1️⃣ Purpose of the Clause
What are these clauses really for?
Picture this: you’re on a major infrastructure project. Deadlines are tight, expectations are high, and somewhere along the way—boom 💥—a disagreement erupts. It could be about delays, costs, quality, or any combination of these. What happens next?
That’s where Sub-Clause 20.4 (1999) and Sub-Clause 21.4 (2017) come into play. Both serve as the go-to procedures when parties reach an impasse. They provide a formal process to escalate a dispute to an independent body—the DAB (Dispute Adjudication Board) in 1999 or the DAAB (Dispute Avoidance/Adjudication Board) in 2017. These clauses offer structure, timing, and rules for seeking resolution without immediately jumping into arbitration.
Their core mission? 📌 Create a fast, interim-binding solution that lets the contract proceed uninterrupted while sorting out disputes in parallel. It’s all about keeping momentum without compromising fairness or due process.
Why did FIDIC change things in 2017?
Over time, it became clear that parties weren’t using the DAB enough—or at least not effectively. Instead of resolving disputes early, many issues escalated quickly to arbitration. FIDIC noticed this trend and decided to reshape the process by:
- Renaming the board to DAAB to emphasize its preventive as well as adjudicative role.
- Expanding the clause to offer detailed steps for referrals.
- Introducing more flexibility, such as allowing partial dissatisfaction.
The shift shows FIDIC’s evolving philosophy: from reactive to proactive contract management.
2️⃣ Breakdown of the Clauses
📘 FIDIC 1999 – Clause 20.4
Clause Text (Extract): “If a dispute (of any kind whatsoever) arises between the Parties in connection with, or arising out of, the Contract or the execution of the Works, including any dispute as to any certificate, determination, instruction, opinion or valuation of the Engineer, either Party may refer the dispute in writing to the DAB for its decision.”
- A Party can submit a dispute in writing to the DAB, copying the Engineer.
- The DAB is given 84 days to issue a reasoned decision. That’s not a suggestion—it’s a contractual commitment.
- “The DAB shall give its decision in writing to both Parties… the decision shall be binding on both Parties who shall promptly give effect to it unless and until it shall be revised in an amicable settlement or an arbitral award.”
- If a Party disagrees, they must submit a Notice of Dissatisfaction (NoD) within 28 days: “Either Party may, within 28 days after receiving the DAB’s decision, give notice to the other Party of its dissatisfaction with the decision.”
- If that NoD isn’t filed in time, the decision becomes final and binding: “If the DAB has given its decision… and no notice of dissatisfaction has been given… the decision shall become final and binding.”
- Most critically, the contract must keep moving—work doesn’t stop just because a dispute exists.
What’s missing? There’s little detail on how to structure a referral, what to include, or how to handle partial disagreement.
📙 FIDIC 2017 – Sub-Clause 21.4
Clause 21.4.1 – Reference of a Dispute to the DAAB: “If a dispute arises, the claiming Party may refer the dispute in writing to the DAAB for its decision… The reference shall include: (a) a description of the Dispute; (b) a summary of the Party’s position and the relief sought; and (c) copies of relevant communications and documents.”
- Disputes can be referred after the Engineer has made a determination, or if no determination is given within the allowed time.
Clause 21.4.2 – The Parties’ Obligations After the Reference: “Each Party shall submit to the DAAB such further information as the DAAB may reasonably require. The Parties shall comply with any reasonable request made by the DAAB… and shall proceed with the performance of its obligations under the Contract.”
- Parties must now engage proactively with the DAAB: respond to questions, provide documents, attend meetings.
- And yes, performance must continue—it’s business as usual.
Clause 21.4.3 – The DAAB’s Decision: “Within 84 days after receiving the reference… the DAAB shall give its decision in writing… unless extended by agreement of the Parties.”
- The DAAB has the same 84-day window—but can pause the timeline if fees aren’t paid.
- Their decision must be reasoned and clear.
Clause 21.4.4 – Dissatisfaction with DAAB’s Decision: “If either Party is dissatisfied… it may give a Notice of Dissatisfaction… specifying the matter(s) with which it disagrees. If a Party fails to give a Notice of Dissatisfaction within 28 days, the DAAB’s decision shall become final and binding.”
- A Party can object by issuing a NoD within 28 days.
- Must specify exactly what’s being challenged.
- The rest? ✅ It becomes final.
This modular breakdown offers predictability and avoids unnecessary re-litigation of resolved elements.
3️⃣ Key Interpretations and Implications
Let’s dive into what all this really means for the folks on the ground—Contractors, Employers, Engineers, and legal teams. These clauses aren’t just legal boilerplate—they actively shape how you navigate disputes and keep the project moving.
🚨 What are the essential takeaways?
⏱️ Timelines Are Sacred
In both the 1999 and 2017 editions, strict timelines govern how quickly parties must act after a DA(B)/DAAB decision is issued. If you miss that 28-day window to file a Notice of Dissatisfaction (NoD), you’ve effectively agreed to the decision—even if you strongly disagree. There’s no do-over. It becomes final and binding, no matter how flawed you think it is.
The 2017 edition sharpens this even more by requiring the NoD to pinpoint the exact parts of the decision you’re dissatisfied with. Everything else? Automatically final. That means there’s no reopening the whole case unless you said so upfront. It’s a strategic and procedural shift: plan your objections carefully.
🔁 Continue Performance—No Excuses
Both versions state loud and clear: even during a dispute, the work must go on. Clause 20.4 (1999) and Sub-Clause 21.4 (2017) require both parties to continue performing their contractual duties while the DA(B)/DAAB is handling the issue. This is absolutely essential for progress:
“The decision shall be binding… and the Parties shall promptly give effect to it.” – Clause 20.4 (1999)
“The Parties shall proceed with the performance of their obligations under the Contract.” – Sub-Clause 21.4.2 (2017)
Imagine if this clause didn’t exist—one dispute could freeze an entire project. FIDIC wisely says: resolve disputes in parallel, don’t let them derail the schedule.
🎯 Partial Dissatisfaction—A Smart 2017 Upgrade
Here’s where the 2017 version pulls ahead. Previously, in the 1999 edition, if you had a dispute with one part of a decision, your only real option was to issue a full NoD. That risked re-opening everything—even the parts you agreed with.
Now, Sub-Clause 21.4.4 allows you to surgically challenge just the contentious part:
“The NoD shall state that it is given under this Sub-Clause, and shall specify the matter(s) in the DAAB’s decision with which the dissatisfied Party disagrees.”
The benefit? Finality for uncontested issues = faster closure and less cost. It’s a win-win.
🔍 The DAAB Is Not an Arbitrator
This is a subtle but vital distinction. The DAAB is not there to make final rulings in the same way an arbitrator or court would. Its decisions are interim-binding, not final unless there’s no NoD. Why does this matter?
- It means the DAAB is a contractual mechanism, not a legal body.
- Its goal is to issue decisions quickly to prevent delays.
- It can’t award damages beyond the contract or set precedent.
This limits scope but increases speed and affordability.
💸 Security for Compliance – An Added Layer in 2017
Sub-Clause 21.4.3 (2017) gives the DAAB a unique new power:
“If the DAAB considers that a Party might not comply with its decision, it may require the Party to provide security…”
Think about that: if the DAAB suspects one side won’t pay up, it can preemptively protect the other party. This is a proactive enforcement tool—one that reflects real-world dynamics, especially in high-risk projects or cross-border contracts.
✅ So What’s the Big Picture?
These clauses may seem procedural, but they pack a punch:
- They promote fast, fair resolution without slowing work.
- They reward parties who act quickly and clearly.
- They evolve from general guidance (1999) to a more legal-precision toolkit (2017).
4️⃣ Cross-Referencing with Other Clauses
Alright, now let’s talk about how these clauses don’t just live in a vacuum—they actually lean on, support, and trigger other parts of the contract. If you try to interpret Clause 20.4 (1999) or Sub-Clause 21.4 (2017) on their own, you’ll miss a huge part of the picture. These dispute mechanisms are deeply interconnected with other processes, especially those involving the Engineer’s determinations and the setup of the dispute boards themselves.
🔗 FIDIC 1999 Edition
Let’s start with the 1999 Yellow Book. Here, Clause 20.4 assumes that a DAB is already in place, which links directly back to:
- Clause 20.2 – Appointment of the DAB: Without this clause, you have no dispute board to turn to. This clause outlines how the DAB should be appointed at the beginning of the contract or on an ad-hoc basis for a specific dispute. If parties don’t agree on the members, the appointment process can become its own mini-dispute.
- Clause 20.5 – Amicable Settlement: After the DAB decision (if a NoD is issued), this clause kicks in. It requires the parties to attempt to resolve the dispute amicably before heading to arbitration. It’s a cooling-off period meant to encourage settlement.
- Clause 20.7 – Failure to Comply with DAB’s Decision: This clause acts as the enforcement trigger. If a party doesn’t comply with the DAB’s decision, the other party can go straight to arbitration for enforcement.
So you see? Clause 20.4 is the middle step in a larger dance—it follows setup and precedes enforcement or resolution.
🔗 FIDIC 2017 Edition
Now let’s move to the 2017 Yellow Book, where the process is far more nuanced and integrated.
- Sub-Clause 3.7 – Agreement or Determination by the Engineer: This clause is essential because, in most cases, you cannot refer a dispute to the DAAB unless it has first gone through the Engineer’s hands. The Engineer must first try to help the parties reach agreement. If no agreement is reached, the Engineer issues a determination. Only after this step (or if there’s inaction) can Sub-Clause 21.4 kick in.
- Sub-Clause 21.1 – Constitution of the DAAB: This is the structural backbone. It ensures the DAAB is appointed and ready from the start. Unlike 1999, where the DAB could be ad-hoc, 2017 assumes a standing DAAB that gets involved early and often. This is crucial for the “Avoidance” part of their job.
- Sub-Clause 21.2 – Failure to Appoint DAAB Member(s): If the DAAB isn’t appointed, this clause helps resolve that administrative hurdle. Without this in place, Sub-Clause 21.4 becomes almost unusable.
- Sub-Clause 21.7 – Failure to Comply with DAAB’s Decision: Think of this as the contract’s muscle. If a party refuses to follow the DAAB’s decision, the other party doesn’t have to sit on their hands—they can escalate directly to arbitration.
- Sub-Clause 21.8 – No DAAB in Place: Sometimes, disputes arise before the DAAB is formally established. This clause outlines how the parties can still resolve disputes in such scenarios, either by appointing a DAAB retroactively or heading to arbitration with safeguards.
🧠 So What’s the Practical Impact?
The cross-referencing shows that these clauses are part of a larger ecosystem. You need:
- An appointed board (Clause 20.2 / 21.1)
- An Engineer’s decision or silence (Clause 3.7 in 2017)
- A process for escalation and enforcement (Clauses 20.5–20.7 / 21.7–21.8)
And don’t forget, other sections of the contract—like those on claims (Clause 20.1 in 1999, Clause 20.2 in 2017)—can also tie in here, depending on the origin of the dispute.
📌 The takeaway? Reading Clause 20.4 or Sub-Clause 21.4 in isolation is like trying to watch one scene of a movie and thinking you’ve understood the whole plot. You’ve got to see the bigger picture to grasp the strategy, timelines, and rights you’re working with.
So, these clauses aren’t standalone—they form a web of interconnected responsibilities and procedures that guide how disputes are handled end-to-end.
5️⃣ What-If Scenarios
Alright, time for a mental workout! Let’s put these clauses to the test with some practical “what-if” situations. These scenarios help reveal the strengths, gaps, and quirks of Clause 20.4 (1999) and Sub-Clause 21.4 (2017). Think of them like drills for your dispute resolution toolkit 🧰.
❓ What if the DAAB doesn’t issue a decision within 84 days?
Let’s say you’ve referred a dispute to the DAB or DAAB, and… crickets 🦗. The clock ticks past 84 days. Now what?
- 1999: The clause isn’t super clear. You might assume the DAB has failed to decide and then move ahead by issuing a Notice of Dissatisfaction (NoD) based on the delay. But it’s murky—there’s no formal fallback process.
- 2017: FIDIC got smarter here. Sub-Clause 21.4.3 gives the DAAB a bit of leeway—if the delay is due to unpaid fees, they can suspend their work. But if the deadline is simply missed without agreement, you can issue a NoD and trigger the next steps. It’s cleaner, more structured, and respects everyone’s time.
✅ Takeaway: 2017 wins on clarity. Always check if the delay was due to procedural issues like fee non-payment.
❓ Can a Party say, “I disagree with only one part”?
This is where the 2017 edition really flexes its muscle.
- 1999: Unfortunately, no clear provision for partial disagreement. If you issue a NoD, it’s not clear whether it applies to part or all of the decision. That uncertainty means you might inadvertently re-open the whole dispute—even the parts you agree with.
- 2017: Crystal clear! Sub-Clause 21.4.4 lets you pinpoint the parts of the decision you don’t like. Everything else? It’s settled, final, and off the table.
✅ Takeaway: In 2017, you can be surgical. Dispute what matters, lock in the rest. Much more efficient, and reduces unnecessary litigation.
❓ What happens if one party simply ignores the DAAB’s decision?
Let’s say the DAAB rules in favor of the Contractor. The Employer is supposed to pay—but they ghost you. What now?
- Both versions let you go to arbitration to enforce the decision.
- 1999 Clause 20.7 and 2017 Clause 21.7 make it clear: DAAB decisions must be followed, or the aggrieved party can escalate. In both cases, the decision remains binding while waiting for arbitration—even if one party isn’t happy about it.
✅ Takeaway: You’ve got enforcement rights. But remember: in 2017, the DAAB can even require the other party to provide security in advance if non-compliance seems likely.
❓ Can you refer a dispute to the DAAB before the Engineer issues a determination?
This one’s all about sequencing 🕰️.
- 1999: The Engineer’s role in dispute resolution is less defined. You can often go straight to the DAB without waiting for an Engineer determination—especially if the dispute is urgent or clearly outside the Engineer’s purview.
- 2017: Nope. Sub-Clause 3.7 makes it clear: the Engineer must first try to facilitate an agreement or issue a determination. Only if that step fails (or the Engineer doesn’t respond within the timeline) can you escalate to the DAAB.
✅ Takeaway: 2017 enforces discipline in dispute progression. You need to complete the prior steps first.
❓ What if the DAAB decision requires action that’s difficult to reverse—like demolition?
Let’s say the DAAB orders demolition of a structure as a remedy. But the Employer files a NoD. Should the Contractor act anyway?
- Both clauses state that decisions are binding immediately and must be followed, unless/until revised through amicable settlement or arbitration.
- However, in practical terms, such drastic actions might warrant a temporary pause pending agreement—or the parties may agree to suspend execution while arbitration is pending.
✅ Takeaway: Legally, the decision is binding. But practically? The parties might negotiate a temporary freeze to avoid irreversible harm.
📌 These scenarios remind us: the DAAB isn’t just a theoretical concept—it’s a real-time engine for solving disputes. And like any engine, it needs fuel (clear referrals), maintenance (cooperative parties), and a skilled driver (the contract administrator who understands all the moving parts).
Want to keep building the strategy? Let’s move on to suggestions for making all of this even better…
6️⃣ Suggestions for Clarity and Improvement
Let’s take a step back and ask: how can these clauses be even better? They’re pretty solid, especially in the 2017 version—but anyone who has lived through a contract dispute knows that even the smallest ambiguity can lead to massive friction. Here’s a closer look at how we could tighten things up, improve user-friendliness, and increase compliance.
🔧 For FIDIC 1999 – Let’s Modernize This Classic
The 1999 clause is functional, but it feels a bit outdated compared to the 2017 edition. Here’s how it could be improved:
🎯 Add Guidelines for Partial NoD
One of the most common real-world scenarios is partial agreement with a DAB decision. But Clause 20.4 offers no clear path for that. Adding a line like:
“A Party may issue a Notice of Dissatisfaction in respect of part of the decision…”
…would clear up a ton of confusion and avoid unnecessary disputes over the scope of a NoD.
📄 Provide a Standard Referral Format
The 1999 clause is vague about what a referral to the DAB should include. This leads to inconsistent practices. FIDIC could provide an annexed template for referrals including:
- Summary of the dispute
- Key facts
- Contract references
- Relief sought
This would help parties present focused, actionable disputes.
🕓 Include Suspension Rules for DAB Member Absence
What if the DAB can’t act due to a resignation, illness, or delay in fee payment? Clause 20.4 doesn’t say. A provision to suspend timelines in these events would add much-needed resilience.
🔧 For FIDIC 2017 – Nearly There, But Let’s Polish It
The 2017 edition is a huge improvement, but no clause is perfect. Here’s how FIDIC can further raise the bar:
📁 Push for Digital Submissions and DAAB Portals
Many DAAB referrals still involve emailed PDFs or paper packages. This slows things down. Including a clause like:
“Referrals and responses may be submitted via a secure, shared platform approved by the Parties and the DAAB.”
…would bring the process into the digital age. This is especially helpful in international contracts or when dealing with document-heavy disputes.
🧭 Clarify the DAAB’s Preventive Role
The “Avoidance” part of the DAAB’s name implies they should help stop disputes before they escalate. But their preventive role is still a little vague. A paragraph spelling out examples—like early warning notices, regular check-ins, or mediation-style interventions—would help clarify how this role should be fulfilled.
🛠️ Add Optional Mediation Tier
For especially thorny or high-stakes disputes, jumping straight from DAAB to arbitration may be too abrupt. A new sub-clause could allow for optional mediation, such as:
“Following the DAAB’s decision, the Parties may agree to engage in formal mediation before proceeding to arbitration.”
This bridges the gap between DAAB and arbitration, often reducing cost and preserving relationships.
🧠 Big Picture Suggestions Across Both Editions
Regardless of which version you’re using, here are universal improvements:
- 📚 Glossary of Dispute Terms: Not everyone interprets terms like “dispute”, “decision”, and “referral” the same way. A glossary or definitions annex could prevent miscommunication.
- 🔍 Examples of Proper NoD Language: Real-life samples of well-drafted NoDs could help prevent procedural disputes.
- ⏳ Clear Clock-Start Triggers: Ensure everyone knows exactly when the 28-day and 84-day clocks begin—receipt of decision? Notification? Postal delivery? Remove ambiguity.
These tweaks would make dispute resolution even smoother, more transparent, and less open to manipulation or delay. FIDIC has done a great job evolving between 1999 and 2017—this is just about pushing it from “great” to “gold standard.”
7️⃣ Final Takeaways
We’ve gone on quite a journey—dissecting Clause 20.4 from the 1999 Yellow Book and its updated cousin, Sub-Clause 21.4 from the 2017 edition. So, what should Contractors, Employers, and Engineers walk away with? Let’s zoom out and distill the big lessons, in a way that’s easy to remember and apply.
🧩 Key Differences at a Glance
Here’s a side-by-side snapshot of the two clauses:
| Feature | 1999 Clause 20.4 | 2017 Sub-Clause 21.4 |
|---|---|---|
| Board Title | DAB | DAAB (Avoidance + Adjudication) |
| Decision Timeframe | 84 days | 84 days |
| NoD Deadline | 28 days | 28 days |
| Partial NoD? | ❌ Not addressed | ✅ Yes, clearly allowed |
| Must Continue Work? | ✅ Yes | ✅ Yes |
| Submission Requirements | Vague | Very detailed |
| Structured Breakdown | Minimal | Modular and robust |
| Preventive Role | No | Yes (though not fully defined) |
| Enforcement Support | General | Includes security for compliance |
🧠 Strategic Takeaways
- If you’re working under 1999, you need to be extra careful about how you draft your NoD, what you include in your referral, and how you handle partial disputes. There’s less guidance, so the risk of procedural mistakes is higher.
- If you’re under the 2017 edition, embrace the structure. The clearer you are in your submissions and notices, the stronger your position becomes. Use the DAAB not just as a referee, but as a partner in keeping things on track.
💬 Practical Wisdom for Contract Managers
- Always track your dates. 28 days for a NoD. 84 days for a decision. Don’t guess—calendar it!
- Make sure the DAAB is properly constituted early. Don’t wait until a dispute hits.
- Use the DAAB’s preventive role—schedule regular check-ins, flag issues early, and consider their feedback as part of ongoing project health checks.
- If you’re unsure whether to refer a dispute or issue a NoD, seek advice early. Once timelines lapse, there’s no rewind button.
🏁 Final Thought
The journey from 1999 to 2017 reflects FIDIC’s own evolution—from a framework built on experience to one built on precision and foresight. Whether you’re interpreting a clause, managing a live dispute, or drafting an agreement—understanding these tools isn’t just about compliance. It’s about control, confidence, and clarity in your project.
✅ The 1999 edition gave us a solid foundation. ✅ The 2017 edition gives us a strategic advantage.
And that’s the ultimate goal: to resolve disputes quickly, fairly, and without losing momentum. Because in complex projects, clarity isn’t optional—it’s contractual survival.**
Questions
So can a party refer to DAAB without first consulting to Engineer?
📘 Under FIDIC 1999 – Clause 20.4:
✅ Yes, a party can refer a dispute directly to the DAB without first obtaining a determination from the Engineer.
There’s no formal requirement in Clause 20.4 that the dispute must pass through the Engineer before reaching the DAB. While in practice many disputes do go through the Engineer (especially those arising from Engineer-issued instructions or certificates), the clause allows direct access to the DAB.
🔹 This gives the parties flexibility but can sometimes lead to skipping collaborative dispute mitigation steps.
📙 Under FIDIC 2017 – Sub-Clause 21.4:
🚫 No, generally a party cannot refer a dispute to the DAAB without first going through the Engineer’s process—unless an exception applies.
According to Sub-Clause 21.4.1, a dispute may be referred to the DAAB only after:
- The Engineer has issued a determination under Sub-Clause 3.7, or
- The Engineer fails to issue a determination within the allowed timeframe (usually 42 days).
🔍 This requirement reinforces the Engineer’s central role in early dispute resolution and ensures DAAB intervention only after this step is exhausted.
However, there are exceptions, such as:
- Where a notice of termination has been issued (Sub-Clause 21.4.1 allows referral of certain disputes without Engineer determination),
- Or where urgent matters (like serious contractual breaches or payment failures) demand immediate DAAB attention and the Engineer’s delay is obstructive.
🎯 Final Takeaway:
- 1999 = more flexibility, but less structured process.
- 2017 = more disciplined route, prioritizing Engineer involvement and structured escalation.
📝 What is a Notice of Dissatisfaction (NoD)?
A NoD is the formal notice a party must issue if they disagree with the DAB/DAAB’s decision. It’s a critical procedural step that:
- Preserves your right to arbitrate, and
- Prevents the decision from becoming final and binding.
Miss it—and you’re stuck with the decision forever. So let’s compare the rules:
📘 FIDIC 1999 – Clause 20.4
✅ NoD Highlights:
- Must be issued within 28 days after receiving the DAB decision.
- No requirement to specify which part of the decision you disagree with.
- If no NoD is issued, the DAB’s decision becomes final and binding.
🚨 Key Implications:
- The lack of detail means that even partial dissatisfaction triggers full reopening—you can’t separate issues.
- Ambiguity often causes procedural disputes: did the NoD cover everything? Was it valid?
- You could end up re-litigating issues both parties actually agreed on!
📙 FIDIC 2017 – Sub-Clause 21.4.4
✅ NoD Highlights:
- Still must be issued within 28 days after the DAAB decision.
- Must specify exactly what parts of the decision you disagree with.
- Only the disputed portions are reopened in arbitration.
- The undisputed parts become automatically final and binding.
🧠 Practical Improvements:
- ✅ Far more precise and fair—only genuine disputes continue.
- ✅ Promotes efficiency—avoids rehashing settled issues.
- ✅ Parties can strategize around what to accept and what to contest.
“The NoD shall state that it is given under this Sub-Clause and shall specify the matter(s) in the DAAB’s decision with which the dissatisfied Party disagrees.” – Sub-Clause 21.4.4
🔁 Comparing Both Editions:
| Aspect | FIDIC 1999 (Clause 20.4) | FIDIC 2017 (Sub-Clause 21.4.4) |
|---|---|---|
| Deadline | 28 days | 28 days |
| Content of NoD | No specific content required | Must specify disputed issues |
| Effect if NoD is missed | Entire decision becomes binding | Same |
| Partial dissatisfaction? | ❌ Not formally recognized | ✅ Clearly allowed |
| Risk of procedural errors | High (due to vagueness) | Lower (due to structured requirements) |
🚨 What Happens If a Party Issues a NoD to the Engineer’s Determination but Does NOT Refer the Dispute to the DAAB?
📌 Short Answer:
If a party fails to refer the dispute to the DAAB within the time allowed, even after issuing a NoD to the Engineer’s determination, the right to escalate the dispute is lost, and the Engineer’s determination becomes final and binding.
🧾 Let’s Break it Down:
- Engineer Issues a Determination (Sub-Clause 3.7)
- The Engineer consults with the Parties and makes a formal determination within 42 days.
- Party Disagrees and Issues a NoD to the Other Party
- The Party has 28 days to issue a Notice of Dissatisfaction.
- Then What? Referral to DAAB is Required (Sub-Clause 21.4.1)
- The Party must refer the dispute to the DAAB within 42 days after issuing the NoD (see Sub-Clause 21.4.1, last paragraph).
- If the dispute is not referred to the DAAB within this time, the NoD becomes ineffective, and the Engineer’s determination becomes binding and enforceable.
📅 Timing Recap:
| Action | Deadline |
|---|---|
| Engineer’s determination issued | Day 0 |
| Party issues NoD to other party | Within 28 days (max) |
| Party refers dispute to DAAB | Within 42 days after NoD |
⚠️ Consequences of Inaction:
- The Engineer’s determination stands, even if it’s clearly wrong.
- You cannot go to the DAAB or arbitration on the same issue.
- The NoD is treated as abandoned or procedurally invalid.
- You lose the dispute—on a technicality.
🧠 Practical Example:
Contractor receives Engineer’s determination rejecting an EOT claim. Contractor issues a NoD on Day 20. But they wait 60 days before referring to the DAAB. Result? 🚫 The dispute cannot be referred. The Engineer’s decision is final.
✅ Final Takeaway:
📌 Issuing a NoD to the Engineer is just step one. To preserve your rights:
- You must follow through with a formal DAAB referral within 42 days.
- Failing to do so is a fatal procedural flaw—no arbitration, no DAAB, no claim.
🕓 What Happens If the Engineer Fails to Issue a Determination Within 42 Days?
Under Sub-Clause 3.7.3 of the FIDIC 2017 Yellow Book:
“If the Engineer does not give the determination within such time limit, then either Party may consider that the Engineer has failed to make a determination, and the Dispute shall be deemed to have arisen.”
🔍 Translation:
If the Engineer doesn’t issue a determination within 42 days (or any agreed extension), the claim automatically becomes a “Dispute.”
📌 What Can the Party Do Then?
➡️ The Party may refer the dispute directly to the DAAB, under Sub-Clause 21.4.1.
So even though there’s no formal determination, the process doesn’t stall. Instead:
- The 42-day window lapses ⏱️
- A Dispute is deemed to exist 📄
- The Party may proceed to submit a referral to the DAAB 📨
✅ Key Takeaways:
| Scenario | Result |
|---|---|
| Engineer issues determination on time | Party can issue NoD within 28 days → Then refer to DAAB |
| Engineer fails to issue determination | Dispute deemed to exist → Party can go directly to DAAB |
🧠 Pro Tip:
Even if the Engineer delays, the claiming Party should not delay. The referral to the DAAB should happen promptly after the 42-day period ends to avoid objections around timeliness or waiver of rights.
FIDIC anticipates that the Engineer might become a bottleneck—and gives the Parties a procedural exit ramp to keep disputes moving forward.
Sample Letters
📩 1. Sample Referral Letter to the DAB/DAAB
Subject: Referral of Dispute to the Dispute Adjudication/Avoidance Board (DAB/DAAB)
To: [Chairperson or Member of DAB/DAAB]
Cc: [Engineer], [Opposing Party Representative]
Date: [Insert Date]
Dear [Title and Name],
In accordance with Clause 20.4 of the FIDIC Conditions of Contract (1999 Edition) / Sub-Clause 21.4.1 of the FIDIC Conditions of Contract (2017 Edition), we hereby refer a dispute to the DAB/DAAB for decision.
Details of the Dispute:
- Contract Name: [Insert Contract Title]
- Parties: [Contractor] and [Employer]
- Description: [Brief description of the dispute—e.g., EOT claim, payment issue]
- Date of Dispute: [Insert Date]
- Engineer’s Determination (if applicable): [Include reference or state ‘not issued’]
- Contract Clauses Involved: [List relevant clauses]
Relief Sought: We respectfully request that the DAB/DAAB determine the entitlement to [specific relief, e.g., additional payment of USD 350,000 and/or extension of time of 45 days].
Please find enclosed the following supporting documents:
- [Copy of claim and supporting correspondence]
- [Engineer’s determination or related communication]
- [Programme impacts/Cost calculations]
We remain available to provide any additional documents or attend meetings as may be required.
Yours sincerely,
[Name]
[Position]
[Company Name]
📩 2. Sample Notice of Dissatisfaction (NoD)
Subject: Notice of Dissatisfaction with DAB/DAAB Decision – Contract [Name]
To: [Other Party’s Name]
Cc: [DAB/DAAB], [Engineer]
Date: [Insert Date – must be within 28 days of decision]
Dear [Recipient’s Name],
We refer to the decision of the DAB/DAAB dated [insert date], rendered pursuant to Clause 20.4 of the FIDIC Conditions of Contract (1999 Edition) / Sub-Clause 21.4.3 of the 2017 Edition.
In accordance with Clause 20.4 / Sub-Clause 21.4.4, we hereby give formal Notice of Dissatisfaction with the following aspects of the decision:
- [Specify exact elements in dispute – e.g., rejection of time extension entitlement, valuation of variation]
- [State any legal or contractual grounds for dissatisfaction]
We reserve our right to refer the dispute to arbitration should an amicable settlement not be reached.
This notice is issued within the prescribed 28-day period, and we continue to perform our obligations under the Contract.
Yours faithfully,
[Name]
[Position]
[Company Name]
📩 3. Sample Acknowledgement of DAAB Decision (Partial or Full Acceptance)
Subject: Acknowledgement of DAAB Decision – Reference [Insert]
To: [Other Party]
Cc: [DAAB], [Engineer]
Date: [Insert Date]
Dear [Recipient’s Name],
We acknowledge receipt of the DAAB’s decision dated [insert date], issued under Sub-Clause 21.4.3 of the Contract.
We wish to confirm the following:
- We accept the decision regarding [state which aspects].
- However, we reserve the right to issue a Notice of Dissatisfaction regarding [optional – specify elements, if any].
Please be advised that we will comply with the applicable parts of the decision and remain committed to continuing with the performance of the Contract.
Sincerely,
[Name]
[Position]
[Company Name]
Checklists
✅ Clause 20.4 – FIDIC 1999: DAB Checklist
| ✅ | Stage | Checklist Item |
|---|---|---|
| ⬜ | 🔍 Pre-Referral | DAB properly appointed (Clause 20.2) |
| ⬜ | Dispute identified under the Contract | |
| ⬜ | Escalation to Engineer and/or Employer attempted | |
| ⬜ | Prepare written referral (dispute description, clause references, documents) | |
| ⬜ | Copy referral to the Engineer | |
| ⬜ | 📅 During DAB Process | Confirm DAB received referral |
| ⬜ | Track the 84-day decision period | |
| ⬜ | Cooperate with DAB (submit documents, attend meetings, etc.) | |
| ⬜ | Continue performing all contract obligations | |
| ⬜ | 📬 After DAB Decision | Review decision in detail |
| ⬜ | If satisfied: comply with decision | |
| ⬜ | If dissatisfied: issue Notice of Dissatisfaction within 28 days | |
| ⬜ | Include clear grounds and scope of dissatisfaction | |
| ⬜ | If no NoD issued: accept decision as final and binding |
✅ Sub-Clause 21.4 – FIDIC 2017: DAAB Checklist
| ✅ | Stage | Checklist Item |
|---|---|---|
| ⬜ | 🔍 Pre-Referral | Engineer’s determination issued or 42-day deadline expired (Sub-Clause 3.7) |
| ⬜ | DAAB appointed and operational (Sub-Clause 21.1) | |
| ⬜ | Dispute clearly defined (factual + contractual basis) | |
| ⬜ | Referral includes all required elements (21.4.1: description, position, remedy) | |
| ⬜ | 📅 Post-Referral | Respond to DAAB info requests (Sub-Clause 21.4.2) |
| ⬜ | Attend meetings, hearings, or inspections if needed | |
| ⬜ | Ensure DAAB fees are paid to avoid suspension | |
| ⬜ | Continue contract obligations during proceedings | |
| ⬜ | 📬 After DAAB Decision | Confirm decision issued within 84 days |
| ⬜ | Review content and implications of decision | |
| ⬜ | If satisfied: fully implement decision | |
| ⬜ | If dissatisfied: issue Notice of Dissatisfaction within 28 days | |
| ⬜ | Specify exact disputed matters (Sub-Clause 21.4.4) | |
| ⬜ | Accept uncontested parts as final and binding | |
| ⬜ | Optionally trigger amicable settlement (Sub-Clause 21.5) | |
| ⬜ | Prepare for arbitration if needed (Clause 21.6) |
Sequence Diagram
