FIDIC Clause 20.6 vs 21.6 Explained: Arbitration Under FIDIC 1999 and 2017 Compared

🔍 1️⃣ Purpose of Clause 20.6 / 21.6 [Arbitration]

So, why does FIDIC dedicate an entire clause to arbitration?

Imagine this: the Contractor and Employer have hit a serious disagreement. Maybe the Dispute Adjudication Board (DAB in 1999 / DAAB in 2017) made a decision that one party isn’t happy with. Or maybe someone just didn’t comply with the decision. After trying to resolve it amicably, there’s still no resolution in sight. That’s where Clause 20.6 (1999) or Clause 21.6 (2017) steps in—this is the contract’s emergency brake. It says: “OK, now it’s time to escalate this to formal international arbitration.”

Both versions of the clause are there to:

• Provide a structured pathway for final resolution.
• Specify rules, language, and procedural guidelines.
• Prevent disputes from lingering indefinitely and threatening project continuity.
• Make sure any award is enforceable globally, especially via ICC arbitration under the New York Convention.

🕰️ Evolution from 1999 to 2017:

The 2017 update doesn’t just modernize the language—it also tightens the process, integrates the arbitration clause more deeply into the broader dispute resolution framework, and expands arbitrator powers. It’s more procedural but also more predictable, which is often exactly what parties want when things go south.

🚨 Key Differences Between FIDIC 1999 and FIDIC 2017 Arbitration Clauses

Here’s a clear and concise side-by-side comparison to spotlight what’s changed—and why it matters:

📌 Feature	📘 FIDIC 1999 (Clause 20.6)	📙 FIDIC 2017 (Clause 21.6)
Trigger Condition	After DAB decision + failed amicable settlement	After DAAB decision + NOD, or non-compliance, or no DAAB in place
Timeline to Arbitration	56 days after amicable settlement effort	28 days after Notice of Dissatisfaction
Reference to Decision-Making Body	Dispute Adjudication Board (DAB)	Dispute Avoidance/Adjudication Board (DAAB)
Interim Relief	Not explicitly mentioned	Explicitly allows interim/provisional measures by arbitrators
Default Arbitration Rules	ICC Rules	ICC Rules (unless agreed otherwise)
Number of Arbitrators	3 arbitrators by default	1 or 3 arbitrators depending on agreement or dispute scale
Language of Arbitration	As per Clause 1.4 [Law and Language]	As per Clause 1.4 [Law and Language]
Effect of Arbitrator’s Decision	Final and binding without further certification	Same – final, enforceable, no certification needed
DAAB/DAB Decision Status	Can be reviewed, not binding	Admissible but not binding; full reconsideration allowed
Party Conduct Consideration	Not addressed	Tribunal may consider conduct (e.g. failure to appoint DAAB) when awarding costs
Cross-referencing Structure	Simpler flow: Clause 20.1 → 20.6	More integrated: Clauses 3.7, 21.4, 21.7, 21.8 all lead into Clause 21.6

This table gives a bird’s-eye view of how the approach to arbitration has matured in the 2017 edition—offering more flexibility, better integration, and greater alignment with international dispute resolution trends.

✉️ Sample Notice of Arbitration Letters

To make life easier, here are sample template letters for both editions:

📘 Sample Letter under FIDIC 1999 (Clause 20.6)

Subject: Notice of Arbitration under Sub-Clause 20.6 of the FIDIC Conditions of Contract (1999)

Dear [Recipient Name],

We refer to the contract dated [Contract Date] between [Employer Name] and [Contractor Name] for [Project Name].

A dispute has arisen in connection with the Contract and was the subject of a decision by the Dispute Adjudication Board (DAB) dated [Date of DAB Decision], which has not become final and binding. Following an unsuccessful attempt at amicable settlement in accordance with Sub-Clause 20.5, we hereby give notice that we are referring the dispute to international arbitration pursuant to Sub-Clause 20.6.

The dispute concerns: [brief description of dispute].

In accordance with the Rules of Arbitration of the International Chamber of Commerce (ICC), we request the constitution of the arbitral tribunal and propose [1/3] arbitrator(s) in accordance with the applicable rules.

Please confirm receipt of this notice.

Yours faithfully,

[Your Name]
[Position]
[Company Name]

📙 Sample Letter under FIDIC 2017 (Clause 21.6)

Subject: Notice of Arbitration under Sub-Clause 21.6 of the FIDIC Conditions of Contract (2017)

Dear [Recipient Name],

We refer to the contract dated [Contract Date] between [Employer Name] and [Contractor Name] for [Project Name].

Pursuant to Sub-Clause 21.6 [Arbitration], and following a Notice of Dissatisfaction dated [NOD Date] under Sub-Clause 21.4.4, and the failure to achieve amicable settlement, we hereby refer the dispute to international arbitration.

The dispute arises from: [brief description of dispute].

This notice is served in accordance with the Rules of Arbitration of the International Chamber of Commerce. We propose [1/3] arbitrator(s) to be appointed and suggest the seat of arbitration be [City, Country], as per the contract.

Kindly acknowledge receipt of this notice and confirm your position regarding the proposed arbitrator(s).

Yours sincerely,

[Your Name]
[Position]
[Company Name]

✅ Arbitration Checklist for Clause 20.6 (1999) and Clause 21.6 (2017)

Here’s a practical checklist to guide you through initiating arbitration under each edition:

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🧩 2️⃣ Breakdown of Clause 20.6 (1999) and Clause 21.6 (2017)

Let’s now break these down and see how each version handles arbitration.

📘 FIDIC 1999 – Clause 20.6: Arbitration

“Unless settled amicably, any dispute in respect of which the DAB’s decision (if any) has not become final and binding shall be finally settled by international arbitration. Unless otherwise agreed by both Parties:

(a) the dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce,

(b) the dispute shall be settled by three arbitrators appointed in accordance with these Rules, and

(c) the arbitration shall be conducted in the language for communications defined in Sub-Clause 1.4 [Law and Language].”

Additional key aspects:

• If the parties can’t agree on the place of arbitration, the ICC steps in to decide.
• Arbitration can be initiated before or after the Works are completed.
• The arbitrators have the power to open up, review, and revise any prior decision by the Engineer or DAB.
• The arbitral award is final and binding and payable without any further certification or action by the Engineer.

📙 FIDIC 2017 – Clause 21.6: Arbitration

“Unless settled amicably, any Dispute in respect of which:

(a) the DAAB’s decision (if any) has not become final and binding,

(b) a Notice of Dissatisfaction has been given under Sub-Clause 21.4.4 [Dissatisfaction with DAAB’s decision],

(c) Sub-Clause 21.7 [Failure to Comply with DAAB’s Decision] applies, or

(d) Sub-Clause 21.8 [No DAAB in Place] applies

shall be finally settled by international arbitration.”

Further details:

• Arbitration shall be conducted under the ICC Rules (default), with either one or three arbitrators.
• The language is the contractual language under Sub-Clause 1.4.
• Arbitrators may issue interim or provisional measures.
• Arbitrators are not bound by DAAB decisions, but such decisions are admissible as evidence.
• The tribunal may take into account the conduct of parties (e.g., failing to form a DAAB) when deciding on costs.

🔁 Compared to 1999, this is a more comprehensive and procedural clause, reflecting modern expectations in international contracts.

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⚖️ 3️⃣ Key Interpretations and Implications

✅ What’s consistent in both?

• Arbitration is the final step after failure to resolve disputes amicably.
• Arbitrators have full authority to reassess and decide independently.
• Arbitration can proceed before or after project completion.
• The Engineer can still be called to testify.

🚨 What’s different in 2017?

🔍 Feature	1999 Edition	2017 Edition
Trigger timeline	56 days post-Amicable Settlement	28 days post-NOD
Procedural references	Basic DAB/amicable settlement	Detailed integration with DAAB, NODs, and compliance routes
Enforcement	Final award is enforceable	Same + interim/provisional measures allowed
DAAB Behavior Impact	Not considered	Can impact costs awarded by tribunal
Use of DAAB Decision	Not addressed	Admissible but non-binding evidence

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🔗 4️⃣ Cross-Referencing with Other Clauses

Let’s talk strategy. Arbitration is never a surprise—it’s the final step in a carefully designed multi-tiered dispute resolution pathway. And each clause along that path matters.

📘 FIDIC 1999 Cross-Referencing:

To understand when you can call on Clause 20.6, you need to start back at:

• Clause 20.1 – where the Contractor starts a claim.
• Then to Clause 20.4, which sets up the Dispute Adjudication Board (DAB).
• If a DAB decision is given, and someone disagrees, Clause 20.5 kicks in, requiring the parties to attempt an amicable settlement.
• If that fails within 56 days, we land in Clause 20.6—time to call in the arbitrators.

Now, notice something? This chain keeps things fair and efficient. It gives both parties time to try resolution before entering the cost-heavy, time-consuming world of arbitration.

📙 FIDIC 2017 Cross-Referencing:

In the 2017 version, FIDIC really beefs up the cross-referencing.

Before you can invoke Clause 21.6 [Arbitration], you might come through multiple possible routes:

• Clause 3.7: The Engineer tries to help the parties reach an agreement. If that fails, the Engineer makes a determination.
• If either party disagrees with that determination, they can escalate to a DAAB under Clause 21.4.
• If still dissatisfied, a Notice of Dissatisfaction under Clause 21.4.4 must be issued within 28 days.
• From here, you hit different scenarios:
  • If a DAAB decision is ignored → you can escalate via Clause 21.7.
  • If there is no DAAB in place at all → you go straight to arbitration under Clause 21.8.

This setup gives parties multiple structured off-ramps to resolve disputes before triggering arbitration. It also makes sure that any decision not challenged properly becomes final—adding pressure to act swiftly.

Overall, Clause 21.6 is like the legal lock on the dispute resolution chain. But that chain has several links before we get there, and FIDIC 2017 ensures they all work together like clockwork.

🤔 5️⃣ What If Scenarios?

🧪 DAAB gave a decision, one party is unhappy?

Here’s what happens:

• In 1999, the party issues a Notice of Dissatisfaction and waits 56 days. If the dispute is not resolved amicably, it can then proceed to arbitration.
• In 2017, the waiting time is shorter—just 28 days after the Notice of Dissatisfaction. Then, either party can initiate arbitration.

🧪 DAAB decision ignored?

• In 1999, this is handled under Clause 20.7. The aggrieved party may go straight to arbitration without waiting further.
• In 2017, this is explicitly addressed in Clause 21.7. If a party fails to comply with a DAAB decision, the other party can immediately escalate to arbitration.

🧪 No DAAB in place?

• Both editions allow for arbitration even when no DAAB has been established.
• Clause 21.8 in 2017 clarifies this more explicitly and provides a clear pathway.

These scenarios show how FIDIC tries to ensure disputes don’t get stuck due to procedural roadblocks.

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🛠️ 6️⃣ Suggestions for Clarity and Improvement

This section is all about making great clauses even better. Let’s look at how these arbitration clauses could be made clearer and more user-friendly:

📌 Define “final and binding” with greater precision

This phrase appears often but can create confusion. For instance, is a DAAB decision still “final and binding” if a party doesn’t comply within a certain time? And what about partial decisions? A short definition or footnote could go a long way.

📌 Include illustrative examples of arbitration institutions

While ICC is a strong default, some users might prefer LCIA, SIAC, or UNCITRAL Rules. A small note or reference to optional alternatives would make the contract more adaptable.

📌 Clarify the impact of party conduct on cost allocation

This is especially important in the 2017 edition. If one party delays forming the DAAB or refuses to participate in amicable steps, the tribunal might penalize them in cost decisions. But this isn’t clearly quantified. A bit more clarity would reduce arguments later.

📌 Reaffirm the language of arbitration

The clause refers to Sub-Clause 1.4, but it’s helpful to reiterate that the arbitration proceedings must be conducted in a mutually understood language—especially for international projects.

📌 Offer a quick-reference flowchart in the contract annex

This isn’t about the text itself but would be a fantastic usability feature. A simple flowchart showing the steps from dispute to DAAB to arbitration would help everyone understand the timeline and rights at a glance.

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📌 7️⃣ Final Takeaways

Here’s what we learned:

🔹 Both clauses are strong, enforceable, and internationally recognized. They give parties confidence that serious disputes will get resolved.

🔹 The 1999 version keeps it simple and to the point—ideal for straightforward projects or jurisdictions familiar with the ICC.

🔹 The 2017 version adds layers of clarity, enforceability, and procedural nuance. It’s perfect for complex projects or environments where tight dispute control is vital.

🔹 Understanding how these clauses function and connect with others in the contract helps project teams avoid pitfalls—and manage conflict like pros.