2. What is a Dispute Board?
A Dispute Board is composed of 1 or 3 neutral individuals who help the Parties avoid disputes or resolve disputes.
If necessary, it can adjudicate the dispute.
It does so, in real time, during the life of the project.

3. Forms of Dispute Board
Dispute Boards were born in the USA where they only gave recommendations for resolving disputes – DRB
In the 1990’s FIDIC began using the system but with adjudication as well as recommendations - DAB

4. Forms of Dispute Board
In 2005, the Multilateral Development Banks published the “Pink Book” which modified the name to reduce the emphasis on adjudication – DB
In 2017, FIDIC published new editions of its Red, Yellow & Silver Books and gave equal emphasis to dispute avoidance and dispute adjudication - DAAB

5. Are there any other types?
Ad hoc
Only set up after dispute arises
Jurisdiction ends after decision issued
Standing
Set up at start of project
Visits the project frequently
Jurisdiction ends at the end of the guarantee period

6. How is DB appointed? Each party suggests the name of a member.
Once the two members are appointed, they suggest the name of the Chairperson.
If agreement not possible, either party applies to an appointing authority named in the contract.

7. The DB Agreement
After the members are selected, the parties sign an agreement with each member.
FIDIC Contracts contain General Conditions for this agreement and a set of procedural rules.
They also propose a form of agreement, which includes modifications to General Conditions.

8. How does the DB function?
Keeps up to date with developments
Make regular Site Visits
Concentrates on Dispute Avoidance
Makes binding Decisions when necessary, which can become final.

9. Keeping up to date
The parties send the DB copies of all important correspondence: monthly reports, Statements, Interim Payment Certificates, Claims, Variations, significant letters, etc.
DB is paid a monthly retainer to read these and prepare for Site Visits.

10. Site Visits
Site Visits take place every 3 to 4 months and at critical times or when one party requests.
Usually last 2 days.
DB meets Employer, Contractor & Engineer together to hear about progress, current issues and concerns.

11. Site Visits DB visits Works with the Parties, then discussion resumes.
DB produces a report before leaving site.
DB tries to maintain good communications between the parties and positive problem solving approach.

12. Dispute Avoidance
During Site visits and at any other time, parties can jointly request a non-binding opinion from DB.
DB offers to give, even if parties do not request.
Sometimes, simply reading the contract together solves the problem.

13. Dispute Avoidance
DB uses mediation techniques such as active listening, rephrasing, etc.
FIDIC 2017 allows private meetings between DB and one party if other party agrees – not popular with DB members.

14. Dispute Adjudication Process begins with a Referral from either party.
From date of receipt DB has 84 days to render a reasoned decision.
Within 84 days, parties may require two exchanges of written arguments & a hearing may be necessary.

15. Dispute Adjudication DB has inquisitorial powers.
It also has power to order provisional relief or conservatory measures.
It must respect the rules of natural justice.
Decision is binding.

16. Post Decision After receipt of decision parties must comply.
A Notice of Dissatisfaction may be sent within 28 days, otherwise the decision becomes final and binding.
After a Notice of Dissatisfaction, there is a period for attempting amicable settlement.

17. Post Decision
If no settlement is reached, either Party can commence arbitration.
Arbitration can be commenced immediately (without the need to attempt settlement) to enforce compliance.

18. Is the process effective?
Statistics gathered by DRBF show:
When active dispute avoidance is practiced by a standing DB, only 0.5% of issues go to arbitration.
When an ad hoc DB is used, 15% of issues go to arbitration.
Only 1.5% of decisions are overturned by arbitral tribunal.

19. Is the process effective?
Projects with DBs are completed for 4% less money; and
Are completed in 16% less time = 6 months on a 3 year project.

20. Why then, are DBs not used more?
At project start-up, parties believe/hope that there will be no disputes.
Parties wish to avoid cost, which they see as substantial compared to their own salaries.

21. Why then, are DBs not used more?
Parties have not budgeted for cost.
Employers do not have a system for appointing DB member/cannot decide.
Limited pool of potential DB members.

22. Thank You! Geoff Smith gsmith@ps-consulting.fr www.ps-consulting.fr