1. Gordon L. Jaynes glj4law@aol.com
A DAM GOOD THING
Gordon L. Jaynes
Copyright 2008

2. “The world requires at least ten years to understand a new idea
“The world requires at least ten years to understand a new idea.” Sir Ronald Ross
Copyright 2008

3. El Cajon, Honduras – "A Dam Good Thing"

4. Standard Bidding Document
“Procurement of Works and User’s Guide”
“MDB Harmonised Conditions for Construction”
Copyright 2008

5. What is a Dispute Board? Clause 20, MDB Harmonised Conditions
Dispute prevention
Dispute decision
One person/three persons
Copyright 2008

6. Who can Serve?
“Professionals experienced in the type of construction involved and with the interpretation of contractual documents.”
“Fluent in the language for communication defined in the Contract”
Must undertake to abide by (and be liable for failure to observe) various commitments made in the Agreement of service.
Copyright 2008

7. How are the members selected?
Each Party nominates one for approval by the other Party
The two so chosen nominate Chair for approval by the Parties
A “default” provision is included
Replacement and termination
Copyright 2008

8. How does the DB operate? Site Visits
At or near start of construction and thereafter at intervals of not more than 140 days;
Accompanied by Parties & Engineer on “tour” of site;
Informal discussion of progress of the Works and any impending problems or disagreements;
Report of visit delivered before departure from site.
Copyright 2008

9. How does the DB operate? Other
DB is “to endeavor to prevent potential problems or claims becoming disputes.”
Includes working with Engineer
Can be summoned on short notice for critical events during construction (28 days notice)
Between site visits, receives Monthly Progress Reports, including Variations, Claims, and Programme Changes.
Copyright 2008

10. How does the DB process a dispute which is referred to it?
Engineer makes a determination on any claim and either Party, if in disagreement, can refer to the dispute to the DB.
Procedural Rules:
Annex contains less than one page of procedures.
DB has great latitude, but must act --
“fairly and impartially between the Parties” and
“adopt procedures suitable to the dispute, avoiding unnecessary delay or expense.”
Copyright 2008

11. How does the DB process a dispute which is referred to it?
Written submissions
Hearing:
Informal compared to arbitral hearings
Presentations by persons directly involved in the day-to-day construction of the Works
Can work on “documents only”
Copyright 2008

12. How does the DB process a dispute which is referred to it?
DB will seek unanimity, but if unsuccessful, decision is by majority
Majority may require dissenting opinion to be produced
Decisions are to be reasoned and to be in writing
Decisions are immediately binding, unless and until revised in an amicable settlement or by arbitration
Copyright 2008

13. What are the steps to obtain such revision?
Must give notice of dissatisfaction within 28 days of receipt
Must engage in amicable settlement efforts for a minimum of 56 days
After the minimum of 56 days of amicable settlement efforts either Party can commence arbitration
Copyright 2008

14. Why do MDBs favour DBs?
Some $90 billion of construction disputes have been resolved amicably by use of DBs
Most resolved by the time construction is complete
Cost is much less than arbitration or litigation (0.05% to 0.24% of final Contract Price; average 0.15%)
Copyright 2008

15. How are DBs paid? Monthly Retainer fee for: Daily fee for:
Being available on short notice
Becoming and remaining familiar with the Contract
Indirect costs
All other matters not covered by the daily fee
Daily fee for:
Site visits including maximum of 2 days of travel time in each direction
Hearings (if not during Site visit)
Studying written submissions on a dispute
Private meetings of DB to reach decisions
Reimbursement of costs.
Copyright 2008

16. What problems with DBs have arisen on MDB financed Contracts?
Lack of training of borrowers/aid recipients
False “economies”:
Defer establishment of DB
Reduce frequency of Site visits
Eliminate monthly retainer fee
Reduce daily fee
Copyright 2008

17. El Cajon, Honduras – "A Dam Good Thing"