This article is selected on the internet by AfiTaC because of its interest for the readers of this blog (source: out-law.com) :

 

A dispute adjudication board (DAB) aims to stop disputes over FIDIC contracts ending up in commercial arbitration.

FIDIC is the International Federation of Consulting Engineers, known by its French acronym. It was formed in 1913, with the objective of promoting the interests of consulting engineering firms globally. It is best known for its range of standard conditions of contract for the construction, plant and design industries. The FIDIC forms are the most widely used forms of contract internationally, including by the World Bank, the Asian Development Bank, and the African Development Bank for their projects.

The DAB is the first step in the dispute resolution process for these contracts, and aims to resolve disputes before they go on to more formal arbitration. If it does its job well, a DAB can help both sides to see the truth of a situation and to accept its decision, so that arbitration is no longer needed.

That’s only going to happen if the DAB has the right panel members, with the right mix of skills, experience and empathy to understand the situation, make an informed decision and communicate that well to both parties.

This guide outlines the qualities that a DAB member should have.

Each DAB will have either one member or three, nominated by the parties involved in the dispute. To do the job well, these members must have:

  • experience in the specific field being investigated;
  • legal knowledge; and
  • language fluency.

A member with significant in-field experience in the type of construction contract being discussed is going to have a much better chance of understanding the practical, commercial and technical issues involved. This will give them a better chance of understanding both parties’ positions.

A good working knowledge of the relevant contract law as it applies to construction contracts is also needed, along with the ability to understand the often complex interactions of rights and obligations, and the ability to interpret a contract. This does not mean that the panel member needs to be a lawyer, but some knowledge of the relevant laws, and the ability to assess potentially contradictory interpretations of law, will lead to better decisions being made.

Language fluency is also essential, as the role will involve reading and analysing large quantities of information, including detailed contractual provisions, project records, plus written and oral submissions from the parties, witnesses, and legal authorities. An understanding of contractual language and of DAB proceedings is also needed.

Experience in resolving disputes in the industry is also useful, including familiarity with recognised techniques of dispute resolution.

Behaviour of members

A member of a DAB has to act fairly and impartially if the process is to work successfully. They can’t act as an advocate for, or represent, the party that nominated them, and parties should make sure that they nominate truly independent experts to the DAB.

Members are expected to disclose any facts or circumstances that might affect their independence or impartiality, and any conflicts of interest. In particular, they must not advise the parties or their employees on the contract.

Each party should be given a reasonable chance to put their case, and to respond to the other party’s case, and members must not express their opinions on the merits of either party’s argument.

Reasoned decisions

After considering the case the DAB has to present the parties with a well-organised, reasoned decision showing that all applicable rules and procedures have been followed. This should guide the parties through the legal principles involved, and explain all grounds for the final decision.

Well-argued decisions with rational explanations can speed the resolution of a claim, persuading both parties that the DAB has considered all aspects and come to a sensible conclusion.

The better and more convincing the reasons given, the more likely it is that parties will accept the decision and avoid going forward to arbitration. The DAB’s decision should make the strength of the winning party’s case clear to both parties.  If a member of a three-member DAB does not agree with the conclusions of the other two members then that member can be invited to publish a minority report. This prevents confusing or inconsistent decisions, or long deliberations to reach agreement.

Binding decision

The DAB’s decision is binding on both parties, and final if neither party submits a ‘notice of dissatisfaction’ within 28 days.

If the DAB members are experienced, fair, logical and independently-minded, and explain their (or the majority’s) decision well, they stand a better chance of instilling confidence that the dispute has properly considered and that the decision is fair and acceptable.

The original article can be found at this location: https://www.out-law.com/en/topics/dispute-resolution-and-litigation/arbitration-and-international-arbitration/what-to-expect-from-your-fidic-dispute-adjudication-board-members/

We can also recommend you the attached presentation by FIDIC:

PresentationCSeppFIDICandDisputeAdjudicationBoards


Jan Bouckaert

Jan Bouckaert has more than 20 years of worldwide experience in negotiation of complex construction, renewable energy, power and infrastructure projects. He is also specialized in contract management, risk management and alternative dispute resolution. During Jan’s career path, he lived in France, Belgium, Egypt, India and Portugal and worked for GE Renewable Energy, Alstom Hydro, Besix/Six Construct. He is a Civil Engineer from the University of Leuven (Belgium) and has an MBA from ISEG (Portugal). He speaks fluently English, French, Portuguese and Dutch. Jan is the founder of AfiTaC, a company giving advice on international tenders and contracts. Be welcome to connect on LinkedIn: https://www.linkedin.com/in/afitac/

9 Comments

Basil Perera · 30 April 2018 at 17 h 59 min

Very interesting and informative article, providing details useful for those dealing with construction claims.

Christian Olele · 8 May 2018 at 9 h 12 min

Thank you for sharing this information. I wrote a paper on Adjudication and I can see you made more clarification on some of the examples in my paper.

Reinhard Boehmer · 24 May 2018 at 12 h 46 min

Good article. Just to add on; when giving such reasons, in order to convince the parties, it is good practice to consider the facts and the law (including case law). Such case law should be presented to both parties for them to make a representation and give consent, if not, the DAB may be seen to have made the case for the party which will have the upper hand if such case law directs the course of the decision made by the DAB.

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