FIDIC Conditions of Contract New Edition 2017 and Dispute Boards

Dr Donald Charrett
1 Introduction
FIDIC, the International Federation of Consulting Engineers (Fédération Internationale des
Ingénieurs-Conseils) publishes the most widely used contracts for international construction
projects. They are commonly referred to as the "rainbow suite" because of the different colours
of their covers. The most commonly used contracts in the rainbow suite are the:
• Red Book: Conditions of Contract for Construction
• Yellow Book: Conditions of Contract for Plant and Design Build
• Silver Book: Conditions of Contract for EPC/Turnkey Projects.
Other forms of contract in the FIDIC rainbow suite include the Green Book (Short Form of
Contract), the Gold Book (Design, Build and Operate), the Pink Book (MDB Harmonised
version of the Red Book) and the White Book (Client-Consultant Agreement).
The earliest edition of the Red Book was published in 1957; this was followed by later editions
published in 1969, 1977, and 1987. Editions of the Yellow Book were published in 1963, 1980
and 1987. FIDIC responded to the increasing popularity of projects being procured on a design
and build or turnkey basis in 1995 by publishing the Conditions of Contract for Design/Build and
Turnkey (Orange Book). An Orange Book contract was administered by the "Employer's
Representative", who unlike the Engineer1 administering a Red Book or a Yellow Book contract
was not required to be impartial. In the absence of an "impartial" Engineer, a Dispute
Adjudication Board was introduced to determine disputes between the parties.
A supplement was published for the Red Book 4th edition in 1996 which gave an option for an
independent Dispute Adjudication Board, able to give a decision on disputes. This avoided the
perception that the Engineer who administered the Contract and was employed by the Employer
may not act independently in determining disputes, particularly in circumstances where the
dispute was over a decision made by the Engineer.
Updates of the Red, Yellow and Orange Books were published in 1999, identified as the first
editions of the Red, Yellow and Silver Books. The aim of these major revisions was to
standardise the terminology, make the documents as user-friendly as possible, and solve the
problem of the Engineer not being seen as acting impartially while he/she was employed and
paid by the Employer. Each of the 1999 editions provides for a Dispute Adjudication Board to
decide on disputes submitted to it.
This paper provides a brief overview of the provisions on Dispute Boards in the 2017 FIDIC
second editions of the Red, Yellow and Silver Books.
2 Overview of the 2017 Dispute Board provisions
The structure of the 2017 editions is generally the same as the 1999 editions, however the 2017
editions are more prescriptive and provide more detailed contract management provisions. One
result of this is that the 2017 editions are more than 50% longer than the 1999 editions.2 There
are also more time bars in the 2017 editions.
In the 1999 editions Clause 20 was titled Claim, Disputes and Arbitration. Claims and Disputes
have now been separated into two separate clauses in the 2017 editions. Clause 20 is now
Employer's and Contractor's Claims, and Clause 21 is Disputes and Arbitration. These Clauses
have been split to emphasise that Claims do not necessarily lead to Disputes (discussed further

1
Capitalised terms not defined in this paper are defined in the 2017 Second Edition Red Book, Yellow Book and
Silver Book.
2
For example, the General Conditions in the 1999 Yellow Book comprise 75 pages, whereas the General Conditions
in the 2017 Yellow Book comprise 131 pages.
18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 1
below). Claims are specifically defined as "a request or assertion by one Party to the other Party
for any entitlement or relief under any Clause of these Conditions or otherwise in connection
with, or arising out of, the Contract or the execution of the Works", whereas Disputes are defined
as a situation where a claim made by one Party is rejected by the other Party and the first party
does not acquiesce to that rejection.
Dispute Boards are an integral part of both the 1999 and 2017 editions, although the terminology
is somewhat different. In the 1999 editions the Dispute Board was called a Dispute Adjudication
Board (DAB), whereas in the 2017 additions is called a Dispute Avoidance/Adjudication Board
(DAAB). The name change is more than cosmetic, as it reflects the two important functions of
the Dispute Board – assistance in the avoidance of disputes and adjudication of disputes that
were not avoided.
The other substantive difference is that in the 1999 Yellow and Silver Books the DAB was an ad
hoc Dispute Board, whereas the DAABs in each of the 2017 editions is a standing Dispute
Board. A standing Dispute Board is established at the start of a project, and its members become
and remain familiar with the Parties, the Contract and the progress of the Works by regular visits
and reading regular project reports. Because of its familiarity with the project and the issues a
standing Dispute Board can play an important role in assisting the Parties to avoid disputes. By
contrast, an ad hoc Dispute Board is only established to adjudicate a dispute after it has arisen. In
these circumstances it is unable to play any role in dispute avoidance.
The sub-clauses in the 1999 and 2017 FIDIC contracts relating to the resolution of disputes are
as follows:

1999 Red, Yellow & Silver Books 2017 Red, Yellow & Silver Books

20.2 Appointment of the DAB 21.1 Constitution of the DAAB

20.3 Failure to Agree DAB 21.2 Failure to Appoint DAAB Member(s)

21.3 Avoidance of Disputes

20.4 Obtaining DAB’s Decision 21.4 Obtaining DAAB’s Decision

20.5 Amicable Settlement 21.5 Amicable Settlement

20.6 Arbitration 21.6 Arbitration

20.7 Failure to Comply with DAB’s Decision 21.7 Failure to Comply with DAAB’s
Decision

20.8 Expiry of DAB’s Appointment 21.8 No DAAB in Place

It can be seen that there is a specific sub-clause dealing with the avoidance of disputes in the
2017 editions (21.3), emphasising the explicit role that the DAAB has in dispute avoidance. As
noted above, the provisions of the 2017 editions are much more detailed and prescriptive than
the corresponding provisions in the 1999 editions.
Sub-clause 21.1 provides for either a one-person or a three-person DAAB as stated in the
Contract Data. The default option is for a three-person DAAB. The members are selected from
the names listed in the Contract Data. For a three-person Board, each Party selects one member
for the agreement of the other Party and the Parties consult both these members to agree the third
member who is appointed to act as chairperson. The Parties agree on the remuneration of each
DAAB member when agreeing the terms of the DAAB agreement. A member's appointment can
be terminated by mutual agreement of the Parties, but not by either Party acting alone. The
18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 2
subclause contains provisions on the replacement of a member and the expiry of the DAAB’s
term – either on the date of discharge of the Contract, or 28 days after it has given its decision on
all Disputes.
Sub-clause 21.2 contains provisions to deal with the following situations:
• if the Parties cannot agree on the appointment of a sole member;
• if a Party fails to select a member;
• if a Party fails to agree a member selected by the other Party;
• the Parties fail to agree the appointment of a replacement member; or
• one party refuses or fails to sign a DAAB Agreement.
Each of these provisions has a specific time limit. In the event that any of these situations
prevent the timely constitution of the DAAB, either or both Parties can request the appointing
entity or official named in the Contract Data to appoint the member(s) of the DAAB. The
appointment is final and conclusive and thereafter the Parties and the member(s) so appointed
shall be deemed to have signed and be bound by a DAAB Agreement. The comprehensive
provisions of this sub-clause are designed to ensure that neither party can thwart the process of
setting up the DAAB in a timely fashion and thereby prevent it from fulfilling its obligations
during the course of the Works.
Although the DAAB’s role in dispute avoidance is emphasised by sub-clause 21.3, it existed in
the 1999 Red Book within sub-clause 20.2 [Appointment of the Dispute Adjudication Board]:
If at any time the Parties so agree, they may jointly refer a matter to the DAB for it to give its opinion.
Neither Party shall consult the DAB on any matter without the agreement of the other Party.
Sub-clause 21.3 of the 2017 Books is more detailed in prescribing the DAAB’s dispute
avoidance role:
If the Parties so agree, they may jointly request (in writing, with a copy to the Engineer) the DAAB to
provide assistance and/or informally discuss and attempt to resolve any issue or disagreement that may
have arisen between them during the performance of the Contract. If the DAAB becomes aware of an issue
or disagreement, it may invite the Parties to make such a joint request.
Such joint request may be made at any time, except during the period that the Engineer is carrying out
his/her duties under Sub-Clause 3.7 [Agreement or Determination] on the matter at issue or in
disagreement unless the Parties agree otherwise.
Such informal assistance may take place during any meeting, Site visit or otherwise. However, unless the
Parties agree otherwise, both Parties shall be present at such discussions. The Parties are not bound to act
on any advice given during such informal meetings, and the DAAB shall not be bound in any future
Dispute resolution process or decision by any views or advice given during the informal assistance process,
whether provided orally or in writing.
These further details of how the DAAB can assist the parties informally are no doubt very useful
in providing more detailed guidance than in the 1999 Red Book. However, it should be noted
that a DAB under the 1999 Red Book can perform the same dispute avoidance functions that are
detailed in the 2017 Red Book.
If a dispute cannot be avoided, sub-clause 21.4 details the process of obtaining the DAAB’s
decision on a Dispute formally referred to it. These detailed provisions cover the following:
• Reference of a Dispute to the DAAB;
• The Parties' obligations after the reference;
• The DAAB’s decision; and
• Dissatisfaction with the DAAB’s decision.
There are certain formalities involved in the formal reference of a Dispute to the DAAB. If the
subject matter of the Dispute involves a determination made by the Engineer under sub-clause
18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 3
3.7 (Red Book and Yellow Book) or the Employer's Representative under sub-clause 3.5 (Silver
Book), it can only be referred to the DAAB within 42 days of giving or receiving a Notice of
Dissatisfaction (NOD) with the determination. The Parties' obligations after the reference
include providing necessary assistance to the DAAB and continuing to perform their obligations
in accordance with the Contract. The DAAB is required to complete and give its decision within
84 days after receiving the reference, unless another period is agreed by the Parties. The decision
must be reasoned and in writing, however the DAAB do not act as arbitrators.
The DAAB’s decision on a Dispute is binding on both Parties who must give immediate effect
to it, including payment of any amount by one Party to the other Party. The DAAB has the
discretion to require the payee to provide an appropriate security if there are reasonable grounds
to believe that it will be unable to repay the amount in the event that the decision is reversed in
subsequent arbitration. The DAAB it is not obliged to hand down its decision until all its
outstanding invoices have been paid.
If either party is dissatisfied with a DAAB decision (or any part of it) it may give a NOD to the
other Party within 28 days after receiving the DAAB’s decision. If the DAAB fails to give its
decision within the agreed period, either Party may issue a NOD within 28 days after the end of
the period. If no NOD is issued within the 28 days, the DAAB’s decision is final and binding.
Neither party is entitled to commence arbitration of a Dispute unless a NOD in respect of that
Dispute has been given in accordance with sub-clause 21.4.4. There is a 28-day period after the
issue of a NOD for amicable settlement (sub-clause 21.5). No particular process is mandated for
amicable settlement, and even if no attempt at amicable settlement is made, either party can
commence arbitration on or after 28 days after the day on which the NOD was given.
The provisions for arbitration in sub-clause 21.6 are more detailed than in the 1999 editions.
Arbitration is by 1 or 3 arbitrators under the Rules of Arbitration of the International Chamber of
Commerce. In an award dealing with costs of the arbitration, the arbitrator(s) may take into
account the extent to which a Party failed to cooperate in constituting the DAAB. The Parties are
not limited to the evidence or arguments they previously put before the DAAB. Any amount
awarded by the arbitrator(s) is immediately due and payable without any further certification or
Notice.
Subclause 21.7 provides the following detailed provision for failure to comply with the DAAB’s
decision:
In the event that a Party fails to comply with any decision of the DAAB, whether binding or final and
binding, then the other Party may, without prejudice to any other rights it may have, refer the failure itself
directly to arbitration under Sub-Clause 21.6 [Arbitration] in which case Sub-Clause 21.4 [Obtaining
DAAB’s Decision] and Sub-Clause 21.5 [Amicable Settlement] shall not apply to this reference. The
arbitral tribunal (constituted under Sub-Clause 21.6 [Arbitration]) shall have the power, by way of
summary or other expedited procedure, to order, whether by an interim or provisional measure or an award
(as may be appropriate under applicable law or otherwise), the enforcement of that decision.
In the case of a binding but not final decision of the DAAB, such interim or provisional measure or award
shall be subject to the express reservation that the rights of the Parties as to the merits of the Dispute are
reserved until they are resolved by an award.
Any interim or provisional measure or award enforcing a decision of the DAAB which has not been
complied with, whether such decision is binding or final and binding, may also include an order or award
of damages or other relief.
This detailed provision addresses the issue that previously arose under sub-clause 20.7 of the
1999 Red Book in the long running saga of litigation between PT Perusahaan Gas Negara
(Persero) TBK and CRW Joint Operation in the Singapore High Court and Singapore Court of
Appeal between 2010 and 2015. The issue that was not clear from the provisions of clause 20 in
the 1999 Red Book was the consequences of a Party's failure to comply with a binding DAB
decision that was not final and binding.3 The new provisions of sub-clause 21.7 make it clear that

3
See: D Charrett, The Application of Contracts in Engineering and Construction Contracts (2018) 265 – 269.
18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 4
a party can seek an arbitration award confined to the other Party's failure to comply with a
DAAB decision; that interim or provisional measure or award will not deal with the merits of the
Dispute determined by the DAAB. A final award dealing with the merits of the Dispute may
overturn the DAAB decision.
Sub-clause 21.8 provides that if there is no DAAB in place or no DAAB is being constituted,
whether by reason of the expiry of the DAAB’s appointment or otherwise, the dispute may be
referred directly to arbitration under sub-clause 21.6 and sub-clause 21.5 [Amicable Settlement]
shall not apply. It is not entirely clear whether the absence of a DAAB in place because the
parties had not engaged the contractual machinery to constitute it would enable a Party to initiate
arbitration without a DAAB decision under this sub-clause. There are reported judgements in
England and Switzerland and reported arbitration cases that generally conclude that it is
mandatory to refer disputes to a Dispute Board prior to arbitration.4
3 Dispute Avoidance/Adjudication Agreement
Each member of the DAAB must enter into a tripartite agreement between the Employer, the
Contractor and the DAAB member. A pro forma DAA Agreement is at the back of each of the
2017 Books. The conditions of the DAA Agreement comprise
• Clause 21 [Disputes and Arbitration] of the Conditions of Contract, and any other
provisions of the Contract that are applicable to the DAAB’s Activities;
• The General Conditions of Dispute Avoidance/Adjudication Agreement.
3.1 General Conditions of Dispute Avoidance/Adjudication Agreement
The following table compares the General Conditions of the Dispute Avoidance/Adjudication
Agreement in the 1999 Red Book and in the 2017 Red, Yellow and Silver Books:

1999 Red Book (4 pages) 2017 Red, Yellow & Silver Books (9 pages)

1 Definitions 1 Definitions

2 General Provisions 2 General Provisions

3 Warranties 3 Warranties

4 Independence and Impartiality

4 General Obligations of the Member 5 General obligations of the DAAB Member

5 General Obligations of the Employer and the 6 General Obligations of the Parties
Contractor

7 Confidentiality

8 The Parties’ undertaking and indemnity

6 Payment 9 Fees and Expenses

7 Termination 10 Resignation and Termination

8 Default of the Member 11 Challenge

4
Ibid, 263, 264.
18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 5
9 Disputes 12 Disputes under the DAA Agreement

The considerably more prescriptive nature of the 2017 General Conditions is highlighted by its
nine pages in comparison with only four pages in the 1999 General Conditions. Sub-clause 4
prescribes seven specific matters that the DAAB member must comply with to assure the Parties
of his/her independence and impartiality. Under the 1999 General Conditions a member's
independence and impartiality were succinctly stated:
The Member warrants and agrees that he/she is and shall be impartial and independent of the Employer, the
Contractor and the Engineer. The Member shall promptly disclose, to each of them and to the Other
Members (if any), any fact or circumstance which might appear inconsistent with his/her warranty and
agreement of impartiality and independence.
Sub-clause 9 provides that DAAB fees comprise:
• A monthly fee as payment in full for being available on 28 days’ notice for all
meetings, Site visits and hearings, becoming and remaining knowledgeable about the
Contract and the Works and all office and overhead expenses.
• A daily fee for each day or part of a day for travel time (maximum of two days in
each direction), attending meetings and making Site visits, giving Informal
Assistance, preparing for and attending hearings and preparing decisions.
If the Parties and a DAAB Member fail to agree the amount of the monthly or daily fee, either
may require the appointing entity named in the Contract Data to set the fee.
Sub-clause 11 is a new provision that entitles either Party or a DAAB member to object to a
DAAB member on the grounds of alleged lack of independence or impartiality or otherwise.
Rule 10 Objection Procedure and Rule 11 Challenge Procedure of the DAAB Procedural Rules
define the procedure to be adopted in the event of a challenge. If the challenge is successful, the
DAAB member’s appointment is terminated with immediate effect, and any DAAB decision
made after the challenge was referred becomes void and ineffective.
Any dispute arising out of or in connection with the DAA Agreement or the breach, termination
or invalidity thereof shall be finally settled by arbitration by a single arbitrator under the ICC
Rules of Arbitration using the Expedited Procedure Rules (sub-clause 12).
The DAAB Rules are defined in sub-clause 1.4 to mean the document entitled DAAB
Procedural Rules published by FIDIC which are annexed to, and form part of, the General
Conditions of DAA Agreement.
3.2 DAAB Procedural Rules
The DAAB Procedural Rules comprise the following:
1. Objectives
2. Avoidance of Disputes
3. Meetings and Site Visits
4. Communications and Documentation
5. Powers of the DAAB
6. Disputes
7. Hearings
8. The DAAB’s Decision
9. In the event of Termination of DAA Agreement
10. Objection Procedure
11. Challenge Procedure.

18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 6

The 1999 Red Book contains nine Procedural Rules on one half pages. The very detailed
Procedural Rules in the 2017 Books contain 35 sub-clauses on six and a half pages.
The objectives of these Rules are defined in rule 1.1 as:
(a) to facilitate the avoidance of Disputes that might otherwise arise between the Parties; and
(b) to achieve the expeditious, efficient and cost-effective resolution of any Dispute that
arises between the Parties.
Rule 2.1 specifies the following for avoidance of disputes:
Where Sub-Clause 21.3 [Avoidance of Disputes] of the Conditions of Contract applies, the DAAB (in the
case of a three-member DAAB, all three DAAB Members acting together) may give Informal Assistance
during discussions at any meeting with the Parties (whether face-to-face or by telephone or by video
conference) or at any Site visit or by an informal written note to the Parties.
Informal Assistance means the informal assistance given by the DAAB to the Parties when
requested jointly by the Parties under Sub-clause 21.3 [Avoidance of Disputes] of the Conditions
of Contract.
Rule 3 Meetings and Site Visits requires face to face meetings with the Parties and/or visits to
the Site at regular intervals and/or at the written request of either Party. These are to be at
intervals of not less than 70 days nor more than 140 days (except as required to conduct a
hearing). Site visits can also be made at the written request of either Party at times of critical
construction events.
Rule 5 provides that the DAAB has the power to:
• establish the procedures for Site visits, Informal Assistance and decisions on
Disputes;
• decide on its own jurisdiction and the scope of any Dispute referred to it;
• appoint experts with the agreement of the Parties;
• decide if there will be one or more hearings;
• conduct meetings with the Parties and/or any hearing as it sees fit, without being
bound by any rules or procedures other than those in the Contract and the Rules;
• make use of its own specialist knowledge.
Rule 6.2 specifies the following for the resolution of Disputes:
The DAAB shall act fairly and impartially between the Parties and, taking due regard of the period under
Sub-Clause 21.4.3 [The DAAB’s decision] of the Conditions of Contract and other relevant circumstances,
the DAAB shall:
(a) give each Party a reasonable opportunity (consistent with the expedited nature of the DAAB
proceeding) of putting forward its case and responding to the other Party’s case; and
(b) adopt a procedure in coming to its decision that is suitable to the Dispute, avoiding unnecessary
delay and/or expense.
In respect of hearings, the DAAB has powers under rule 7.1 to:
• decide on the date and place for any hearing and its duration;
• request written documentation and arguments;
• adopt an inquisitorial procedure;
• request the production of documents and/or submissions from the Parties;
• request the attendance of persons that it considers may assist;
• refuse admission to any persons other than representatives of the Employer, the
Contractor and the Engineer; and
18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 7
 • proceed in the absence of any Party who received adequate notice of the hearing.
Rule 8 addresses a lacuna in the 1999 DAB Procedural Rules providing for the correction of
inadvertent slips or errors:
• If the DAAB finds a typographical, clerical or arithmetical error in its decision, it
may advise the Parties of the error and issue an addendum within 14 days after giving
its decision.
• If a Party finds a typographical, clerical or arithmetical error in the decision, it may
request the DAAB to correct the error in writing within 14 days after the decision has
been received.
• If a Party considers that a decision contains an ambiguity, it may request clarification
within 14 days of receiving the decision, and the DAAB shall respond within 14 days
of receiving the request with sole discretion to decline the request or correct the
decision by issuing an addendum.
4 Dispute Avoidance under FIDIC Contracts
The most important tool for dispute avoidance is maintaining clear lines of communication
between the contracting parties. The genesis of many disputes is in the submission and rejection
of Claims. As the 2017 Books make clear in the Definitions, a Claim is not the same thing as a
Dispute:
“Claim” means a request or assertion by one Party to the other Party for an entitlement or relief under any
Clause of these Conditions or otherwise in connection with, or arising out of, the Contract or the execution
of the Works.
“Dispute” means any situation where:
(a) one Party makes a claim against the other Party (which may be a Claim, as defined in these
Conditions, or a matter to be determined by the Engineer under these Conditions, or otherwise);
(b) the other Party (or the Engineer under Sub-Clause 3.7.2 [Engineer’s Determination]) rejects the
claim in whole or in part; and
(c) the first Party does not acquiesce (by giving a NOD under Sub-Clause 3.7.5 [Dissatisfaction with
Engineer’s determination] or otherwise),
provided however that a failure by the other Party (or the Engineer) to oppose or respond to the claim, in
whole or in part, may constitute a rejection if, in the circumstances, the DAAB or the arbitrator(s), as the
case may be, deem it reasonable for it to do so.
Some Employers appear to regard Claims as somehow illegitimate or tantamount to a dispute.
However, the Contractor has a contractual right to assert a Claim in accordance with the
provisions of the Contract, and it should be treated accordingly:
Claims should not be regarded as either inevitable or unpalatable, and complying with claims procedures
should not be regarded as being an aggressive act. Major projects give rise to major risks, which have to
be dealt with if they occur. Whilst the Parties might prefer everything to remain unchanged, they should
not instinctively seek to attribute blame if circumstances arise or events occur which give rise to an
adjustment of the Contract Price. In these events, the claims procedures are specified so as to provide the
degree of formality considered necessary for the proper administration of a building or engineering project.
Complying with these procedures and maintaining a cooperative approach to the determination of all
adjustments should enhance the likelihood of achieving a successful project.5
Thus, one of the techniques to avoid a Claim becoming a Dispute starts with clear
communication of a Claim to the other party: the factual basis of the Claim, including supporting
documents where appropriate, and the legal basis that supports the entitlement. If the Claim is
rejected, the basis for rejection of the Claim should be clearly communicated, including any
additional or different facts (including documents), and the legal basis that supports the rejection.

5
The FIDIC Contracts Guide (2000), 88, 89.
18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 8
In this writer's view, management of project execution in accordance with the requirements of
the Contract will materially assist in dispute avoidance. This involves, inter alia:
• the Contractor committing sufficient resources to carry out the contractual scope of
work within the Time for Completion;
• realistic and credible “as built” programmes that reflect what has actually occurred as
well as what is actually planned for the future;
• work completed to the contractually required quality;
• design documents submitted to the Employer in accordance with the requirements of
the Contract;
• maintaining and managing comprehensive documentation from the start of the
Tender through the execution of the project to ensure that the best evidence is
available to support/defend a Claim
• familiarity with the Contract conditions.
The following are some of the dispute avoidance techniques that can be adopted by a proactive
DAAB / DAB:
• Ensure that all DAAB/DAB meetings with the Parties are “without prejudice” (except
hearings in connection with a Dispute). This ensures that anything said by a Party in a
meeting cannot be used to the detriment of that Party if the issue subsequently becomes a
Dispute.
• Encourage open communication between the Parties at the DAAB/DAB meetings.
• Ensure that senior off-site personnel from both the Employer and the Contractor are
present at every DAAB/DAB meeting. This ensures that senior personnel hear the other
side of every issue, not just the view of their own personnel.
• Ask probing questions, particularly if it appears that the Parties are not addressing the
right technical or legal issues.
• If it appears that the Parties cannot agree on an issue, e.g. a Variation, request each of
them to prepare a brief position paper prior to the next DAAB/DAB meeting. A position
paper should state the relevant facts, refer to appropriate documents and articulate the
Party’s position in respect of the issue, and its opinion of the correct contractual position.
• If the position papers and subsequent negotiation between the Parties do not resolve the
issue, they will provide the background for the DAAB/DAB to give further Informal
Assistance.
• If the Parties request the DAAB/DAB to give a written (informal) opinion, the
DAAB/DAB should provide a “without prejudice” opinion, referring to the relevant facts
and providing brief reasons for the conclusions it comes to. The DAAB/DAB should
carefully consider whether a written opinion is necessary or appropriate in the
circumstances. The Parties are not bound to accept an informal opinion, and nor is the
DAAB/DAB bound by it if a dispute ensues.
• The DAAB/DAB should bear in mind that, unlike a DAAB/DAB decision, the
recommendation of an informal opinion does not need to be confined to strict contractual
rights.
The skills and techniques of a DAAB/DAB in “dispute avoidance mode” are the skills and
techniques of a Mediator or Conciliator. The DAAB/DAB’s objective is to assist the Parties to
communicate and find a commercial solution that is acceptable to them. It can materially assist
by asking questions and making suggestions from its own experience of other projects, and its
knowledge of the Contract, the Works and the Parties it has gained from its regular Site visits
and reading the Contract communications.
18.08.14 18016.02 Paper on FIDIC DAAB provisions.docx 9