76 / 100

SEO Score

Views in the last 30 days: 81

Estimated read time: 7 minute(s)

FIDIC Clause 20.5 (1999) vs 21.3 (2017) – Amicable Settlement & Dispute Avoidance

Table of Contents

Clause 20.5 (1999) vs Clause 21.3 (2017)

Amicable Settlement “cool-down” vs. DAAB-led dispute avoidance

1999 • Amicable Settlement 2017 • Dispute Avoidance

Waiting Period (1999)56 days

DAAB help (2017)Any time

Advice binding?Non-binding (informal)

Purpose of the Clause

Let’s start by understanding why these clauses even exist.

1999 • Clause 20.5

🧾 Clause 20.5 (1999) – The “Cool-Down” Clause

This clause was designed as a mandatory cooling-off period. Once a party says, “I don’t accept the DAB’s decision” (by issuing a Notice of Dissatisfaction), FIDIC tells both parties, “Alright, pause. Take 56 days to try and talk it out before jumping into arbitration.”

It’s a good-faith nudge toward negotiation. But here’s the catch—it’s not enforced. Even if the parties just sit there and do nothing for 56 days, they’re free to proceed to arbitration. So while it sounds cooperative, it’s more of a procedural speed bump than a genuine attempt at resolution.

📜 1999 Clause 20.5 – Full Text (tap to expand)

“Where notice of dissatisfaction has been given under Sub-Clause 20.4 above, both Parties shall attempt to settle the dispute amicably before the commencement of arbitration. However, unless both Parties agree otherwise, arbitration may be commenced on or after the fifty-sixth day after the day on which notice of dissatisfaction was given, even if no attempt at amicable settlement has been made.”
Source: FIDIC 1999, Sub-Clause 20.5 (Amicable Settlement)

Where notice of dissatisfaction has been given under Sub-Clause 20.4 above, both Parties shall attempt to settle the dispute amicably before the commencement of arbitration. However, unless both Parties agree otherwise, arbitration may be commenced on or after the fifty-sixth day after the day on which notice of dissatisfaction was given, even if no attempt at amicable settlement has been made.

2017 • Clause 21.3

🤝 Clause 21.3 (2017) – The “Let’s Fix This Early” Clause

FIDIC took a big leap in 2017. Instead of waiting until a full-blown dispute erupts, Clause 21.3 brings the DAAB in before things go off the rails—more like relationship counseling than courtroom drama.

In short:
1999: “Talk it out, if you feel like it.”
2017: “Let’s not even get to the fighting stage.”

📘 2017 Clause 21.3 – Key Provisions (tap to expand)

The DAAB can be involved at any time, not just after disputes arise.
It’s voluntary—both parties make a joint request.
DAAB can offer advice, facilitate dialogue, and help clarify misunderstandings.
Informal DAAB advice is non-binding.

Extracted and paraphrased from FIDIC 2017, Sub-Clause 21.3 (Avoidance of Disputes).

🚨 What this means in practice (1999)

•No incentive to genuinely attempt resolution during the 56-day pause.
•DAB’s role ends after issuing its decision.
•Disputes often jump straight to arbitration.
•Reactive posture—problems tackled only after they escalate.

✅ What this enables (2017)

✓Encourages dialogue before issues harden into disputes.
✓Keeps the DAAB engaged throughout the project lifecycle.
✓Reduces cost and time spent on arbitration.
✓Builds trust via early, facilitated resolution.

⏱️ The 56-Day “Cool-Down” (1999)

Trigger: Notice of Dissatisfaction (NoD) is issued under 20.4 → 56 days → arbitration can commence, even if no amicable talks occurred.

Day 0 (NoD)Day 56 (Arbitration may start)

🛠️ DAAB Early Involvement Flow (2017)

Sub-Clause 21.3 allows DAAB to assist anytime, on a joint request or by inviting one.

Key terms at a glance

DAB – Dispute Adjudication Board (1999) DAAB – Dispute Avoidance/Adjudication Board (2017) NoD – Notice of Dissatisfaction Amicable settlement – 56-day window Informal assistance – Non-binding advice

Quick check: which clause pushes for early avoidance?

Clause 20.5 (1999)

Clause 21.3 (2017)

Disclaimer: Educational summary. Always read the Contract Particulars and applicable FIDIC book in full before acting.

Clause 20.5 (1999): Amicable Settlement – Interactive Flow

Clause 20.5 (1999): Amicable Settlement – Flow & Guide

A practical walkthrough of the 56-day negotiation period after a Notice of Dissatisfaction (NoD).

1999 Edition • Clause 20.5 Trigger: NoD under 20.4

Waiting period56 days

Settlement talksEncouraged (not enforced)

Next step if no dealArbitration

Dispute Resolution Flow (1999 • Clause 20.5)

Tip: The “Unsatisfied with DAB?” decision is what triggers the amicable settlement window.

⏱️ 56-Day Amicable Settlement Timeline (post-NoD)

Day 0 (NoD issued)Day 56 (Arbitration may commence)

Clause text (1999, 20.5 Amicable Settlement): “Where notice of dissatisfaction has been given under Sub-Clause 20.4 above, both Parties shall attempt to settle the dispute amicably before the commencement of arbitration. However, unless both Parties agree otherwise, arbitration may be commenced on or after the fifty-sixth day after the day on which notice of dissatisfaction was given, even if no attempt at amicable settlement has been made.”

Step-by-Step Explanation (Original + Enhanced)

Start: Dispute Arises

Overview: The process is initiated when a conflict or disagreement surfaces between parties involved in a project. This could be related to any aspect of the project, such as contractual obligations, work quality, timelines, etc.
Importance: Recognizing the onset of a dispute is crucial for timely and effective resolution.

Identify Dispute

Overview: Parties acknowledge and clearly define the nature of the dispute. This step involves understanding the root cause and specific issues.
Importance: Proper identification guides the choice of resolution method.

Refer to DAB

Overview: The dispute is formally referred to the Dispute Adjudication Board (DAB), a neutral body established to resolve such conflicts.
Importance: The DAB serves as an impartial entity to assess the dispute and make a decision, helping prevent escalation.

Unsatisfied with DAB Decision?

Overview: After the DAB renders a decision, parties assess their satisfaction with the outcome.
Decision Points: Yes (Unsatisfied): move to invoke Clause 20.5. No (Satisfied): accept and implement the DAB’s decision.

Invoke Clause 20.5

Overview: If either party is dissatisfied with the DAB’s decision, Clause 20.5 is invoked—attempt amicable settlement.
Importance: Opportunity to resolve differences through negotiation, avoiding more formal mechanisms.

Negotiate for 56 Days

Overview: Parties engage in negotiations for a period of 56 days to find a mutually acceptable solution.
Importance: The timeframe supports thorough discussions; note that talks are encouraged but not enforced by the clause.

Reach Agreement?

Decision Points: Yes: Implement the agreement → End. No: Proceed to arbitration.

Implement Agreement or Proceed to Arbitration

Overview: Depending on negotiation outcomes, parties either implement the agreed solution or move to arbitration.
Importance: Ensures finality—either by mutual consent or via a formal arbitral process.

End

Overview: The process concludes with either implementation of an agreement or initiation of arbitration.
Importance: Marks closure and allows parties to move forward.

Reminder: Clause 20.5 creates a 56-day amicable settlement window after an NoD is issued under 20.4. Arbitration may commence thereafter even if no talks occurred. Always read your Contract Particulars.

Clause 20.5 (1999) — Amicable Settlement Checklists

Clause 20.5 (1999): Amicable Settlement — Interactive Checklists

Plan, execute, and monitor the 56-day negotiation window after a Notice of Dissatisfaction (NoD) with practical, trackable steps.

1999 Edition • Clause 20.5 Focus: Amicable Settlement pre-arbitration

Waiting period56 days

Overall progress0% done

AdviceTalks encouraged (not enforced)

Planner Inputs (to compute due dates)

Tip: Enter the DAB Decision Date. Add other dates as they happen; the tool recalculates “latest by” deadlines automatically.

DAB Decision Date

Date of Decision to Invoke 20.5 (optional)

Notification to Other Party (optional)

Meeting Date (optional)

Filter by Responsible

Disclaimer: Educational checklist. Always check your Contract Particulars and the relevant FIDIC book before acting.

Clause 20.5 (1999): Amicable Settlement 🆚 Clause 21.3 (2017): Avoidance of Disputes