Views in the last 30 days: 59
Estimated read time: 11 minute(s)
1️⃣ What’s the Purpose of These Clauses?
Let’s start with the big picture. Both Clause 20.3 in the 1999 edition and Clause 21.2 in the 2017 edition tackle the same headache:
What happens if the parties just can’t agree on who should sit on the Dispute Board? 😣
This board (DAB in 1999, DAAB in 2017) plays a crucial role in resolving disagreements before things spiral into full-blown arbitration. So naturally, setting up this board quickly and smoothly is key.
✅ In the 1999 edition, the focus is:
“OK, we’ve tried to appoint the DAB, but we’re stuck. Now what?”
It gives a lifeline: an appointing authority (named in the contract, or FIDIC by default) steps in to help.
✅ In the 2017 edition, it’s even more proactive:
It says, “We want this DAAB in place from the start. If you haven’t sorted it in 28 days, FIDIC jumps in.”
The whole tone shifts from reactive to proactive—it’s part of FIDIC’s broader effort to turn dispute boards from a “last resort” into a core project tool for avoiding disputes altogether.
🔁 Historical Evolution Insight:
FIDIC saw that in practice, the 1999 DABs were often set up late—or never. That undercuts their whole purpose. So in 2017, they flipped the script: make it automatic, make it binding, and keep projects moving. 🚀
2️⃣ Detailed Breakdown of the Clauses
Now let’s walk through what each clause actually says, piece by piece.
📘 Clause 20.3 (1999): Failure to Agree Dispute Adjudication Board
Here’s the actual clause text:
“If any such nominee is not agreed upon by the Parties within 28 days after a Party has given notice to the other Party of a proposed appointment, then the appointing entity or official named in the Appendix to Tender shall, upon the request of either Party and after due consultation with the Parties, appoint such member of the DAB. This appointment shall be final and conclusive.”
Here’s how it works:
- The parties have 28 days to agree on who should be on the DAB.
- If they fail? Either one can write to the “appointing entity” (named in the contract or FIDIC).
- The appointing entity then has 14 days to select the DAB member(s).
- That selection is final and binding (at least in practice, even if not clearly stated).
📌 The DAB could be:
- A single person (for simpler jobs).
- A three-person board (for complex or high-stakes projects).
But it only kicks in if there’s a disagreement. It’s a fallback mechanism, not a starting point.
📕 Clause 21.2 (2017): Failure to Appoint DAAB Member(s)
Here’s the clause as worded in the 2017 edition:
“If the DAAB is not appointed within 28 days after the Contract Date, then, unless otherwise agreed by the Parties: (a) the Party initiating the procedure shall request FIDIC to appoint the DAAB Member(s); (b) FIDIC shall appoint such Member(s) within 14 days after receiving the request; and (c) the Parties shall be deemed to have accepted the appointment and shall promptly execute the DAAB Agreement.”
This one’s much more structured. Here’s what happens:
- If no DAAB is appointed within 28 days of the Contract Date, either Party can reach out directly to FIDIC.
- FIDIC then appoints the DAAB member(s)—whether it’s a sole member or a full panel—within 14 days.
- This appointment is automatically binding, and the Parties must sign the DAAB Agreement.
📌 Key upgrade? This doesn’t wait for failure to agree—it acts as a default timeline. DAAB setup isn’t optional or negotiable anymore.
3️⃣ Key Interpretations and Practical Implications
Let’s unpack the practical impact of these clauses with some nuance. Here’s where things get interesting.
✅ Common Ground
Both clauses:
- Set a deadline (28 days) for mutual agreement.
- Let an external party (typically FIDIC) step in to appoint someone.
- Prevent total gridlock in case of conflict.
But that’s where the similarities end.
🔄 Major Differences
| 📌 Feature | 1999 – Clause 20.3 | 2017 – Clause 21.2 |
|---|---|---|
| 📖 Board Name | DAB | DAAB |
| ⏰ Trigger | Failure to agree after 28 days | No appointment after 28 days (regardless of reason) |
| 👥 Board Type | Ad hoc or standing | Always standing |
| 🧾 Binding Language | Implied but unclear | Explicitly binding and requires DAAB Agreement |
| 🎯 Appointer | Named in contract or FIDIC | FIDIC (default, no alternatives) |
🚨 Risks and Real-World Implications
- 1999 Clause is reactive: It waits until there’s a problem. If both parties just avoid the DAB altogether, it might never happen.
- 2017 Clause is proactive: It’s structured to ensure that a DAAB exists from Day 1, minimizing delay and strengthening contract enforcement.
- Having a standing DAAB from the start in 2017 builds trust, continuity, and quick resolution capacity.
4️⃣ How These Clauses Link with Others
You’ll notice both clauses are part of a wider dispute resolution process, not stand-alone rules. Let’s trace the web:
🔗 1999 Edition:
- Clause 20.2 → Initial DAB appointment, which sets the framework for agreeing on the composition, role, and timelines related to the DAB. This is the jumping-off point where Parties are supposed to cooperate and initiate the dispute resolution structure before problems arise.
- Clause 20.3 → What if we don’t agree? This clause steps in when cooperation breaks down, offering a mechanism to bring in a third-party appointer and keep things moving. It adds resilience to the system by ensuring disagreement doesn’t paralyze the setup of the DAB.
- Clause 20.4–20.6 → These clauses cover what happens once the DAB is active: how decisions are rendered, the timeframe for amicable settlement efforts, and what leads to arbitration. They’re crucial for showing how the process continues beyond appointment, ensuring disputes are addressed in a structured, enforceable way.
🔗 2017 Edition:
- Clause 21.1 → The DAAB setup requirement, which emphasizes the early establishment of a standing dispute board. This clause sets the foundation for an ongoing and consistent presence of the DAAB throughout the project lifecycle—promoting dispute avoidance through continuous engagement rather than only stepping in when a conflict escalates.
- Clause 21.2 → What if setup fails? This clause acts as the fail-safe when the parties don’t fulfill the expectation of having a DAAB in place within 28 days. It ensures FIDIC can intervene and get a DAAB appointed so the dispute resolution mechanism doesn’t stall the project.
- Clause 21.4 → How disputes are referred to the DAAB. This details the procedure for bringing a formal dispute to the DAAB, including timelines, documentation, and how decisions are made. It’s a roadmap that keeps things orderly and predictable.
- Clause 21.8 → What if there’s no DAAB in place? (nice safety net here!) This provision acts as the backup parachute. If the DAAB has not yet been constituted or has ceased to exist, the clause outlines how disputes can still proceed without invalidating the contract’s dispute resolution framework. It’s crucial for maintaining contractual certainty.
📌 Cross-referencing makes it clear: these clauses work as part of a system, not in isolation.
5️⃣ Let’s Play Out Some “What If” Scenarios
🤔 Scenario 1: The Employer just… ignores the DAB setup.
- In 1999: The Contractor has to push hard—write to the appointing authority, chase the timeline, potentially face delay.
- In 2017: After 28 days, the Contractor can immediately trigger FIDIC’s appointment. No stalling.
🤔 Scenario 2: Parties can’t agree on who should sit on the Board.
- Both versions handle this. But in 2017, there’s no “let’s keep debating.” The FIDIC process keeps things moving.
🤔 Scenario 3: Appointing entity doesn’t respond.
- 1999: Unclear—no real fallback beyond possible arbitration.
- 2017: Much clearer—FIDIC must appoint within 14 days, and if that fails, parties may escalate under Clause 21.8.
6️⃣ Suggestions for Improvement
For the 1999 edition:
- 📌 Make the appointer’s decision explicitly binding.
- 🚨 Add a timeline for the parties to enter into a DAB Agreement.
- ❓ Clarify fallback if the appointing authority doesn’t act in time.
For the 2017 edition:
- ✅ Pretty solid already!
- But it might help to:
- Give more detail on what happens if FIDIC itself fails to act.
- Include a default DAAB Agreement form in the core clauses (currently in the appendix).
7️⃣ Final Takeaways 🧠
✅ Clause 20.3 (1999) is functional, but basic. It was never meant to drive DABs forward—just to rescue the process when it stalled.
✅ Clause 21.2 (2017) reflects a shift in contract philosophy: dispute boards are no longer optional tools—they’re essential infrastructure.
📌 Bottom Line?
If you’re working on a modern project and want smoother, quicker dispute resolution:
- The 2017 edition gives you clarity, structure, and enforceability.
- The 1999 edition needs more effort, more vigilance, and more proactive Parties to make it work.
✅ DAB/DAAB Appointment Checklist (Clause 20.3 – 1999 & Clause 21.2 – 2017)
📘 For FIDIC 1999 – Clause 20.3: Failure to Agree Dispute Adjudication Board
| Step | Checklist Item | Notes |
|---|---|---|
| 1️⃣ | Is a DAB required by the contract? | Confirm if it’s a standing or ad hoc DAB. |
| 2️⃣ | Have the parties tried to agree on the DAB member(s) within the 28-day period? | Start counting from when notice of a proposed appointment was served. |
| 3️⃣ | Has either party formally notified the appointing entity (or FIDIC if unnamed)? | Ensure the request is in writing and records are kept. |
| 4️⃣ | Has the appointing entity responded within 14 days? | If not, consider escalating or referencing contract dispute mechanisms. |
| 5️⃣ | Has the DAB appointment been accepted by both parties? | Ideally via signature on the DAB Agreement (even though not explicitly required). |
| 6️⃣ | Are all dispute resolution timelines tracked and logged? | Maintain a log of notices, responses, and decisions. |
🛠 Pro Tip: Keep templates ready for DAB notices and appointment requests to streamline the process.
📕 For FIDIC 2017 – Clause 21.2: Failure to Appoint DAAB Member(s)
| Step | Checklist Item | Notes |
|---|---|---|
| 1️⃣ | Has the DAAB been appointed within 28 days of the Contract Date? | This is a contractual requirement—track this deadline closely. |
| 2️⃣ | If not, has either party requested FIDIC to appoint the DAAB? | This is a direct request; no need for mutual agreement. |
| 3️⃣ | Has FIDIC confirmed the appointment within 14 days? | This is mandatory per the clause—track and follow up. |
| 4️⃣ | Have both parties signed the DAAB Agreement post-appointment? | The Agreement is binding and should be executed promptly. |
| 5️⃣ | Is the DAAB ready to operate from day one of the project? | Provide them with access to project documents and schedules. |
| 6️⃣ | Is there a plan for regular engagement with the DAAB (e.g., site visits, monthly check-ins)? | This supports dispute avoidance as per 2017 intent. |
📌 Bonus Tip: Add DAAB setup and engagement as a deliverable in your contract management plan.
📄 Sample Letters for Clause 20.3 (1999) and Clause 21.2 (2017)
📘 Sample Letter – FIDIC 1999: Request for Appointment of DAB under Clause 20.3
[Contractor’s/Employer’s Letterhead]
[Date]
To: [Appointing Entity or FIDIC Secretariat]
[Address]
Subject: Request for Appointment of Dispute Adjudication Board Member(s) – Clause 20.3, FIDIC Yellow Book 1999
Dear [Appointing Authority/FIDIC],
We refer to the Contract titled “[Contract Name/Number]” dated [Contract Date] between [Employer Name] and [Contractor Name], executed under the Conditions of Contract for Plant and Design-Build – First Edition 1999.
As per Sub-Clause 20.3 [Failure to Agree Dispute Adjudication Board], the Parties have been unable to agree on the appointment of the Dispute Adjudication Board (DAB) member(s) within the prescribed **28-day** period from the date of the initial proposal on [insert date].
Accordingly, we hereby request that you, as the designated appointing authority, proceed to appoint the DAB member(s) in accordance with Sub-Clause 20.3. Kindly consult both Parties and confirm the appointment within **14 days** of this request.
Please find attached:
- Copy of the Contract and relevant Particular Conditions
- Correspondence evidencing the failure to agree
- Proposed scope of services for the DAB
We thank you in advance for your prompt attention to this matter.
Yours faithfully,
[Signature]
[Name]
[Title]
[Company]
[Contact Information]
📕 Sample Letter – FIDIC 2017: Request for DAAB Appointment by FIDIC under Clause 21.2
[Contractor’s/Employer’s Letterhead]
[Date]
To: FIDIC Secretariat
FIDIC Appointing Authority
World Trade Center II
Geneva, Switzerland
[Or applicable address]
Subject: Request for Appointment of DAAB Member(s) – Clause 21.2, FIDIC Yellow Book 2017
Dear Sir/Madam,
We refer to the Contract titled “[Project Name/Contract Reference]” dated [Contract Date], executed under the Conditions of Contract for Plant and Design-Build – Second Edition 2017.
Pursuant to **Sub-Clause 21.2 [Failure to Appoint DAAB Member(s)]**, we hereby notify you that no Dispute Avoidance/Adjudication Board (DAAB) has been appointed within the required **28 days** from the Contract Date.
Accordingly, and in line with Sub-Clause 21.2, we request FIDIC to appoint the required DAAB Member(s) to constitute the Board. This request is being made in order to maintain compliance with the Contract and to ensure the availability of a functioning dispute resolution mechanism.
We attach the following documents for your reference:
- Copy of the executed Contract Agreement
- Relevant extracts from the Particular Conditions
- Correspondence evidencing non-appointment of the DAAB
Please confirm the appointment within **14 days** as per the clause requirements and advise on the next steps for executing the DAAB Agreement.
Thank you for your assistance.
Yours faithfully,
[Signature]
[Name]
[Title]
[Company Name]
[Email / Phone]