction endeavors.

The following table presents a summarized perception analysis from survey responses by
different stakeholders in the construction industry. It reflects their viewpoints on the impact of
miscommunication across various aspects of construction projects in Sabah, Malaysia. These
perceptions provide valuable insights into the communication challenges faced within the industry,
highlighting areas where effective communication practices are crucial to improving project
outcomes and minimizing disputes.

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Table 3: Analysis of survey results on different aspects of miscommunication.

Question Client Consultant Contractor Others

Familiarity with Effective Communication High High High Low
Frequency of Disagreements due to Low High Low Low
Miscommunication
Encounter Technical Issues due to Low Low Low Low
Miscommunication
Miscommunication Leading to Delays High High High High
Miscommunication Leading to Disputes/Conflicts High High High High

Miscommunication Leading to Increased Costs Low Low High High

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Impact on Quality of Final Deliverables High High High High

Miscommunication Leading to High High High High
Litigation/Arbitration
Impact on Project's Schedule, Scope, High Low High High
Requirements
Difficulty in Resolving Legal Disputes Low Low Low Low
Weighted Average Perception: Client - 3.932, Consultant - 3.922, Contractor - 3.994, Other -
3.886

The table reflects high awareness among clients, consultants, and contractors about the
detrimental effects of miscommunication on project timelines, quality, costs, and legal conflicts.
Notably, stakeholders generally acknowledge the heightened significance of effective
communication practices in achieving successful project outcomes. These insights underscore the
critical need for improved communication protocols within the industry to mitigate potential
disputes and enhance project efficiency. A study conducted by (Smith, Brown, & Johnson, 2020) in
the United States construction sector, stakeholders across the board acknowledged that
miscommunication significantly contributes to project delays, increased costs, and disputes.
It reveals that stakeholders generally recognize the adverse consequences of miscommunication,
with a heightened awareness of its impact on project schedules, quality, costs, and legal disputes.
These findings underscore the urgent need for enhanced communication practices and protocols
within the industry to mitigate potential issues and improve overall project efficiency.

CONCLUSION
The comprehensive analysis of communication issues within Malaysia's construction industry
underscores the critical need for effective communication protocols. These findings carry significant
implications for stakeholders, project efficiency, and the avoidance of disputes.
• Survey results represent diverse perspectives from Malaysian construction stakeholders,
highlighting the widespread consensus (99.18%) that miscommunication causes project
delays.
• Key contributing factors to communication issues include differences in work practices
(26.8%) and the lack of communication protocols (25.4%), underscoring the need for
improvement in these areas.
• Ineffectual communication's repercussions are substantial, impacting all aspects
examined, including delays (23.97%), conflicts (21.07%), increased costs (16.53%), and
even legal disputes (11.57%).

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• Stakeholders across roles acknowledge the adverse consequences of miscommunication,

emphasizing the urgency of enhancing communication practices and protocols within
Malaysia's construction industry.
All in all, fostering a culture of effective communication is not merely advantageous but
imperative for the sustainable success of construction projects in Sabah, Malaysia.

ACKNOWLEDGEMENT
I would like to express my deep appreciation to my supervisors, Ir. Ts. Dr. Habib Musa Mohamad
and Muhd Fauzy Sulaiman, for their unwavering guidance and support throughout my research. I
am also grateful to Universiti Malaysia Sabah (UMS) for their resources and mentorship.
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