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Dispute Resolution Process from DAAB to Arbitration under 2017 FIDIC Contracts
2025-06-08 10:26:35
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Dispute Resolution Process from DAAB to Arbitration under 2017
FIDIC Contracts
“Timely resolution of disputes has
significant importance on the performance of the Construction Projects.”
Clause 21 in the 2017
Editions of the Red, Yellow and Silver Books defines and
describes the dispute resolution procedure ranging from Dispute
Avoidance/Adjudication Board (DAAB) to Arbitration.
The Stages from DAAB to Arbitration
1. Constitution of the DAAB
1.1 Selecting the Members of the
DAAB
ü
The
suitably qualified sole member or three members for the DAAB shall be selected
from the list in the Contract Data.
ü
In
case of DAAB’s comprising three members, each party selects one member for the
agreement of the other Party and both Parties consult for the third one for the
chairperson position.
ü
The
member(s) shall be appointed within the time period stated in the Contract Data
(if not stated 28 days after the date the Contractor receives the Letter of
Acceptance).
1.2 Signing the DAAB Agreement
ü
The
DAAB is to be deemed to be constituted when the Parties and the sole member/the
three members have signed the DAAB Agreement
2. DAAB’s Decision Regarding the
Dispute
The Dispute may be referred to the
DAAB for its decision.
2.1 Referring to a Dispute to the
DAAB
The Reference of a Dispute to the
DAAB (the “reference” in this Sub-Clause 21.4) shall
a.
If
Sub-Clause 3.7 [Agreement or Determination] applied to the subject matter of
the Dispute, be made within 42 days of giving or receiving (as the case may be)
a NOD uınder Sub-Clause 3.7.5 [Dissatisfaction with Engineer’s Determination].
If the Dispute is not referred to the DAAB within this period of 42 days, such
NOD shall be deemed to have lapsed and no longer be valid.
b.
State
that it is given under this Sub-Clause.
c.
Set
out the referring Party’s case relating to the Dispute.
d.
Be
in writing, with copies to the other Party and the Engineer; and
e.
For
a DAAB of three persons, be deemed to have been received by the DAAB on the
date it is received by the chairperson of the DAAB.
2.2 Decision of the DAAB
ü
The
DAAB is to decide within 84 days after receiving the reference (if not any
other period proposed by the DAAB and agreed by the Parties).
ü
The
DAAB’s decision is to be given in writing to both Parties with a copy to the
Engineer.
ü
The
decision is to be binding on both Parties and the Employer is to be responsible
for the issue of Engineer’s compliance with the DAAB’s decision.
3
Notice of Dissatisfaction – NOD
3.1 Dissatisfaction with DAAB’s
Decision
The Party which is dissatisfied
with the DAAB’s decision
ü
may
give a Notice of Dissatisfaction (NOD)
to the other Party, with a copy to the DAAB and to the Engineer,
ü
is
to state that it is a Notice of Dissatisfaction with the DAAB’s Decision and
present the matter in Dispute, the reason(s) for dissatisfaction in the NOD.
ü
is
to give the NOD within 28 days after receiving the DAAB’s decision.
3.2
DAAB fails to Give a Decision
ü
In
case of DAAB’s failing to give its decision within the required time limits
stated in Sub-Clause 21.4.3 [The DAAB’s Decision].
ü
Within
28 days after the expiration of time limits, any Party may give a NOD to the
other.
4
Amicable Settlement
ü
Both
Parties are to try to settle the Dispute amicably after the Notice of
Dissatisfaction given under Sub-Clause 21.4 [Obtaining DAAB’s Decision].
ü
Unless
otherwise agreed by both Parties;
ü
In
case of not achieving amicable settlement, the commencement of arbitration is
to be on or after the twenty-eighth (28th) day after the day of the NOD given.
5
Failure to Comply with DAAB’s Decision
ü
In
case of any Party’s failing to comply with the decision of the DAAB;
ü
The
other Party may refer the failure straight to arbitration under Sub-Clause 21.6
[Arbitration]
6
No DAAB in Place
If there is no DAAB in place.
ü
The
Dispute may be referred by any Party straight to arbitration under Sub-Clause
21.6 [Arbitration].
7
Arbitration
Any Dispute in respect of which the
DAAB’s decision (if any) has not become final and binding shall be finally
settled by International Arbitration. Unless otherwise agreed by both Parties:
(a) The Dispute shall be finally
settled under the Rules of Arbitration of the International Chamber of Commerce.
(b) The Dispute shall be settled by
one or three arbitrators appointed in accordance with these Rules; and
(c) The arbitration shall be
conducted in the ruling language defined in Sub-Clause 1.4 [Law and Language].
Arbitration may be conducted.
ü
Before
and after the completion of the Works.
ü
And
the obligations of the Parties, the Engineer and the DAAB, shall not be
altered.
ü
In
case of any payment by one Party to the other.
ü
without
any further Notice or Certification, the amount is to be payable.
FOOTNOTES
1. The same Sub-Paragraph letters
are used as in Sub-Clause 21.4 [Obtaining DAAB’s Decision] of the 2017 FIDIC
Editions.
2. Subject to Sub-Clause 3.7.5
[Dissatisfaction with Engineer’s Determination], Sub-Clause 21.4.4
[Dissatisfaction with DAAB’s Decision], Sub-Clause 21.7 [Failure to Comply with
DAAB’s Decision] and Sub-Clause 21.8 [No DAAB in Place].
3. The same Sub-Paragraph letters
are used in Sub-Clause 21.6 [Arbitration] of the 2017 FIDIC Editions.
