The aim of every construction project stakeholder is the completion of a project that meets thernobjectives of time, cost and quality. However, the construction process is often fraught withrndisputes over the interpretation of construction documents, existing conditions, the legitimacyrnof variations, timely payments, etc. The emerging Alternative Dispute Resolution (ADR)rnmethods which are non-litigation alternatives offer opportunities for effectively resolvingrndisputes in the construction industry. Depending on the nature of the relationship between thernparties involved in the disputes and the circumstances under which the dispute is evolved,rndifferent methods of dispute resolution mechanism may be preferable. This research reviewsrnalternative dispute resolution methods in construction industry with an assessment of thernEthiopian situation. It provides insights into decisions making on appropriateness of disputernresolution method that suit their needs.rnThese days both public and privately owned construction projects are increasing through outrnthe country. The industry must change its treatment of conflicts, claims and disputes. Timernshould be used for works instead of wasting time for unnecessary litigation, and out-of-courtrndispute resolution methods need to be developed in the processing of constructionrnmanagement and project contract administration.rnThe Ethiopian civil codes that deal with contract in general and construction contract inrnparticular are reviewed in this thesis. Construction of public works made by the Statutory orrnother administrative authorities that is governed by administrative contract as stated in civilrncode is also considered in the research.rnCompromise and Arbitral Submission proceedings are addressed in the civil code with duernprocedure for detail implementation. The legal application of conciliation and arbitrationrnrelevant to public works and administrative contract, are examined in the research. Thernarbitrability of administrative contracts has controversial implications on the civil procedurerncode article 315 sub articles (2) and (4).