BuildLaw Issue 38 December 2019 | Page 33

project participants who are engaging in formal contract-mandated avoidance, mitigation and resolution techniques are reaping success. The Dispute Resolution Board Foundation (DRBF), which tracks and analyses the use of dispute boards worldwide, reports that 85 – 98 percent of dispute board recommendations/decisions have not gone on to further arbitration or litigation.6
Despite these statistics, not all parties view dispute boards positively. The FIDIC dispute board provisions are frequently struck out, usually by Employers and more often in particular jurisdictions. While cost is often the first reason given for removal of the provisions, other common concerns include that the provisions encourage contractor claims, the board may deliver rough justice or bad decisions, the decisions may not be enforceable, or payments made in compliance with a decision may not later be recoverable.
Even where a contract has provided for the use of a dispute board, this does not always mean that the contractual provisions will be operated as intended, with the result that the perceived benefits of the dispute board are unlikely to be realised.
Sometimes, the lack of success may be a result of the board itself, rather than any action by or failure of the parties. This might happen where the board members appointed have more in common with one of the parties (shared nationality, language, culture, project experience), where the board appointed is not sufficiently experienced for the role of DAB, chosen perhaps for cost reasons, and not able to properly manage and assist the parties to resolve their disputes. These factors can lead to untenable or inconsistent decisions, which one or both parties will not respect and which will do nothing to reduce and finally resolve the disputes and issues between the parties.