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PRACTICE NOTES
This Practice Note examines dispute board decisions in international construction contracts. It considers the requirements for a valid decision, including form, reasoning, unanimity, timing and delivery, as well as the consequences of late decisions and the role of notices of dissatisfaction. It analyses the binding status of decisions and the consequences of non-compliance, including potential termination rights. It also considers mechanisms for correction and interpretation, the principal routes to enforcement (whether by court proceedings or arbitral awards), and the grounds on which enforcement may be challenged or resisted. It includes a comparative overview of key frameworks, including FIDIC Dispute Adjudication Boards (DAB) and Dispute Avoidance and Adjudication Boards (DAAB), the ICC Dispute Board Rules, the CIArb Dispute Board Rules, the AAA-ICDR Dispute Avoidance and Resolution Board (DARB) Specifications and the Singapore Infrastructure Dispute-Management Protocol. For a practical checklist which provides an end-to-end guide to considerations when advising on contracts which provide for dispute boards which issue binding decisions, see Practice Note: Dispute boards—practical considerations checklist. This checklist can be read alongside this Practice Note, when
PRECEDENTS
Agreement in relation to the termination and replacement of [dispute board member name] (Dispute Board member) on the [insert brief details of the project]. This Agreement is made on the [insert number] day of [insert month] 20[insert year]. Parties 1 [insert name of the Contractor] (company registration number [insert number]) whose registered office is situated at [insert address of the Contractor] (‘the Contractor’) 2 [insert name of the Employer] (company registration number [insert number]) whose registered office is situated at [insert address of the Employer] (‘the Employer’) The Employer and Contractor are together the ‘Contract Parties’. 3 [[insert name of the Departing DB Member] whose address is [insert address of the Departing DB Member] (‘the Departing DB Member’) The Contract Parties and the Departing DB Member are together the ‘Parties’.] BACKGROUND The Employer and the Contractor are the parties to a contract dated [date] for [brief description of project] (the Contract). The Contract provides for the establishment and operation of a dispute board (the Dispute Board) under [insert relevant contractual provisions] [and in accordance with [identify applicable dispute board rules] (the Applicable
PRECEDENTS
_______________________________________ [NAME OF PROJECT] NOTICE OF ISSUE WITH [DAB member name] (DAB MEMBER) [Date] _______________________________________ Notifying Party: [Name of Party 1] [Address] [Telephone/Fax Number] [Email address] [ON THE HEADED NOTEPAPER OF THE NOTIFYING PARTY] The Other Party: [Name of Party 2] [Address] [Telephone/Fax Number] [Email address] [[The Engineer/Employer’s Representative] [Address] [Telephone/Fax Number] [Email address]] The Dispute Adjudication Board: [Name of DAB member] [Address] [Telephone/Fax Number] [Email address] [ [Name of DAB Member 2] [Address] [Telephone/Fax Number] [Email address] [Name of DAB Member 3] [Address] [Telephone/Fax Number] [Email address]] [NAME OF PROJECT]: issue concerning
PRECEDENTS
_______________________________________ [NAME OF PROJECT] DAAB Member ICC CHALLENGE CONCERNING [DAAB Member name] [Date] _______________________________________ Challenging Party: [Name of Party 1] [Address] [Telephone/Fax Number] [Email address] [ON THE HEADED NOTEPAPER OF THE CHALLENGING PARTY] ICC International Centre for ADR: [Address] [Telephone/Fax Number] [Email address: disputeboards@iccwbo.org] The Dispute Avoidance/Adjudication Board: [Name of DAAB Member] [Address] [Telephone/Fax Number] [Email address] [[Name of DAAB Member 2] [Address] [Telephone/Fax Number] [Email address] [Name of DAAB Member 3] [Address] [Telephone/Fax Number] [Email address]] Other Party: [Name of Party 2] [Address] [Telephone/Fax Number] [Email address] [[The Engineer/Employer’s Representative] [Address] [Telephone/Fax Number] [Email
PRECEDENTS
_______________________________________ [NAME OF PROJECT] NOTIFICATION OF DAAB member objection CONCERNING [DAAB member name] [Date] _______________________________________ Objecting Party: [Name of Party 1] [Address] [Telephone/Fax Number] [Email address] [ON THE HEADED NOTEPAPER OF THE OBJECTING PARTY] The Other Party: [Name of Party 2] [Address] [Telephone/Fax Number] [Email address] The relevant Dispute Avoidance/Adjudication Board member: [Name of DAAB member] [Address] [Telephone/Fax Number] [Email address] The other Dispute Avoidance/Adjudication Board members: [[Name of DAAB Member 2] [Address] [Telephone/Fax Number] [Email address] [Name of DAAB Member 3] [Address] [Telephone/Fax Number] [Email address]] [[The Engineer/Employer’s Representative] [Address] [Telephone/Fax Number] [Email address]] [NAME
PRECEDENTS
_______________________________________ [NAME OF PROJECT] icc DISPUTE BOARD member CHALLENGE CONCERNING [DISPUTE BOARD MEMBER NAME] [Date] _______________________________________ Challenging Party: [Name of Party 1] [Address] [Telephone/Fax Number] [Email address] [ON THE HEADED NOTEPAPER OF THE CHALLENGING PARTY] ICC International Centre for ADR: [Address] [Telephone/Fax Number] [Email address: disputeboards@iccwbo.org] The Dispute Board: [Name of DB member] [Address] [Telephone/Fax Number] [Email address] [ [Name of DB Member 2] [Address] [Telephone/Fax Number] [Email address] [Name of DB Member 3] [Address] [Telephone/Fax Number] [Email address]] Other Party: [Name of Party 2] [Address] [Telephone/Fax Number] [Email address] [[The Engineer / Employer’s Representative] [Address] [Telephone/Fax
PRECEDENTS
Agreement relating to [insert project]. This Agreement is made on the [insert number] day of [insert month] 20[insert year]. Parties 1 [insert name of the Employer/Owner/Principal] a [company OR public authority OR entity] [incorporated OR established] under the laws of [jurisdiction] with a registered office at [insert address of the Employer] (the ‘Employer’) 2 each contractor identified in Schedule 1 as a contractor party to a Participating Contract and as a party to this Agreement on the date of this Agreement, and each contractor that subsequently becomes a party to this Agreement in accordance with clause 4 (each a Participating Contractor) 3 each person identified in Schedule 2 as a Board Member and each person who subsequently becomes a Board Member and a Party in accordance with clause 5 (each a Board Member and together the Board Members) The Employer and the Participating Contractors are together the Project Parties. The Project Parties and the Board Members are together the Parties. BACKGROUND The Project is being delivered through the separate contracts identified in Schedule 1 and may include further contracts that become Participating
FLOWCHARTS
Under the CIArb Dispute Board Rules, a party may apply for the removal of a dispute board (DB) where there a conflict of interest or a failure to comply with the Tripartite Agreement (this is the appointment and services agreement between the parties
PRACTICE NOTES
Deciding on the use of a dispute board as part of the dispute resolution procedure in a construction contract is only the first step. Once the concept of the dispute board has been agreed, the practical issues of who should sit on the dispute board, how they should be appointed and how the board should work need to be dealt with. This Practice Note deals with the selection and appointment of the dispute board members, and how they should operate once appointed. Characteristics of good dispute board members The first question that the parties should deal with is who should sit on the dispute board. Most contracts call for dispute boards with three members, although some may give the option of having a board with only a single member. The FIDIC forms of contract are an example of this—they provide for a three-member dispute board as the default, but allow the parties to opt for a single member board. There is clearly a costs saving in having only one person on the board, although a three-member
FLOWCHARTS
Under the ICC Dispute Board Rules, a dispute board (DB) member may be challenged where there is an alleged lack of independence or impartiality or otherwise pursuant to Article 8(4) of the Rules. There is a structured process for challenge and time limits apply. For a Precedent challenge to the ICC, see: Dispute boards—ICC
PRACTICE NOTES
This Practice Note considers when and how an individual dispute board (DB) member may be challenged, removed or replaced under the principal international construction DB frameworks: FIDIC 1999 and 2017, the ICC Dispute Board Rules, the CIArb Dispute Board Rules and the AAA-ICDR Dispute Avoidance and Resolution Board Procedures. It addresses independence, impartiality, disclosure, lack of agreed qualifications, defective constitution, procedural irregularity, misconduct, non-performance, incapacity, unavailability, resignation, death, consensual termination and replacement. It also considers time limits, waiver, continuity while a challenge or vacancy is pending, the consequences of successful and unsuccessful challenges, and the significance of member-level objections in later arbitration, court or enforcement proceedings. This Practice Note does not address substantive challenges to the merits of DB decisions, except where member-level objections may affect the enforceability or later treatment of a DB decision. For more on DB decisions, see Practice Note: Dispute board decisions: validity, enforcement and challenge. References in this Practice Note to FIDIC 2017 are to the FIDIC 2017 Red, Yellow and Silver Books as amended and reprinted
PRECEDENTS
_______________________________________ [NAME OF PROJECT] [Defective appointment OR MANDATORY QUALIFICATIONS OR DISPUTE BOARD COMPOSITION] OBJECTION CONCERNING [THE DISPUTE BOARD OR [DB member name] (dispute board member)] [Date] _______________________________________ Objecting Party: [Name of Party 1] [Address] [Telephone/Fax Number] [Email address] [ON THE HEADED NOTEPAPER OF THE OBJECTING PARTY] The Other Party: [Name of Party 2] [Address] [Telephone/Fax Number] [Email address] The Dispute Board member: [Name of DB member] [Address] [Telephone/Fax Number] [Email address] The other Dispute Board members: [ [Name of DB Member 2] [Address] [Telephone/Fax Number] [Email address] [Name of DB Member 3] [Address] [Telephone/Fax Number] [Email address]] [[The Engineer/Employer’s Representative] [Address] [Telephone/Fax Number] [Email address]] [ [Relevant institution]: ] [[Institution name] [address]] [[telephone]] [[email address]] [NAME OF PROJECT]: [Defective appointment OR Mandatory qualifications OR Dispute Board Composition] objection in relation to [[DB member name] (Dispute Board member) OR the Dispute Board] We refer to the contract between the Objecting Party and the Other Party for [brief description of project] dated [date] (the Contract), which provides for the use of a dispute board (the Dispute Board). [The Contract incorporates the [relevant institutional dispute board rules] (the Applicable Rules)] [The Parties have agreed to use the [relevant institutional dispute board rules and details of where the parties