FIDIC Clause 20.2 vs 21.1: Dispute Board Appointment Explained (1999 vs 2017)

Comparative Analysis: Clause 20.2 (1999) vs. Clause 21.1 (2017)

Topic: Appointment/Constitution of the Dispute Adjudication Board (DAB/DAAB)

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1. 🔍 Purpose of the Clauses

Let’s start by getting to the heart of what these two clauses are really about.

In the 1999 Edition, Clause 20.2 is titled “Appointment of the Dispute Adjudication Board.” It introduces the idea of a DAB as a panel—either one or three individuals—who step in to resolve disputes during the contract. Think of the DAB like a pop-up team of experts that parties bring in only when things get messy. It could be a standing board (always there) or an ad hoc one (appointed only when needed), depending on how the contract is set up.

Here’s how Clause 20.2 begins:

“Disputes shall be adjudicated by a DAB in accordance with Sub-Clause 20.4 [Obtaining Dispute Adjudication Board’s Decision]. The Parties shall jointly appoint the DAB by the date stated in the Appendix to Tender.”

Contrast this with the 2017 Edition, where Clause 21.1 talks about the “Constitution of the DAAB” (Dispute Avoidance/Adjudication Board). The name change isn’t just cosmetic—it reflects a significant shift in mindset. The DAAB isn’t just there to make decisions after problems arise. It’s meant to actively help prevent disputes from happening in the first place. This board is always on the job, following the project from the get-go.

Clause 21.1 opens with:

“Unless otherwise stated in the Contract Data, the DAAB shall comprise three suitably qualified members. The DAAB shall be constituted before the Commencement Date, or as stated in the Contract Data.”

🔹 Bottom line: Here’s the key shift in philosophy: in the 1999 version, the DAB is a bit like a lifeguard who only shows up once someone’s already in trouble. It’s a reactive mechanism—brought to life only when a dispute surfaces and things are starting to go off the rails. Contrast that with the 2017 DAAB, which is more like a personal trainer or coach who’s been there from the warm-up lap. They’re constantly involved, helping to steer things in the right direction, giving feedback, and stepping in before tensions erupt. This evolution isn’t just a procedural tweak—it’s a fundamental upgrade in how FIDIC envisions dispute management: not just solving problems, but preventing them from ever surfacing.

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2. 📄 Detailed Breakdown of the Clauses

✅ Clause 20.2 (1999)

• When is the DAB Appointed? Within 28 days of the Contractor receiving the Letter of Acceptance.
• How Many Members? One or three, as agreed by the Parties.
• Who Picks Them? Both parties jointly. If no agreement, then refer to Clause 20.3.

“If the Parties fail to agree upon the appointment of the sole member or the three members of the DAB by the date stated… the appointing entity or official named in the Appendix to Tender shall appoint this person or these persons.”

• Formalities? Once the parties have identified who will serve on the DAB, the next step is putting it in writing—literally. Everyone involved—the Employer, the Contractor, and the appointed DAB member(s)—signs a standard “Dispute Adjudication Agreement.” This isn’t just a formality; it’s a legally binding contract that sets the ground rules. It outlines duties, expectations, timelines, compensation, and conduct standards. Think of it as the rulebook that ensures everyone knows the game plan before any disputes even arise. It gives the DAB the official authority to act and ensures that all parties are committed to the process from the start.
• Neutrality Check: Must be independent and impartial.
• Money Matters: When it comes to paying the DAB, FIDIC keeps it simple and fair: both the Employer and the Contractor share the cost equally—50/50. This balanced approach is designed to reinforce the idea that the DAB serves both parties impartially. No one side has more financial leverage over the board, which helps maintain trust and neutrality. It’s like splitting the bill for a mutual referee—if they’re here to help settle your disagreements, you both chip in to keep them on the field. And in practice, this equal split also encourages both sides to use the DAB fairly and efficiently.

✅ Clause 21.1 (2017)

• When is the DAAB Appointed? Ideally before or at signing; otherwise, within 28 days after the Commencement Date.
• Always Standing: The DAAB isn’t just a backup option to be pulled in when things go sideways—it’s baked into the fabric of the contract from Day One. The idea is that by having this board in place and active throughout the life of the project, the parties are always just a conversation away from resolving potential problems. It creates a sense of continuity, accountability, and familiarity. The DAAB doesn’t parachute in out of nowhere; they’ve been involved, on-site, and informed the whole time. That kind of presence means they’re not only more effective when a dispute does arise, but they can often stop a small issue from snowballing into a full-blown battle. It’s like having a dedicated peacekeeping team embedded in your project!

“If the DAAB is not agreed by the Parties within the time stated in the Contract Data, it shall be appointed by the appointing entity identified in the Contract Data.”

• Standard Form Agreement: Includes the DAAB Agreement in the Appendix.
• Engagement Level: The DAAB isn’t just expected to sit quietly until called upon—they’re meant to be an active, on-the-ground presence. That’s why the 2017 contract requires them to make regular site visits and maintain ongoing communication with both parties. These aren’t ceremonial visits either. The idea is to keep the DAAB familiar with the project’s progress, the personalities involved, and any brewing issues—so that when a disagreement arises, they already have the context to weigh in quickly and wisely. And even better? Their job includes offering informal assistance—early guidance, off-the-record chats, nudges toward compromise—before anything escalates to a full dispute. It’s proactive conflict management in action, not just problem-solving after the fact.

“The DAAB shall visit the Site and meet the Parties regularly (at intervals stated in the Contract Data or agreed by the Parties and the DAAB)…”

🚨 Key Difference: Here’s the real game-changer between the two editions: under the 1999 contract, the DAB might not even exist until a problem flares up. It’s like calling in a specialist only after you’ve already hit a crisis point. This reactive approach can delay resolution, especially if appointing the board takes time when emotions are already running high.

But in the 2017 version, the DAAB is a permanent, standing presence. They’re in place from the very beginning—observing, advising, and helping smooth out bumps long before they turn into roadblocks. It’s like having a wise mentor on standby throughout the project, making sure minor tensions don’t escalate into full-on disputes. This shift from “emergency responder” to “on-site guide” dramatically improves the contract’s ability to keep projects running smoothly.

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3. 🔹 Key Interpretations and Practical Implications

Here’s a visual breakdown of how the 1999 and 2017 clauses compare across key dimensions. This table highlights how the philosophy, timing, and role of the dispute boards have evolved:

Feature	1999 Edition – Clause 20.2 (DAB)	2017 Edition – Clause 21.1 (DAAB)
Name	Dispute Adjudication Board (DAB)	Dispute Avoidance/Adjudication Board (DAAB)
Type	Ad hoc or standing, depending on the contract	Always standing board, by default
Timing of Appointment	Within 28 days of the Contractor receiving the Letter of Acceptance	Preferably before or at Contract signing; max 28 days after Commencement Date
Activation	Formed when a dispute arises or if contract requires a standing board	Formed at the start of the project regardless of dispute status
Role	Resolves disputes when referred	Resolves and helps avoid disputes through informal assistance and regular interaction
Contractual Agreement	Dispute Adjudication Agreement signed by all parties	DAAB Agreement included in Appendix; signed and formalized pre-Commencement
Engagement Level	No involvement unless formally activated	Regular site visits, proactive monitoring, informal guidance
Decision Timeline	84 days (typically) to issue binding decision	Similar timeline; decisions remain binding unless contested through NOD
Cost Sharing	50/50 between Employer and Contractor	50/50 between Employer and Contractor
Fallback Mechanism	Clause 20.3 – Appointing entity steps in if no agreement is reached	Clause 21.2 – Same structure for fallback; appointing entity assigned in Contract Data
Dispute Prevention Tools	None explicitly	Encouraged via Clause 21.3 and Procedural Rules

📊 Real World Impact:

• Under 1999, time is often lost forming the DAB when a dispute arises.
• Under 2017, the DAAB is primed and ready to jump in from Day 1.

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4. ⚖️ Cross-References Within the Contract

• 1999 Edition:
  • Clause 20.3: This clause is like the contract’s contingency plan for indecision. If the Employer and Contractor can’t agree on who should sit on the DAB by the specified date, Clause 20.3 steps up. It empowers a pre-named appointing entity—usually someone identified in the Appendix to Tender—to make the appointment instead. It keeps things from grinding to a halt when the parties hit an impasse. It’s the contract’s way of saying, “We thought this might happen, and here’s exactly how we’ll fix it.”
  • Clause 20.4: This clause is where the DAB earns its stripes. It outlines how the DAB process actually unfolds once a dispute is referred. First, either Party can bring a dispute to the DAB in writing. Then the DAB gets a defined time—typically 84 days unless agreed otherwise—to consider the case and issue its decision. The beauty here is in the clarity and structure: it prevents endless back-and-forth and brings everyone to a resolution timeline. The DAB’s decision is binding immediately (unless and until revised in arbitration), which means the project keeps moving, even if one side isn’t thrilled. It’s FIDIC’s way of saying, “Let’s not stop the train while we argue about the ticket.”
• 2017 Edition:
  • Clause 21.2: Think of this as the project’s safety valve. If the parties can’t agree on who should serve on the DAAB—or one of them simply goes radio silent—Clause 21.2 steps in. It empowers a pre-designated appointing body (named in the Contract Data) to take over the process. That way, the appointment doesn’t stall indefinitely. The contract keeps moving forward, the DAAB gets installed, and potential disputes don’t have a chance to snowball. It’s FIDIC’s way of saying, “Don’t worry—we’ve got a plan B.”
  • Clause 21.3: This clause is the real MVP of dispute prevention. Instead of waiting until a disagreement flares up, Clause 21.3 empowers the DAAB to jump in early and keep things cool. It encourages informal discussions, off-the-record chats, and friendly nudges to steer both parties back to common ground—before any paperwork gets flying. It’s like having a built-in conflict coach who doesn’t wait to be called into the game. They’re watching the play unfold and quietly adjusting strategy before it even becomes a foul. That’s next-level contract management.
  • DAAB Procedural Rules (Appendix): This appendix is the DAAB’s playbook. It lays out how the board should operate—from scheduling regular site visits to offering informal assistance and managing communications. Think of it as their rulebook for being a helpful presence rather than just dispute referees. It ensures the DAAB doesn’t just show up for the drama—they’re there proactively, checking in, asking the right questions, and staying looped into the project’s pulse. This way, minor issues can be smoothed over early, and formal disputes may never need to arise. That’s some serious behind-the-scenes value!

“The DAAB shall be deemed to be constituted when the DAAB Agreement has been signed by the Employer, the Contractor, and each of the DAAB members.”

💡 Tip: These clauses don’t live in isolation—they’re deeply integrated into the broader dispute resolution machinery of each edition.

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5. 🤔 What If Scenarios

🟦 Scenario 1 (1999): The parties miss the 28-day deadline for appointment?

➡ Think of it like this: if the parties can’t shake hands on who should be on the DAB within the 28-day window, the contract has a safety net—Clause 20.3. It activates a pre-agreed appointing entity (like FIDIC or someone named in the Appendix to Tender) to step in and make the decision. It’s a built-in tiebreaker to keep things from stalling when tensions are already running high.

🟧 Scenario 2 (2017): A party delays signing the DAAB agreement?

➡ Picture this: one party is dragging their feet, avoiding the paperwork, and the DAAB appointment is stuck in limbo. That’s when Clause 21.2 swoops in like a project superhero. It activates a predefined appointing entity—usually named right in the Contract Data—who steps in, picks the board members, and gets the show back on the road. No more finger-pointing or delays. It’s the contract’s way of saying, “We’re not waiting around. Let’s move forward.”

🟧 Scenario 3 (2017): Can the DAAB help before things go nuclear?

➡ Yes. The DAAB can give informal, non-binding advice to nip issues in the bud.

💡 Pro Insight: That early advisory role in the 2017 DAAB is a game-changer for maintaining momentum and morale on site.

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6. 🔮 Suggestions for Clarity and Improvement

For the 1999 Edition:

• Encourage default standing boards.
• Add procedural detail and timelines.
• Recommend periodic engagement (e.g., quarterly visits).

For the 2017 Edition:

• Define “regular” site visits more clearly.
• Allow scaled-back DAAB for smaller projects.

📅 Quick Win: Adjust the visit frequency and scope in the Contract Data based on project size and complexity.

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7. 📈 Final Takeaways

• 1999 Clause 20.2 provides a functional but reactive dispute solution.
• 2017 Clause 21.1 offers a robust, integrated tool for both prevention and resolution.

📌 For complex or high-stakes projects, the continuous presence of the DAAB fosters transparency, dialogue, and faster resolutions.

📄 Best Practice: Get your DAAB on board early, keep them engaged, and treat them as strategic allies—not just emergency responders.

Would you like a side-by-side table with the full text of each clause next?

Flow Chart

✅ DAB/DAAB Appointment Checklist (Tabular Format)

Checklist Item	1999 Edition – Clause 20.2 (DAB)	2017 Edition – Clause 21.1 (DAAB)
Type of Board	Standing or ad hoc (as per Contract)	Always standing board
Timing of Appointment	Within 28 days of Letter of Acceptance	Preferably before signing or within 28 days of start
Number of Members	1 or 3, jointly agreed	1 or 3, stated in Contract Data
Appointment Agreement Signed	DAB Agreement signed by Employer, Contractor, DAB	DAAB Agreement signed by all Parties and members
Appointing Authority in Case of Disagreement	Named in Appendix to Tender	Named in Contract Data
Neutrality Declaration Provided	Required	Required
Conflict of Interest Disclosure	Advised	Required as per DAAB Procedural Rules
Cost Sharing	50/50 between Employer and Contractor	50/50 between Employer and Contractor
Engagement Level	Engaged only when dispute arises	Ongoing, proactive participation from start
Informal Assistance Permitted	Not explicitly provided	Yes – Informal advisory role encouraged
Regular Site Visits Required	Not required	Required at agreed intervals (Contract Data)
Procedural Framework Defined	Basic (Dispute Adjudication Agreement)	Full Procedural Rules in Appendix
Recordkeeping & Documentation in Place	DAB Agreement and records filed	DAAB Agreement, visit reports, assistance records filed
Dispute Prevention Function	No (pure adjudication)	Yes – Dispute avoidance is part of the role
DAAB Visit Schedule and Logistics Defined	Not applicable	Yes – must be clearly stated and scheduled
Integration with Contract Administration	Reactive mechanism	Integrated with project meetings, progress monitoring

📄 Sample Letter

📄 Sample Letter 1 – Joint Proposal for Appointment of DAB/DAAB Member

To: [Proposed DAB/DAAB Member]
Subject: Proposal for Appointment to Dispute Adjudication Board / Dispute Avoidance/Adjudication Board

Dear [Name],

We are pleased to inform you that both the Employer and the Contractor have agreed to propose your appointment as a member of the Dispute [Adjudication Board (DAB) / Avoidance/Adjudication Board (DAAB)] in accordance with [Clause 20.2 / 21.1] of the FIDIC Conditions of Contract for Plant and Design-Build.

Should you accept, the Parties intend to enter into the standard [Dispute Adjudication Agreement / DAAB Agreement] as per the form included in the Contract.

Please confirm your willingness to serve, your availability, and your agreement to the terms proposed.

Yours faithfully,
[Name]
[Title, for and on behalf of the Employer]

[Name]
[Title, for and on behalf of the Contractor]

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📄 Sample Letter 2 – Notification of Failure to Agree on Appointment

To: [Appointing Authority]
Subject: Request for Appointment of [DAB/DAAB] Member Under [Clause 20.3 / 21.2]

Dear [Appointing Authority Name],

In accordance with Clause [20.3 (1999) / 21.2 (2017)] of the FIDIC Conditions of Contract, we hereby notify you that the Parties have not been able to reach agreement on the appointment of the [Dispute Adjudication Board / Dispute Avoidance/Adjudication Board] within the timeframe stipulated in the Contract.

We kindly request that you proceed with the appointment of [one / three] member(s) in accordance with the procedures and authority granted under the Contract.

Please do not hesitate to contact us should you require any supporting documentation or clarification.

Yours faithfully,
[Name]
[Title, for and on behalf of the Contractor / Employer]

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📄 Sample Letter 3 – Confirmation of DAAB Constitution

To: [All Project Stakeholders]
Subject: Confirmation of Constitution of DAAB – Clause 21.1

Dear All,

We are writing to confirm that, in accordance with Clause 21.1 of the FIDIC 2017 Conditions of Contract, the Dispute Avoidance/Adjudication Board (DAAB) has now been duly constituted.

The following individuals have been appointed as members:

1. [Name] – Chairperson
2. [Name] – Member
3. [Name] – Member

The DAAB Agreement has been signed by all Parties and members, and the board will commence its functions immediately, including site visits as per the agreed schedule.

Please update your records accordingly and extend the necessary cooperation to the DAAB.

Yours faithfully,
[Name]
[Title, for and on behalf of the Employer / Contractor]