The use of Dispute Boards is a highly successful and cost effective contractual process for the avoidance and resolution of disputes during the course of the construction project. Dispute Boards have a proven record of resolving disputes without recourse to time consuming and costly arbitration or litigation. They are in widespread international use; particularly on infrastructure projects, and continue to grow in popularity. The World Bank, Multilateral Development Banks (MDBs), FIDIC and the International Chamber of Commerce (ICC) all now advocate the use of Dispute Boards. The establishment of Dispute Boards is also now included as one of the five Golden Principles that FIDIC deems to be the fundamental and sacrosanct features of a FIDIC Contract.
The two most popular types of Dispute Boards are:
Dispute Review Board (DRB) … largely used in the USA, and issues a non-binding recommendation for any referred dispute. The Parties may comply with the recommendation voluntarily. Alternatively, the recommendation may become final and binding if neither Party raises an objection within a stated period.
Dispute Adjudication Board (DAB) … this type of Board is adopted by the 1999 and 2017 FIDIC Contract Conditions and the various MDB Harmonised Editions. It issues a binding decision on the dispute which must be promptly complied with by the Parties; albeit the dispute can be subsequently referred to arbitration if a timely Notice of Dissatisfaction is issued by one (or both) of the Parties. The DAB decision becomes final and binding if neither Party issues a Notice of Dissatisfaction within the period stated in the Contract.
In the 2017 editions of the FIDIC Conditions, the DAB has been re-named to the Dispute Avoidance and Adjudication Board (DAAB), which better reflects the functions performed.
A third type of Dispute Board, rarely used, is the Combined Dispute Board (CDB) which is an alternative option if the ICC Dispute Board Rules are adopted. The CDB normally issues a recommendation on the referred dispute, but may issue a decision if a Party so requests and the other Party does not object.
Typically Dispute Boards comprise 1 or 3 independent, impartial and experienced construction professionals. The Dispute Board can either be for the full duration of the project, or set up specifically to deal with an ‘adhoc’ dispute as and when it arises. The latest editions of FIDIC Contracts stipulate the use of 'standing' full-term Boards, and this move towards 'standing' Boards is also now endorsed by the vast majority of the main funding banks.
If you are looking to select a qualified and experienced Dispute Board member for any infrastructure projects, then Nigel Grout is available for appointments worldwide. Nigel is included on the FIDIC President’s List of Approved Dispute Adjudicators and regularly sits as a Dispute Board member, including acting as Chairman or Sole Member DB.
Do you need a Dispute Board Member? Then please complete the form below and I will contact you to discuss your requirements.
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