Dispute Boards 2

• In construction projects it is important that the parties have a means of achieving binding decisions to resolve their disputes on an interim basis, so that work on the project can continue whilst the parties await the outcome of formal dispute resolution procedures (which can take months, often years, to complete)
• Many parties in international construction projects achieve this objective by providing for adjudication
• Adjudication can take different forms. For example, it can involve a single person or a panel deciding the dispute on an interim basis. The decision maker(s) will often be technical specialists or experts in their fields. The use of panels of experts to act as interim decision makers has become increasingly popular in international construction projects.
• he decision of the panel is enforceable only as a matter of contract, not as a judgment of the court or award of an arbitral tribunal. It can therefore be more time consuming and costly to enforce the panel's decision in the event that one party does not comply with it.
• Common features of adjudication panels in international construction projects include: expertiese and impartiality of the members, confidentiality - incl. in arbitration/litigation, A requirement that the panel members keep themselves regularly informed of the progress of the project
• A number of different terms may be used to describe adjudication panels. For example, the FIDIC standard form contracts refer to ‘Dispute Adjudication Boards', whilst the World Bank refers to ‘Dispute Review Boards'. Both these panels make interim binding decisions
• The terms ‘Dispute Board’ and ‘Dispute Review Board’ may have different meanings to parties from different jurisdictions. Dispute Review Board may indicate that it makes non-binding recommendation as is common in the United States and  imposing a binding interim decision on the parties
• Advantages of adjudication by panel:

• It provides the parties with a dispute resolution process that is relatively swift and less costly than court or arbitration proceedings (of course such proceedings may be avoided only temporarily if a party is dissatisfied with the decision of the adjudication panel).
• It allows the parties to continue with their project/contract while the dispute is being resolved.
• It provides the parties with the opportunity to select decision makers with appropriate skills, technical expertise and experience for the project/contract in question.

• Disadvantages of adjudication by panel:

• The decision of the panel is enforceable only as a matter of contract, not as a judgment of the court or award of an arbitral tribunal. It can therefore be more time consuming and costly to enforce the panel's decision in the event that one party does not comply with it

• Although the parties gain the benefit of having decisions made by people with technical expertise, sometimes such panels make decisions that are more ‘technical’ than ‘judicial’ in nature. That may not be appropriate for the final determination of the dispute. Similarly, panel members with technical expertise may not be best suited to deciding mixed questions of fact and law

• Panels are commonly required to provide decisions within a relatively short period of time (typically within three months of a referral). This means the panel may not be able to conduct an in-depth and rigorous analysis of all the issues (factual and legal) that the parties consider to be relevant to their dispute.

• The panel does not have the ability (absent agreement of the parties) to require disputes arising under different contracts to be joined or consolidated with disputes arising under the contract in question, even if the same parties are involved in both disputes or the disputes arise out of the same events or circumstances (e.g., disputes in relation to a main contract and a subcontract dispute)

• The panel's proceedings may prove difficult to control due to the wide freedom generally given to the panel to act as experts and investigate the facts.

Source: Chapter 3: Dispute Avoidance and Resolution in Jane Jenkins , International Construction Arbitration Law, Arbitration in Context Series, Volume 3 (© Jane Jenkins; Kluwer Law International 2013) pp. 49 - 84