Dispute Boards

• There are three types of Dispute Boards: Dispute Review Boards, Dispute Adjudication Boards, and Combined Dispute Boards
• The first Dispute Boards were called a Dispute Review Board ("DRB") and they made recommendations rather than decisions (1975-1997)
• This was followed by the concept of a Dispute Adjudication Board ("DAB"), which gave binding Decisions rather than just recommendations (1995-2001)
• Combined Dispute Board ("CDB")normally issues Recommendations but may issue a Decision if a party so requests and no other party object
• There are 3 main International bodies providing Rules and Procedures for Dispute Boards. These are FIDIC [Fédération Internationale des Ingénieurs–Conseils], DBF [The Dispute Board Federation], and the ICC [International Chamber of Commerce]
• The ICC Dispute Board Documents, in force as from 1 September 2004, consist of Standard ICC Dispute Board Clauses, which the parties can incorporate into their contracts and which provide for three types of Dispute Boards: A Dispute Review Board ("DRB"); a Dispute Adjudication Board ("DAB"); and a Combined Dispute Board ("CDB")
• ICC also provides Dispute Board Rules, which govern the procedure before any Dispute Board (DRB, DAB or CDB) and they also provide their ICC Model Dispute Board Member Agreement
• ICC Dispute Boards can be established for any type of contract and are not limited to construction contracts
• FIDIC Clause 20 ("Claims, Disputes and Arbitration") provides for a combination of a "Dispute Adjudication Board" (20.4), amicable settlement (20.5), and ICC arbitration (20.6)
• The Dispute Board Federation, formed in Geneva as a non-profit NGO it has expanded to offices in Singapore, and Belgrade and in 2014 will be opening offices in Santiago and Beijing. Partnering with some of the world’s major organisations such as the World Bank/IFC and FIDIC, it has grown  not only acts as an appointing body but also trains and allows for networking between its members, government officials, infrastructure lenders and contractors.
• Dispute boards provide economical resolution of disputes on construction and infrastructure projects without any delay or increased costs
• Can be included as conflict control mechanism in the contract to promote collaboration between business partners so they can solve problems early and avoid more costly end-point conflict resolution processes
• Agreements to use a DRB should be addressed as early as possible, preferably when the initial contracts for the project are being negotiated and well in advance of when disputes might arise
• Selection procedures must assure appointment of a DRB that is completely impartial to provide credibility to their recommendations and party respect and confidence in reports
• Owners have also drafted DRB provisions that establish a monetary threshold for disputes to be heard by the DRB, for example, $100,000 [“small claims “procedure]
• When requested, and with the approval of both parties, the DRB may issue informal “advisory” opinions to assist the parties in resolving a dispute in its early stages, outside the formal DRB hearing process
• Advisory opinions do not prevent the issue from being presented subsequently at a DRB hearing
• The method is appropriate for many type of continuing business relationships
• The parties may choose to have an experienced construction lawyer serve on the DRB. This can be very beneficial with respect to issues involving contract law and interpretation consistent with the parties’ intent when the contract was written
• First and foremost, the DRB report/recommendation is used by the parties to negotiate a resolution. In most cases, as the statistics show, that is what occurs. If it doesn’t, the issue of using the report in litigation/arbitration comes into play
•  Contracting parties should seriously consider the issue of potential admissibility or inadmissibility of DRB recommendations when they are negotiating the DRB agreement
• Moreover, the three-party agreement usually precludes DRB Members from being called to testify in any subsequent adjudicatory proceedings
• In a Dispute Board setting the amount to be paid to the Board (the .01 - .02%) is for all of the fees for the life of the project no matter how many disputes come before the Board
• Dispute Adjudication Board Decision, having been made by experienced and extremely knowledge construction experts can and is used in any subsequent proceedings as evidence of what happened and functions as an "expert’s report" on the issues presented
• The major difference from other form of dispute avoidance mechanism such as litigation, arbitration or mediation  is that a Dispute Board is appointed from the start of the contract so the members of the Dispute Board know both the project and the parties very well and have regular contact
•  Decisions for the payment of moneys will be enforced immediately and even prior to the actual full arbitration thus allowing the Decision to be given immediate effect per the parties’ contractual agreements
• Thus not only are Dispute Boards cheaper than arbitration they, through the help of arbitration if necessary, are much faster and guarantee prompt payment under any Decisions given by the Dispute Board
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Sources:
The Role of Dispute Boards in  Construction - Benefits without Burden, DR. CYRIL CHERN

Achieving real time resolution and prevention of disputes,CPR Institute