Mandatory dispute adjudication boards ignored by regional contractors
12 years after introduction, Gulf still slow to respond to World Bank and ICC’s calls for DABs
Resistance towards the application of Dispute Adjudication Boards (DABs) in the region is to prevent the exposure of poor contract administration, says author and claims consultant Andy Hewitt.
DABs were introduced into the FIDIC forms of contract in 1999 however their adoption in the Middle East has been much slower than other region despite insistence of their application from the World Bank and International Chamber of Commerce.
Each board is required to be impartial, familiar with the project contract and to conversant with events by way of regular site visits and progress reports.
“Employers may see DABs as an erosion of their ability to act in a high-handed manner toward contractors and supervising consultants fear that DABs may expose poor contract administration,” said Hewitt.
“DABs consist of impartial experts who are skilled in adjudication and are also available to advise and provide opinions to the parties. They reduce contention, spurious claims, unreasonable determinations and posturing which allows the parties to concentrate on the project rather than disputes and can settle a dispute within three months. The cost of using DABs is a negligible part of the project cost, is vastly less that arbitration or litigation and is likely to produce lower bids from tenderers,” explained Hewitt.
“These are significant advantages to all parties on a construction project, with the possible exception of claims consultants and lawyers,” he added.
“I would suggest that if it were possible to insure against disputes at such costs, the parties would be rushing to their insurance brokers, especially if these costs are compared to typical costs of arbitration or court proceedings.”
Writing exclusively for Big Project Middle East, Andy Hewitt will explain more about DABs online next week
