Here we look at the benefits that might be expected from using a dispute board and some practical experiences of using dispute boards, before considering why the expected benefits may not be being realised.
The intention behind the dispute board in the FIDIC forms
Arbitration (and litigation), in the international projects and construction sector, have traditionally been regarded as costly and time consuming. There is a perception (and sometimes a reality) that contractual disputes often take almost as long to be resolved as the project itself. Recognising this, FIDIC has sought to develop its standard forms in a way that provides for and encourages early and efficient dispute resolution without recourse to arbitration or litigation.1
In the FIDIC 1999 Rainbow Suite, provisions for dispute adjudication boards (DABs) were introduced and developed as part of a three tier dispute resolution process.2 The DAB provisions were developed with the aim of providing the parties with a quick (84 days from referral to decision), inexpensive and effective method of dispute resolution, available contemporaneously during the project works. The intention was that the procedure, if used correctly, would remove, or at least limit, the need for recourse to arbitration or litigation and help the parties to maintain a good working relationship. In the 1999 Suite, the Red Book required that the DAB be appointed on a ‘standing basis’ (from an early stage in the project), in contrast to the Yellow and Silver Books, where the DAB is to be appointed on an ‘ad-hoc’ basis, when a claim has already become a dispute.