Clause 20.8 Expiry of Dispute Adjudication Board’s Appointment

Purpose in Depth

Clause 20.8 serves as a contingency plan within the contract. It provides a clearly defined route for dispute resolution when the standard route via the Dispute Adjudication Board (DAB) is unavailable. This might happen when the DAB’s appointment has expired, or for other reasons that render the DAB non-functional.

Deep Dive into Implications

The clause essentially provides a “safety net” for both parties. If you find yourself in a situation where the DAB is not in place and a dispute arises, you don’t have to worry about being stuck in a legal limbo. You can proceed directly to arbitration under Clause 20.6 Arbitration. This is crucial because it avoids potential delays in the resolution of disputes, which can be both time-consuming and costly.

Thorough Explanation of Primary Aspects

1. No DAB in Place: This could be due to several reasons – expiry of the DAB’s term, dissolution of the DAB due to a conflict of interest, or mutual agreement to disband the DAB.
2. Bypassing DAB and Amicable Settlement: Sub-Clause 20.4 and Sub-Clause 20.5 are designed to provide initial steps in dispute resolution. However, they assume the presence of an active DAB. When that’s not the case, Clause 20.8 allows parties to skip these steps.
3. Direct to Arbitration: Arbitration is often seen as a last resort in dispute resolution due to its formal nature and the costs involved. However, Clause 20.8 allows for this step to be taken immediately if the DAB is not in place.

Expert Opinion

Legal experts often recommend that parties pay close attention to the terms regarding the DAB’s appointment, as ignoring this can lead to unexpected complications. When the DAB is not in place, Clause 20.8 becomes the operative route for dispute resolution, and parties must be prepared for the formalities and costs that come with arbitration.

Relevant Illustrations and Case Studies

For example, in a project involving the construction of a highway, a dispute arose between the contractor and the employer over payment delays. The DAB’s term had expired a month earlier. Because Clause 20.8 was in effect, the contractor was able to take the dispute directly to arbitration, avoiding further delays and ultimately receiving the pending payments.

Checklists

Checklist for Proficient Execution and Deployment of Clause 20.8

Task	Responsible Party	Deadline	Status
Confirm No DAB in Place	Legal Team	Immediately after dispute arises	Pending
Consult Internal Legal Team	Project Manager	Within 2 days	Pending
Consult External Legal Experts	Legal Team	Within 7 days	Pending
Decide on Arbitration	Legal Team	Within 14 days	Pending
Notify Other Party of Arbitration	Legal Team	Within 21 days	Pending
Prepare for Arbitration	Legal Team	Before arbitration starts	Pending

Checklist for Assisting in Applying and Overseeing Clause 20.8

Task	Responsible Party	Deadline	Status
Verify DAB Status	Legal Team	Immediately after dispute arises	Pending
Initial Legal Consultation	Project Manager	Within 2 days	Pending
Draft Arbitration Initiation Letter	Legal Team	Within 14 days	Pending
Gather Evidence and Documents	Legal Team	Before arbitration starts	Pending

Checklist for Guiding and Monitoring Execution of Clause 20.8

Task	Responsible Party	Deadline	Status
Confirm DAB Expiry	Legal Team	Immediately after dispute arises	Pending
Internal Review of the Case	Project Manager	Within 7 days	Pending
Decide on Arbitration Steps	Legal Team	Within 14 days	Pending
Send Official Arbitration Notice	Legal Team	Within 21 days	Pending
Prepare Legal Team for Arbitration	Legal Team	Before arbitration starts	Pending

Sample Letters

Letter for Invoking Arbitration Due to Inactive DAB

[Your Company]
[Your Address]
[Date]

[Recipient Company]
[Recipient Address]

Subject: Direct Initiation of Arbitration Due to Inactive DAB

Dear [Recipient’s Name],

We find it necessary to draw your attention to the current dispute concerning [Specific Issue]. Given that there is no active Dispute Adjudication Board (DAB) in place, we are invoking Clause 20.8 to proceed directly to arbitration under Clause 20.6.

We kindly request your immediate acknowledgment of this letter.

Sincerely,
[Your Name]
[Your Position]

Letter Notifying Arbitration Panel of DAB’s Expiry

[Your Company]
[Your Address]
[Date]

Arbitration Panel
[Address]

Subject: Notification of Inactive DAB and Initiation of Arbitration

Dear Panel Members,

We wish to inform you that due to the expiry of the DAB’s appointment, we have a dispute with [Other Party’s Name] that needs to be resolved through arbitration as per Clause 20.8.

Sincerely,
[Your Name]
[Your Position]

Flowchart for Clause 20.8 – Expiry of Dispute Adjudication Board’s Appointment

Detailed Explanation of the Flowchart

1. Start: Dispute Arises in Project
   • Overview: The process begins when a dispute emerges between the parties involved in a project, related to the contract or the execution of the works.
   • Importance: Recognizing the onset of a dispute is the first step towards resolving it.
2. Check DAB Status
   • Overview: Assess whether a Dispute Adjudication Board (DAB) is currently in place for the project.
   • Decision Points:
     • No DAB in Place: Proceed if there is no DAB due to expiry or other reasons.
     • DAB in Place: The process ends, as the existing DAB would handle the dispute.
3. Skip DAB Decision & Amicable Settlement
   • Overview: If no DAB is in place, bypass the steps involving DAB decision-making and amicable settlement attempts.
   • Importance: This step acknowledges that without a DAB, these preliminary dispute resolution steps are not applicable.
4. Refer Dispute Directly to Arbitration under Clause 20.6
   • Overview: The dispute is directly referred to arbitration as per Clause 20.6.
   • Importance: Direct arbitration becomes the primary method for dispute resolution in the absence of a DAB.
5. Arbitration Process Initiated
   • Overview: The arbitration process begins, following the rules and procedures outlined in Clause 20.6.
   • Importance: Arbitration provides a formal and binding resolution to the dispute.
6. End of Arbitration Process
   • Overview: The arbitration process concludes, ideally resolving the dispute.
   • Importance: This marks the final resolution of the dispute, allowing parties to move forward based on the arbitration outcome.