FIDIC 1999 cons clause 20.

7
when one party fail to implement a'binding" and "Final "decision,why it should not be considered as breech of contractual provisions instead of other party going to arbitration?
5 days ago

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Abbas Jaffery, Amir Attia and 2 others like this

7 comments

Follow kifle

kifle semu it is only the failure itself that will be referred to arbitration
4 days ago Like

Follow liaqat

liaqat hayat All I am trying to say is why we have to follow a time taking process through Arbitration instead of taking it as breach of contract by the party concerned. The failure itself is an indication of failure to perform one's obligation.
4 days ago Like

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Follow Asel

Asel El Housan Dear Liaqat, It is a very valid question, but how you will deal with such failure, this is why you are going to Arbitration. But is it an appealing arbitration or a full arbitration, this is left open and should be studied carefully. The other issue in Clause 20.7, it is not considering the case of having the DAB decision not final, but binding; what will happen in this case? this case should be also addressed.
4 days ago Like

Follow Mohammed

Mohammed Azad Hossain Asel's explanation has merit. One or both party not agreed on DAB's decision though it is binding. Where to go? Consider that it is breech of contract, then what you will do. Settle amicably? No way, you should go to Arbitration.
3 days ago Like

Follow tony

tony mackenzie Hi My edition of FIDIC 1999 does not have a clause 20.07? clause 20.06 is the the referral to arbitration clause.
3 days ago Like

Follow Asel

Asel El Housan Dears, I like this discussion and would like to thank Mr. Liaqat for opening this hot topic, If we want to discuss Clause 20.7, we should think widely and understand its implications, Allow me to differentiate between two cases; 1. When the DABs decision became final and binding under Clause 20.4, and a Party failed to comply with it, then Clause 20.7 will become applicable and the other Party will refer the failure to arbitration. But, Clause 20.6 is not dealing with it, Clause 20.6 is tackling the case when the DABs decision has not become final and binding. I believe a separate Clause of arbitration should be added as an appealing arbitration to get the DABs decision awarded with its failure and can be recognized in the applicable courts. This appealing arbitration role is not cited within the FIDIC and should be checked against the applicable Law. 2. If the DABs decision didnt become final; however it is still binding till it is revised by an amicable settlement or an arbitration award. If a party failed to comply with it, what the arbitrators can do, are they going to issue an interim award of such decision till finishing the arbitration procedure and issuing the final award? Does the applicable Law allowing for such interim award? What if such decision dramatically changed in the final award? All of these issues should be studied and addressed carefully. A final note, once thinking about amending Clause 20.7, we should all the time remember the arbitration Clause and the applicable Law and see how it is going to affect and be affected by any amendment.
3 days ago Like

Follow Jerry

Jerry Nulun FIDIC 1999 cons clause 20.7 - My Opinion Those who are engaged in international project contracting will no doubt be familiar with the FIDIC forms of contracts and the requirement therein for disputes to be referred to a Dispute Adjudication Board ("DAB"), this a typical contractual nightmares plaguing the industry. In my view whether it is final or binding or merely binding going to arbitration is a matter of course as provided for in the wordings of Clauses (where a party did not comply with DAB decisions). In other words arbitration is a mean of enforcement of DAB decisions and not necessary an end to the mean. Clauses 26 and 27 could be easily and erroneously be conflated where their objectives and purpose be clearly understood. Whether a DAB decision should be enforced by means of arbitration under Clause 20.6 or Clause 20.7 will depend on whether a valid NOD (Notice of Dissatisfaction) has been submitted and consequently, whether the DAB decision is final and binding (i.e no NOD submitted) or merely binding (i.e there is a valid NOD submitted). In a recently decided case in Singapore 2010, distinction between an arbitration contemplated under Clause 20.6 and one contemplated under Clause 20.7, are crystallized as follows: Clause 20.7 - is confined to that narrow category of cases where a DAB decision had become "final and binding" meaning that neither party had submitted an NOD after the receipt of the DAB decision and the unsuccessful party had failed to comply with that decision - and such a "final and binding" decision is sought to be enforced against the non-complying party by means of arbitration. This provision does not involve an enquiry into the merits of the DAB decision. In my humble opinion, there is a "lacuna" in that Clause 20.7 it does not confer any right on a successful party to bring an arbitration against an non-complying party for a DAB decision that is merely "binding" (as opposed to "final and binding"); and Clause 20.6 - On the other hand, Clause 20.6 sets out the procedure for parties to bring a "fresh" arbitration which will be decided on the merits. An arbitration under Clause 20.6 will have to be referred to a DAB in the first instance for its decision. A note on Clause 20.4 - the clause provide for mediation and conciliation, it facilitate and act as catalyst for disputing parties to reach a resolution. However, mediation has little chance of success unless the parties wish to mediate and have a considerable degree of mutual trust in each other's integrity and willingness to resolve the dispute. Apart from this, main disadvantage of mediation is that the views of the and any conclusions made by the mediator are not enforceable unless of course the disputing parties agreed to the recommendations and conclusions. Often the case is the unsatisfied party will issue a NOD in respect of the decision made by the mediator, hence, comes in the issue of final and binding or is it merely binding. Way forward - To avoid the problem posed by "final and binding" requirement, the wording of Clause 20.7 (or the corresponding provisions) could be amended so as to exclude the "final and binding" requirement altogether. Maybe, all fellow readers can think of a suitable clause for this purpose. Ill write my proposed clause next... Best regards, Jerry R. NULUN Mobile: +60198142115 singaporejr@yahoo.com

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