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🏗️ Understanding the Dispute Avoidance/Adjudication Board (DAAB) under FIDIC 2017 Red Book

UNDER NEW FIDIC 2017 RED BOOK incl. Errata

1. INTRODUCTION

This course reviews the practical requirements and procedures in the FIDIC Conditions of Contract for Construction, 2nd Ed. 2017 (Red Book) from a “how-it-works on projects” perspective, with particular focus on the Dispute Avoidance/Adjudication Board (DAAB). It is a hands-on guide for engineers and contract administrators—not a legal commentary.

We will cite the official 2017 clauses (and occasionally map back to 1999 where helpful). Please always consult the complete clause text in the FIDIC contract for exact wording.

Key 2017 shifts you’ll see throughout this course (vs 1999):

DAB → DAAB (standing board by default) with an explicit dispute-avoidance role; parties must jointly appoint the DAAB (typically within 28 days of the Letter of Acceptance) and keep it in place through the contract.
Claims and Disputes are split: Clause 20 = Employer’s & Contractor’s Claims (time/cost/other relief); Clause 21 = Disputes & Arbitration (DAAB → Amicable → Arbitration).
Engineer’s neutrality and timelines: the Engineer acts neutrally under **Sub-Clause 3.7 and must consult then agree/determine within set time limits. Failure triggers consequences (e.g., deemed rejection; DAAB referral in some cases without a NOD).
Claims protocol with firm windows: Notice of Claim within 28 days, Engineer’s initial 14-day response on time-bar, and Fully Detailed Claim within 84 days. Missing these can lapse the claim.
DAAB decision timeline: DAAB must issue its decision within 84 days of the reference; it’s binding immediately (pay now, argue later) unless a Notice of Dissatisfaction (NOD) is given within 28 days.

2. THE CONSTRUCTION CONTRACT

A construction contract is still between two parties:

The Employer, who needs and funds the project.
The Contractor, who executes the Works (with design responsibilities depending on the contract form).

Design responsibilities & the Red/Yellow/Silver split (unchanged in concept):

The 2017 Red Book assumes Employer-design (a Consulting Engineer typically does the Employer’s design).
The 2017 Yellow Book (Plant & Design-Build) and Silver Book (EPC/Turnkey) assume Contractor-design.

Where the 2017 Red Book changes your day-to-day (compared to 1999):

Engineer’s role is more structured: when a claim or matter must be agreed/determined, the Engineer acts neutrally and follows the Sub-Clause 3.7 consultation → determination sequence with explicit time limits.
Decision pipeline is clearer:
- Clause 20 (Claims): Notices, records, fully detailed claim → Engineer’s agreement/determination under 3.7.
- Clause 21 (Disputes): If a Dispute arises, refer to DAAB under 21.4; DAAB has both avoidance and adjudication functions under 21.3/21.4.

3. THE CONDITIONS OF CONTRACT

The contract documents still split into General Conditions and Particular Conditions, but 2017 standardizes the packaging:

Particular Conditions – Part A: Contract Data (replaces the old “Appendix to Tender”).
Particular Conditions – Part B: Special Provisions (project-specific adjustments).
FIDIC’s Golden Principles appear with guidance to keep tinkering under control—use the GCs as published, and only tailor with clear, compatible Special Provisions.

Who makes the “initial call” on cost/time?
Under 2017, the Engineer is the first-tier decision maker (not the Employer’s representative), and must act neutrally when agreeing/determining claims or other matters under **Sub-Clause 3.7. The Engineer’s decision/parties’ agreement is binding unless a timely NOD is issued (or it’s corrected), and missed time limits have set consequences (e.g., deemed rejection).

1999 ➜ 2017 at a glance (for this course)

Board: DAB (1999, ad-hoc/standing) → DAAB (2017, standing by default; also dispute avoidance).
Appointment timing: Typically within 28 days of LOA unless stated otherwise.
Engineer’s decision-making: 1999 3.5 (Determinations) → 2017 3.7 (Agreement or Determination) with neutrality and time limits.
Claims windows: 28 days (Notice of Claim) → 14 days (Engineer’s time-bar response) → 84 days (Fully Detailed Claim).
DAAB decision: 84 days from reference; binding immediately, NOD within 28 days or it becomes final and binding.

Quick 2017 flow (what you’ll apply repeatedly)

Claim arises (either Party) → 20.2.1 Notice within 28 days.
Engineer checks time-bar (14 days); silence = Notice valid.
Fully Detailed Claim (84 days); omission of the legal basis statement → Notice lapses.
Engineer acts under 3.7: consult to seek agreement → if none, issue determination (both on 42-day windows, or other agreed). If the Engineer misses, deemed rejection (for Claims) and certain matters may go straight to DAAB.
If dissatisfied → NOD within 28 days → refer to DAAB (normally within 42 days of NOD; some Disputes can bypass 3.7/NOD—e.g., non-payment of financing charges under 14.8 or termination notices).
DAAB decision (84 days) → binding immediately (pay now, argue later). NOD within 28 days if dissatisfied → Amicable Settlement (28 days) → Arbitration (ICC, unless agreed otherwise).

Small terminology updates for your notes

“Appendix to Tender” (1999) → “Contract Data, Part A” (2017); project-specific Special Provisions sit in Part B.
“Employer’s Representative / Engineer” → use “Engineer” (with neutrality under 3.7).
“DAB” → “DAAB” (standing; avoidance + adjudication). Ad-hoc DAB remains possible, but only via explicit amendments and without the avoidance role.

4. INTERNATIONAL CONTRACTS

An international contract still involves at least one party from outside the project’s country. Practically, you’ll manage the same core contract processes as a domestic job—but with added layers: applicable law, local practice, and currency considerations.

What’s different/clearer in 2017?

FIDIC pushes project-specific data into the Contract Data (Particular Conditions – Part A) rather than scattering it in the General Conditions. Anything driven by local law or practice (e.g., mandatory insurances, permits data fields, notice addresses, ruling language) belongs in Part A.
The Golden Principles reminder is explicit: keep the GCs recognizably FIDIC; tailor only what local law or project specifics require, and do it in the Particular Conditions (Part B) with care.
The Engineer’s role is formalized: under **Sub-Clause 3.7 the Engineer must act neutrally, consult, then agree/determine within strict time limits—important where different legal systems demand demonstrable neutrality.
Claims and disputes are structurally separated: Clause 20 (Claims) first, then Clause 21 (Disputes & Arbitration) if disagreement persists; this pipeline reduces friction when your contract sits under unfamiliar legal frameworks.

Practical tip for international jobs (2017): put local-law items (e.g., workmen’s compensation, social security, third-party liabilities) and any other insurances required by law or local practice into Contract Data—then the Contractor must provide them at its cost. 📌 This keeps compliance visible and auditable.

5. THE FIDIC FAMILY OF CONTRACTS

FIDIC still offers a family of forms; for your Construction (Red Book) course, the center of gravity is unchanged:

Conditions of Contract for Construction (Red Book) — for building and engineering works designed by the Employer. (The 2017 front matter states that the Conditions comprise the General Conditions, the Contract Data (Particular Conditions – Part A) and any Special Provisions (Particular Conditions – Part B).)

How 2017 packages the documents (replacing the 1999 “Appendix to Tender” idea)

Particular Conditions – Part A: Contract Data (project-specific fields).
Particular Conditions – Part B: Special Provisions (your tailored amendments).
Precedence is explicit: Contract Data (Part A) prevails over Part B, and Part B over the General Conditions—so fill Part A carefully for local/international specifics. ✅

Philosophy carried into 2017

Use the GCs as published; amend only where the project/legal environment really needs it, and keep changes minimal and coherent. (This is FIDIC’s Golden-Principles drumbeat.)

“Who decides if the Employer must pay?” — 2017 pipeline

Claims first (Clause 20): Either Party gives a Notice of Claim within 28 days; the Engineer checks time-bar within 14 days, then receives the Fully Detailed Claim within 84 days and proceeds under 3.7. 🚦
1. The Engineer acts neutrally, consults, then issues a Notice of the Parties’ Agreement or a Notice of the Engineer’s Determination within 42 days (unless another limit is agreed). If late, a Claim is deemed rejected, enabling dispute steps.
If dissatisfied → Dispute (Clause 21): Serve a NOD on the Engineer’s determination within 28 days, then refer to the DAAB (normally within 42 days of the NOD). Certain issues (e.g., **non-payment of financing charges under 14.8, termination notices) can go straight to the DAAB without a 3.7 cycle.
DAAB decision: within 84 days, binding immediately (“pay now, argue later”). If still unhappy, give a NOD within 28 days; otherwise the decision becomes final and binding. Then Amicable Settlement (28 days) → ICC Arbitration unless otherwise agreed.

1999 ➜ 2017: quick mapping for your course notes

DAB (1999) → DAAB (2017, standing by default with dispute-avoidance function). If you deliberately opt back to ad-hoc DAB, you must amend the Conditions and remove the avoidance role. 🚨
Appendix to Tender (1999) → Contract Data (Part A); tailor changes in Part B and respect the Part A > Part B > GCs precedence.
Engineer’s Determinations (1999 3.5) → Neutral agreement/determination (2017 3.7) with 42-day time limits and clear outcomes if late.
Clause 20 (1999) (claims + disputes bundled) → 2017 split: Clause 20 = Claims; Clause 21 = Disputes/DAAB/Arbitration.

One-paragraph “course voice” you can reuse

In the 2017 Red Book, keep local-law specifics in Contract Data (Part A), apply your project-wise amendments in Part B, and let the Engineer under 3.7 run a neutral, time-boxed agreement/determination process. If disagreement persists, go to the DAAB under 21.4 for a decision in 84 days—binding immediately unless a 28-day NOD is served—then amicable settlement and, if needed, ICC arbitration. This structure is deliberate to keep international projects moving while respecting different legal systems.

6. DISPUTES – DISPUTE AVOIDANCE/ADJUDICATION BOARD

The Conditions of Contract set out the rights and obligations of the Parties. Other participants (Engineer, consultants, Subcontractors) may assist in preparing or analysing a Claim, but only the Employer or the Contractor may be the principal who makes or receives a Claim under Clause 20. In the 2017 Red Book, either Party may bring a Claim for additional payment, EOT, or other relief; the Claim procedure then applies as stated in Clause 20.

Disputes consume time and resources. The 2017 Conditions separate the processes: Clause 20 covers Employer’s and Contractor’s Claims, and Clause 21 covers Disputes & Arbitration. Disputes are referred to a Dispute Avoidance/Adjudication Board (DAAB) rather than a DAB.

A DAAB is a body of experienced, impartial and independent members. In the 2017 form, a standing DAAB is the default: it is jointly appointed (normally stated in the Contract Data) at the start of the Contract and remains in place throughout, undertaking regular meetings/site visits and offering dispute avoidance support when jointly requested by the Parties.

When a Dispute cannot be resolved by the Parties, it is referred to the DAAB for decision under Clause 21.4. The DAAB must give its decision within 84 days of the reference, unless both Parties agree otherwise.

The DAAB procedure is intended to be a primary, prompt route to resolution. In specified situations—such as non-payment of financing charges under Sub-Clause 14.8 within 28 days, or certain termination notices—a Dispute may be referred directly to the DAAB without the need for a prior Notice of Dissatisfaction or completion of other intermediate steps, supporting timely adjudication.

7. PRINCIPAL PARTICIPANTS IN CONTRACT

The Contract is a legally binding agreement between the Employer and the Contractor. The Engineer is not a party to the Contract; the Engineer is appointed by the Employer to perform duties stated in the Contract (see Clause 3). The Engineer has no authority to amend the Contract and, when agreeing or determining matters, must act neutrally under Sub-Clause 3.7. The following notes outline the roles of Engineer, Employer and Contractor with regard to claims arising from the Contract or the Works.

The 2017 edition formalises several contract-administration procedures to be followed by both Parties. The Employer’s administration is carried out through the Engineer (see Clause 3).

Particularly noteworthy administrative procedures (2017 mapping):

Sub-Clause 2.4 – Employer’s Financial Arrangements (Contractor may require reasonable evidence).
Clause 20 – Employer’s and Contractor’s Claims (replaces 1999 Sub-Clause 2.5 for Employer’s claims; common procedure for both Parties).
Clause 4.9 – Quality Management and Compliance Verification Systems (project-specific QMS/CVS to be specified).
Sub-Clause 4.20 – Progress Reports (monthly reporting in specified format).
Sub-Clause 6.7 – Health and Safety of Personnel (H&S obligations; accident reporting aligns with Sub-Clause 4.20).
Sub-Clause 6.10 – Contractor’s Records (including personnel and equipment details to support Sub-Clause 4.20).
Sub-Clause 8.4 – Advance Warning (Parties to advise of future events/circumstances affecting time, cost, quality, or performance).
Sub-Clause 13.2 – Value Engineering (procedure for Contractor proposals).
Sub-Clause 14.3 – Application for Interim Payment (procedure and supporting information for valuations).
Clause 20 – Detailed claims procedure including contemporary records and fully detailed claims requirements.
Sub-Clause 3.8 – Meetings (management meetings are expressly provided in the Conditions; no separate guidance add-on needed).

7.1 RISK

The allocation of risks between the Employer and the Contractor is defined within the Contract. In general, the Contractor accepts risks not specifically allocated to the Employer. In the 2017 Red Book, risk allocation is principally structured through Clause 17 (Care of the Works and Indemnities), Clause 18 (Exceptional Events) and Clause 19 (Insurance). The concept formerly described as “Employer’s Risks” (1999 Sub-Clause 17.3) is reflected in the 2017 framework via the rules for care of the Works, indemnities, Exceptional Events, and insurances.

The General Conditions allocate risk on a fair and workable basis, taking account of insurability, sound project-management principles, and each Party’s ability to foresee and mitigate relevant circumstances.

The Conditions of Contract set out the rights and obligations of the Parties. All claims arising under or in connection with the Contract must follow the procedures laid down in Clause 20 (Employer’s and Contractor’s Claims) and any subsequent dispute steps under Clause 21 (Disputes and Arbitration).

Claims are generally made by the Parties due to the following circumstances:

Entitlement to an extension of time
Entitlement to additional payment
Entitlement to the recovery of costs
Non-fulfilment by one Party of a contractual obligation
Additional payments due to legal entitlement

7.2 THE ENGINEER

The Contract is administered by the Engineer, who is appointed by the Employer. The Engineer is not a Party to the Contract. The Engineer’s duties and authority are set out in Clause 3. The Engineer has no authority to amend the Contract, and when agreeing or determining any matter must act neutrally in accordance with Sub-Clause 3.7 (Agreement or Determination).

Under Sub-Clause 14.6 (Issue of Interim Payment Certificate) the Engineer issues Interim Payment Certificates for amounts due. Sub-Clause 14.3 (Application for Interim Payment Certificates) requires that applications (and ensuing certifications) include any additions or deductions becoming due under the Contract, including amounts arising from determinations and from DAAB decisions which are binding unless and until revised under Clause 21 (see Sub-Clause 21.4.3, binding effect; “pay now, argue later”).

Sub-Clause 3.1 (Engineer’s Duties and Authority) confirms that the Engineer has no authority to relieve either Party of any duty, obligation or responsibility. Variations are administered under Clause 13 (Variations and Adjustments) (including Sub-Clause 13.1 Right to Vary and Sub-Clause 13.3 Variation Procedure) and via Sub-Clause 3.3 (Instructions of the Engineer). The Employer does not issue instructions directly to the Contractor; if the Employer wishes to change the Works, the instruction is issued by the Engineer. If the Employer gives a direct instruction, the Contractor shall obtain the Engineer’s instruction/confirmation before proceeding (see Sub-Clause 3.3). Procedures for confirming oral instructions are set out in Sub-Clause 3.3.

The Engineer’s authority that requires the Employer’s specific approval is identified in the Contract Data (Particular Conditions – Part A) (see Sub-Clause 3.1). Communications and approvals are to be in writing in accordance with Clause 1.3 (Communications).

The Engineer may delegate authority to assistants in accordance with Sub-Clause 3.2 (Delegation by the Engineer), subject to the limitations stated in the Contract.

Under Sub-Clause 3.7, when a matter or Claim requires agreement or determination, the Engineer consults with the Parties to reach agreement; if agreement is not achieved within the stated time, the Engineer issues a determination. Such agreement or determination is binding unless and until revised under Clause 21. The procedures for the submission and assessment of Claims by either Party are set out in Clause 20.

7.3 CLAIMS BY THE EMPLOYER

If the Employer considers itself entitled to any payment under any clause, the Employer must give a Notice of Claim and particulars under Clause 20.2 [Claims For Payment and/or EOT], after which the Engineer proceeds under Clause 3.7 [Agreement or Determination] to agree/determine the matter. The Employer shall not set-off or deduct amounts unless the requirements of Clause 20.2 have been complied with (see general constraint reflected across the Conditions and in the Engineer’s 3.7 determination step).

**Clauses requiring notice under **20.2 include (examples where the text expressly says “subject to Sub-Clause 20.2”):

7.5 (Defects and Rejection): Employer’s costs due to rejection/retesting.
7.6 (Remedial Work): Employer’s costs if it employs others after the Contractor fails to comply.
8.8 (Delay Damages): Employer’s entitlement to delay damages is expressed as subject to Sub-Clause 20.2.
9.2 (Delayed Tests on Completion): Employer’s additional costs if tests are delayed by the Contractor.
9.4 (Failure to Pass Tests on Completion): Employer’s payment/reduction entitlements.
11.3 (Extension of Defects Notification Period): Employer’s right to extend DNP.
11.4 (Failure to Remedy Defects): Employer’s costs or reduction in Contract Price.
11.11 (Clearance of Site): If the Contractor fails to clear within 28 days after the Performance Certificate, Employer’s costs for disposal/clean-up.
15.4 (Payment after Termination for Contractor’s Default): Employer’s additional costs, losses, damages (incl. site clearance).

Clauses that typically do not require a 20.2 Notice (handled via certification/deductions):

4.19 (Temporary Utilities): amounts for utilities/services the Employer makes available are deducted via payment certification (see 14.3 inclusions for deductions such as utilities provided by the Employer).

Other clauses allowing for Employer claims/deductions (outside a 20.2 notice or with specific mechanisms):

4.2 (Performance Security): conditions for calling, holding, and accounting for proceeds (and Employer indemnity if call not entitled).
5.2.4 (Evidence of Payments to Nominated Subcontractors): evidence and related controls.
10.2 (Taking-Over of Parts): any reduction in delay damages to be agreed/determined by the Engineer under 3.7.
11.6 (Further Tests after Remedying Defects): repeated tests at risk and cost of the liable Party (basis for charging).

Process summary for 2017: Employer gives Notice of Claim under 20.2, keeps contemporary records and particulars as applicable; the Engineer then follows 3.7 to agree/determine; items like utilities are adjusted through 14.3 deductions; post-termination recoveries flow through 15.3/15.4 with express linkage back to 20.2 where stated.

7.4 CLAIMS BY THE CONTRACTOR

Most claims are made by the Contractor and may be for an extension of time for completion, and/or for reimbursement of Cost (and in some cases Cost Plus Profit). Claims for additional time frequently result in a claim for additional payment, which under the 2017 Conditions must follow Clause 20 procedures and (where applicable) be certified and/or determined before any dispute steps under Clause 21.

All claims for additional time or money must follow Sub-Clause 20.2. This requires a Notice of Claim to the Engineer not later than 28 days after the claiming Party became (or should have become) aware of the event or circumstances. The Engineer has 14 days to give a time-bar notice; if the Engineer does not, the Notice of Claim is deemed valid. A fully detailed claim must then be submitted within 84 days after becoming aware (or within a longer period agreed). Failure to meet these requirements may bar or lapse the claim. The Contractor must also keep contemporaneous records.

In general, the sequence of procedures for submission of claims in accordance with Clause 20 and other clauses may be summarised as follows:

The Contractor gives any early warning about likely problems (see Sub-Clause 8.4 [Advance Warning]).
The Contractor gives the Notice of Claim under Sub-Clause 20.2.1 (28 days).
The Engineer gives an initial time-bar response within 14 days under Sub-Clause 20.2.2 (or the Notice is deemed valid).
The Contractor keeps and allows inspection of contemporaneous records (Sub-Clause 20.2.3).
The Contractor submits the fully detailed claim within 84 days (Sub-Clause 20.2.4), with monthly updates if effects continue (Sub-Clause 20.2.6).
The Engineer proceeds to agreement or determination under Sub-Clause 3.7 (with set 42-day time limits).
The Engineer certifies any amounts in payment certificates as substantiated.
If either Party is dissatisfied with the 3.7 determination, it gives a Notice of Dissatisfaction within 28 days and the matter may be referred to the DAAB under Sub-Clause 21.4, which must give a decision (normally within 84 days).

The definition and handling of Disputes are under Clause 21. For example, if the Contractor objects to an instruction by the Engineer, the Contractor is obliged to comply with the instruction under Sub-Clause 3.3, but there may be a Dispute that can be referred to the DAAB under Sub-Clause 21.4. In any event, the Contractor is obliged under Sub-Clause 8.1 to proceed with the Works with due expedition and without delay.

Disputes concerning additional time or money must follow the procedures of Clause 20 before they are referred to the DAAB. The process may take time unless both Parties jointly request the DAAB’s informal assistance under Sub-Clause 21.3.

The various requirements for submission of claims can result in parallel procedures and more than one referral to the Engineer under Sub-Clause 3.7 from the same situation. In some circumstances it may be desirable for the Engineer to proceed under Sub-Clause 3.7 as quickly as possible after the situation has arisen.

Sub-Clause 8.4 includes a general requirement for the Contractor to give advance warning to the Engineer of specific probable future events or circumstances which may adversely affect the work, increase the Contract Price or delay execution.

When submitting a claim the Contractor should include reference to all clauses which may be relevant. Some situations are covered by more than one clause, and entitlements may vary depending on which clauses are used as the basis of the claim.

Clauses including specific requirements for claims (2017 references)

Clauses which require the Contractor to give notice of an event which may cause delay or additional Cost (and route entitlement via Clause 20):

Sub-Clause 1.9 – delayed drawings or instructions.
Sub-Clause 4.12 – unforeseeable physical conditions.
Sub-Clause 4.23 – archaeological and geological findings (1999 4.24).
Sub-Clause 16.1 – Contractor’s entitlement to suspend work.
Clause 18 – exceptional events (1999 “force majeure” Clause 19).

Clauses which may entitle the Contractor to an extension of time and/or additional payment:

Sub-Clause 1.9 – delayed drawings or instructions.
Sub-Clause 2.1 – right of access to the Site.
Sub-Clause 4.7 – setting out.
Sub-Clause 4.12 – unforeseeable physical conditions.
Sub-Clause 4.23 – archaeological/geological findings.
Sub-Clause 7.4 – testing by the Contractor (as applicable).
Sub-Clause 8.5 – extension of time for completion (listed causes).
Sub-Clause 10.2 – taking over parts of the Works.
Sub-Clause 10.3 – interference with Tests on Completion.
Sub-Clause 11.8 – Contractor to search.
Sub-Clause 13.6 – adjustments for changes in laws.
Sub-Clause 13.7 – adjustments for changes in cost (where applicable).
Sub-Clause 16.1 – Contractor’s entitlement to suspend work.
Clause 18 – exceptional events (consequences).

Clauses which involve valuation or similar requirements:

Sub-Clause 12.3 – valuation of the Works.
Sub-Clause 12.4 – omissions.
Sub-Clause 15.3 – valuation after termination for Contractor’s default.
Sub-Clause 16.4 – payment after termination by Contractor.

Clauses which provide for the Contractor to claim Cost Plus Profit (examples):

Sub-Clause 1.9 – delayed drawings or instructions.
Sub-Clause 2.1 – right of access to the Site.
Sub-Clause 4.7 – setting out (where triggered).
Sub-Clause 7.4 – testing by the Contractor (where triggered).
Sub-Clause 10.2 – taking over parts (as applicable).
Sub-Clause 10.3 – interference with Tests on Completion.
Sub-Clause 11.8 – Contractor to search.
Sub-Clause 16.1 – Contractor’s entitlement to suspend work
Sub-Clause 16.4 – payment after termination by Contractor (includes loss of profit and other losses/damages).

Notes on renumbering / terminology:

1999 Clause 20.1 (Contractor’s Claims) → 2017 Clause 20 (Employers’ and Contractors’ Claims) with Sub-Clause 20.2 procedure (28/14/84 days).
1999 Clause 20.4 (DAB decision) → 2017 Sub-Clause 21.4 (DAAB decision, normally 84 days).
1999 Clause 20.2 (DAB appointment) “ask DAB for opinion” → 2017 Sub-Clause 21.3 (DAAB informal assistance by joint request).
1999 Clause 3.5 (Determinations) → 2017 Sub-Clause 3.7 (Agreement or Determination; time limits).
1999 Clause 8.3 (future events notice in Programme) → 2017 Sub-Clause 8.4 [Advance Warning].
1999 Clause 19 (Force Majeure) → 2017 Clause 18 [Exceptional Events].
1999 Sub-Clause 4.24 (Fossils) → 2017 Sub-Clause 4.23 (Archaeological & Geological Findings).

8. CLAUSE 20: CLAIMS & CLAUSE 21: DISPUTES AND ARBITRATION

In the 2017 Red Book, Clause 20 [Employer’s and Contractor’s Claims] sets out the claims process for either Party, and Clause 21 [Disputes and Arbitration] governs disputes (DAAB and arbitration). Determinations are made under Sub-Clause 3.7 [Agreement or Determination].

8.1 CLAUSE 20.1 GENERAL (2017 update)

Sub-Clause 20.1 [Claims] defines a “Claim” and confirms that either Party may make a claim for an extension of time, payment of Cost, and, where stated in the Contract, Cost Plus Profit. The procedure for such Claims is set out in Sub-Clause 20.2 [Claims—Time Bars, Notice, Procedure]. Claims by the Employer are no longer under 1999 Clause 2.5; under 2017, both Parties follow Clause 20.

The requirements of Clause 20 are in addition to other notice requirements. Notices on related matters can be combined, but the supporting information and follow-on actions required by the Contract (including under Sub-Clause 3.7) will differ for each notice.

Typical entitlement wording used across clauses in 2017 includes:

“The Contractor shall give a Notice …” — obligatory, subject to the Sub-Clause 20.2 time bar.
“The Contractor shall be entitled …” — entitlement language, as limited by the Contract and Clause 20.
“Subject to Sub-Clause 20.2 …” — the procedural provisions (including time bars) may affect entitlement.
“An extension if Completion is delayed …” — EOT is assessed by reference to delay to Completion.
“Payment of any such Cost …” — only Cost attributable to the relevant event/circumstance.
“Plus Profit …” — appears where expressly stated (typically events attributable to the Employer or its personnel).

Sub-Clause 20.2 specifies the procedures the Contractor must follow in pursuit of a claim and the consequences of any failure to do so (including time bars and deeming provisions).

8.2 NOTICE PERIODS

If the Contractor considers itself entitled to an extension of time and/or additional payment, it shall give a Notice of Claim to the Engineer under Sub-Clause 20.2.1.

The Notice shall describe the event or circumstance giving rise to the Claim and shall be given as soon as practicable, and in any event not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance. This Notice does not need to quantify the EOT or amount, or cite all contractual bases at this stage.

Notices must comply with Sub-Clause 1.3 [Communications]. Sub-Clause 4.21 [Progress Reports] requires the Contractor to include details of Notices of Claim issued under Sub-Clause 20.2.

The Notice is to be sent to the Engineer (with copy to the Employer) in accordance with Sub-Clause 1.3. Under Sub-Clause 20.2.2, the Engineer shall, within 14 days of receiving the Notice, give a notice stating whether the 28-day time limit was not complied with (with reasons). If the Engineer does not give this notice within 14 days, the Notice of Claim is deemed valid. The Contractor must ensure Notices are given in due time to protect its rights. Failure to give the Notice within 28 days may bar the Claim, subject to the above deeming provision.

Notices are an essential part of contract administration for all Parties. They enable the Engineer and Employer to make contemporaneous observations and records, and to consider appropriate actions. They place the matter on record and start the detailed procedure in Clause 20.

Whether failures to give Notice or to provide information affect legal rights may depend on the applicable law. Under the 2017 Conditions, however, the Clause 20 procedure is contractually prescribed and includes consequences for non-compliance. Sub-Clause 20.2.2 introduces specific obligations and consequences for the Engineer (including the 14-day time-bar check and deeming), and the subsequent steps proceed to Sub-Clause 3.7. If a dispute arises, it is handled under Clause 21 (DAAB and, if necessary, arbitration).

8.3 RECORDS

It is a requirement under Sub-Clause 20.2.3 [Contemporary Records] that the claiming Party shall keep contemporary records as may be necessary to substantiate the Claim. “Contemporary records” means records prepared or generated at the same time, or immediately after, the event or circumstance giving rise to the Claim. The Engineer may monitor the Contractor’s contemporary records and/or instruct the Contractor to keep additional contemporary records. The Contractor shall permit the Engineer to inspect these records during normal working hours (or at other times agreed by the Contractor) and, if instructed, submit copies to the Engineer. Such monitoring, inspection or instruction does not imply acceptance of the accuracy or completeness of the Contractor’s contemporary records.

8.4 NOTICE OF DETAILED CLAIM (2017 update)

Within 84 days after the claiming Party became aware, or should have become aware, of the event or circumstance giving rise to the Claim—or such other period as may be proposed by the claiming Party and agreed by the Engineer—the claiming Party shall submit to the Engineer a fully detailed Claim (Sub-Clause 20.2.4). A fully detailed Claim includes:
(a) a detailed description of the event or circumstance;
(b) a statement of the contractual and/or other legal basis of the Claim;
(c) all contemporary records relied upon; and
(d) detailed supporting particulars of the amount of additional payment claimed and/or EOT claimed (as applicable).

If, within this time limit, the claiming Party fails to submit the statement of the contractual/legal basis (item (b)), the Notice of Claim shall be deemed to have lapsed and shall no longer be considered valid; the Engineer shall give a Notice accordingly within 14 days after the time limit expires. If the Engineer does not give such Notice within 14 days, the Notice of Claim is deemed valid. Any disagreement with a deemed-valid Notice shall be addressed in the agreement/determination under Sub-Clause 20.2.5.

If the Claim has a continuing effect, under Sub-Clause 20.2.6:
• the first fully detailed Claim is treated as interim;
• the Engineer shall give the response on the contractual/legal basis within the time limit for agreement under Sub-Clause 3.7.3;
• the claiming Party shall submit further interim fully detailed Claims at monthly intervals; and
• a final fully detailed Claim shall be submitted within 28 days after the end of the effects (or such other period as may be proposed and agreed), giving the total amount and/or total EOT claimed.

After receiving a fully detailed Claim (including interim/final fully detailed Claims for continuing effects), the Engineer shall proceed under Sub-Clause 3.7 [Agreement or Determination] to agree or determine entitlement (payment and/or EOT). Under Sub-Clause 3.7.3, the Engineer shall give the Notice of the Parties’ Agreement within 42 days (or such other time limit as may be proposed by the Engineer and agreed by both Parties) after the applicable trigger, and—if no agreement—give the Notice of the Engineer’s Determination within 42 days after the obligation to proceed to determination. If the Engineer does not give the Notice of determination within the relevant time limit in the case of a Claim, the Engineer is deemed to have given a determination rejecting the Claim.

If the Engineer requires additional particulars after receiving the (interim/final) fully detailed Claim, the Engineer shall promptly give Notice describing them, shall nevertheless give the response on the contractual/legal basis within the 3.7.3 time limit, and the claiming Party shall submit the additional particulars as soon as practicable; the Engineer then proceeds under 3.7 to agree/determine.

Payment during evaluation: After receiving the Notice of Claim and until the Claim is agreed or determined under Sub-Clause 20.2.5, each Payment Certificate shall include such amounts for any Claim as have been reasonably substantiated as due under the relevant provision of the Contract.

General: The requirements of Sub-Clause 20.2 are in addition to those of any other Sub-Clause applicable to the Claim. If the claiming Party fails to comply with this or any other Sub-Clause in relation to the Claim, any additional payment and/or any EOT shall take account of the extent (if any) to which the failure has prevented or prejudiced proper investigation of the Claim by the Engineer.

8.5 DISPUTE AVOIDANCE/ADJUDICATION BOARD (DAAB)

The DAAB is an independent and impartial board of one or three natural persons, recommended to be appointed as a standing DAAB at the start of the Contract, to assist the Parties in avoidance of Disputes and in their real-time resolution during the Contract. Appointment is by a tripartite DAAB Agreement, and the Parties are under a joint obligation to appoint the member(s) within 28 days after the Contractor receives the Letter of Acceptance (unless otherwise stated); each Party is encouraged to name potential members in the Contract Data.

When jointly requested by both Parties, the DAAB is available to provide informal assistance (non-binding advice) at meetings or Site visits; unless the Parties agree otherwise, both Parties shall be present, and informal assistance is not available while the Engineer is carrying out Sub-Clause 3.7 on the matter (unless the Parties agree otherwise).

DAAB functions include:

Visiting the Site and holding meetings at regular intervals; after appointment, the DAAB convenes an introductory meeting and establishes a schedule of meetings/Site visits.
Remaining informed about progress, issues and potential disagreements, and giving informal assistance if jointly requested.
The frequency of meetings/Site visits is set so as to achieve the above, at intervals of not more than 140 days and not less than 70 days (unless jointly agreed otherwise).

When a Dispute is referred, the DAAB proceeds to a decision in accordance with Clause 21.4; both Parties must provide information, access and facilities, and continue performance pending the decision. The DAAB shall complete and give its decision within 84 days of the reference (or such other period as the DAAB proposes and both Parties agree).

A DAAB decision becomes final and binding if no Notice of Dissatisfaction (NOD) is given within 28 days after receipt; otherwise, the Dispute may proceed to amicable settlement and then arbitration in accordance with Clauses 21.5–21.6. If the DAAB fails to give its decision within the period under 21.4.3, either Party may give a NOD within 28 days thereafter.

Composition and appointment: A DAAB shall be one or three members (not five); if a member declines or is unable to act, or if appointment/replacement fails within the prescribed periods, either/both Parties may apply to the President of FIDIC (or a person appointed by the President) as appointing official.

Term and expiry: Unless otherwise agreed, the DAAB’s term runs until the discharge under Sub-Clause 14.12 becomes (or is deemed) effective, or 28 days after the DAAB has given its decision on all Disputes referred before discharge becomes effective, whichever is later; special timing applies if the Contract is terminated.

Independence, confidentiality and status: DAAB members must be independent and impartial; DAAB Activities are to be treated as private and confidential (subject to stated exceptions). A DAAB member shall not be appointed as arbitrator or be called as a witness in any arbitration under the Contract.

Procedural features: Decisions may be corrected for clerical/arithmetical errors and, where appropriate, clarified upon timely request; any addendum forms part of the decision, and relevant time periods run from receipt of the addendum. In a three-member DAAB, such matters may be agreed unanimously or by majority.

Alternative (ad-hoc) option: If the Parties choose (via Special Provisions) an ad-hoc DAB instead of a standing DAAB, appointment occurs only when a Dispute arises; no dispute-avoidance role applies, and certain modifications to Clause 21 and related references are required.

8.6 COST & COST BENEFIT

Each Party ultimately bears one-half of the DAAB members’ remuneration and expenses. Under the DAAB Agreement (2017), invoices are addressed to the Contractor; the Contractor shall pay each DAAB member’s invoice in full within 28 days, then apply to the Employer (in the Statements under the Contract) for reimbursement of one-half of the invoiced amounts, which the Employer then pays in accordance with the Contract. If the Contractor fails to pay within 28 days, the DAAB member informs the Employer, who shall promptly pay the amount due (and any amount required to maintain the DAAB’s function) and is entitled to recover from the Contractor any sums paid in excess of one-half and the reasonable costs of recovery. If a valid invoice remains unpaid 56 days after submission, a DAAB member may, after 7 days’ notice, suspend services and/or resign. DAAB remuneration typically comprises a monthly fee (availability/overheads), a daily fee (meetings/site visits/hearings/decision work), reasonable expenses (travel, accommodation, communications), and applicable taxes.

Recent global data indicates that the direct cost of a Dispute Board typically ranges around 0.04–0.30% of final construction cost (and is commonly well below 1%). International survey findings (2018–2023) report that subsequent arbitration/litigation was commenced only 0–10% of the time, with funders reporting involvement in 1,891 Dispute Boards over that period; common fee structures include retainers under US$25,000/year and daily fees of US$1,001–3,000, with the Dispute Board process often completing within ~76–90 days. Independent DRBF materials put the resolution rate at ~85–98% of matters not proceeding to arbitration/litigation.

A well-known European example remains the Channel Tunnel, which used a five-member board (three members sitting on any particular dispute). Contemporary reports record about 16 recommendations on disputes totaling roughly US$3 billion, with three recommendations taken to arbitration; one was accepted after arbitration was terminated, one was partially altered, and one was remitted for further decision and ultimately settled.

Acceptance has broadened across the US, Europe, China, India, and Southern Africa, with multilaterals now embedding Dispute Boards in their standard documents. Notably, the World Bank adopted the FIDIC 2017 suite in its Standard Procurement Documents from July 2019, with the DAAB mechanism supported and (in the Bank’s SPDs) the constitution of the DAAB made a condition precedent to Commencement in the Particular Conditions—reflecting a policy of standing boards issuing binding decisions under Clause 21 rather than recommendation-only boards.

8.7 PERCEIVED BARRIERS

The DAAB process is an established contractual mechanism intended to provide readily available, ongoing dispute-avoidance and decision-making during the Contract. It does not supplant the Parties’ decision-making responsibility but facilitates resolution in real time, including (when jointly requested) informal assistance by the DAAB.

It is difficult to quantify the benefits of a standing DAAB in strict cost terms. Because its function is partly prophylactic, the absence of Disputes may appear to suggest redundancy; however, the DAAB’s continuing presence and periodic meetings/visits are intended to maintain awareness, encourage engagement, and avoid escalation. (Meetings/Site visits are held at intervals set by the DAAB and Parties.)

Among some stakeholders there may be a perception that a board could impose its own notions of “fairness”. Under 2017, the DAAB is required to act independently and impartially, and its process is contract-based; the Parties retain the safeguard of a Notice of Dissatisfaction within 28 days if dissatisfied with a DAAB decision.

Potential users sometimes suggest that the modest effort and expense to approach the DAAB could encourage “testing” marginal claims. Experience with standing boards is that early engagement tends to reduce claim backlogs; under 2017, DAAB decisions are binding and must be complied with promptly, whether or not a NOD is given.

Some observers consider that adding a DAAB creates another layer and delays “final” resolution. Under 2017, the DAAB aims at expeditious decisions (normally within 84 days), followed (if needed) by amicable settlement and then arbitration; the amicable-settlement window is 28 days (unless the Parties agree otherwise).

Typical DAAB procedures involve pre-hearing submissions and supporting documentation. While some characterise this as “free discovery,” in practice supporting documents surface early, and the DAAB process is designed to be focused and efficient.

Criticism that limited discovery, sworn testimony, or cross-examination at informal hearings is a drawback misses the point of a consensual, contract-driven process aimed at swift issue-narrowing; extensive project documentation and witness knowledge typically minimise factual disputes.

A major historic criticism was enforceability. Under 2017, a DAAB decision is binding and must be promptly complied with (even if a NOD is issued); failure to comply allows the other Party to refer the failure itself directly to arbitration, where the tribunal has summary/expedited powers to enforce the decision (with appropriate reservations if the decision is binding but not final).

9. CLAUSE 21.1 & 21.2 (2017 update to 1999 20.2 & 20.3)

In 2017, disputes are to be decided by a DAAB and the Parties shall jointly appoint the DAAB within 28 days after the Contractor receives the Letter of Acceptance (unless another time is stated in the Contract Data). The DAAB shall comprise either one or three suitably qualified members; if not stated and the Parties do not agree otherwise, it is three. Members are selected from the list in the Contract Data; for a three-person DAAB, each Party selects one member (for the other’s agreement) and both agree the chair. The DAAB is deemed constituted when all Parties and members sign the DAAB Agreement, and each Party pays one-half of the DAAB remuneration.
If appointment fails or stalls (e.g., failure to select/agree members by the 21.1 date, failure to agree a replacement within 42 days, or failure to sign the DAAB Agreement/fees within 14 days), either/both Parties may apply to the President of FIDIC (appointing official) to appoint the member(s) and set the terms/fees. That appointment is final and conclusive. Each Party pays half of the appointing official’s remuneration.
Replacement and term: replacements follow the same selection method; the DAAB term normally expires on the effective date of 14.12 Discharge or 28 days after the DAAB has given decisions on all Disputes referred before Discharge (whichever is later). If the Contract is terminated, special expiry rules apply.

9.1 DISPUTES TO DAAB (2017)

Clause 21.1 states: “Disputes shall be decided by a DAAB in accordance with Sub-Clause 21.4 [Obtaining DAAB’s Decision].” Either Party may refer a Dispute to the DAAB; informal assistance under 21.3 is optional.
The term “Dispute” is defined in 1.1.29; in addition, a Dispute is deemed to have arisen (and may be referred to the DAAB without a NOD and without 3.7 applying) if:
(a) there is a failure or non-payment under 16.2.1;
(b) financing charges due under 14.8 are not paid within 28 days of request; or
(c) a Party gives a notice of intention to terminate (15.2.1 or 16.2.1) or a termination notice (15.2.2, 16.2.2, 18.5, 18.6) and the other Party disagrees with the entitlement to give such notice.
Timing: where a Dispute follows an Engineer’s determination under 3.7, the reference to DAAB must be made within 42 days after giving/receiving the NOD (21.4.1). The DAAB must give its decision within 84 days after receiving the reference (or another period agreed by both Parties) (21.4.3).
NOD window and finality: a NOD must be given within 28 days after receiving the DAAB’s decision; otherwise the decision becomes final and binding. If the DAAB does not decide within the 21.4.3 period, a NOD may be given within 28 days after that period expires (21.4.4).

9.2 DAAB CONSTITUTION (2017)

Appointment mechanics, composition and constitution are set out in 21.1 (one or three members; joint appointment within 28 days after LOA; selection from Contract Data lists; Parties agree the chair for a three-member board; DAAB deemed constituted on signing the DAAB Agreement; equal sharing of DAAB remuneration).
Failure-to-appoint scenarios and escalation to the President of FIDIC (appointing official) are governed by 21.2, including the 42 days and 14 days triggers noted above; the appointing official may also set the DAAB fees, and the appointment/terms are final. Each Party shares the appointing official’s remuneration 50/50.

9.3 SELECTION OF MEMBERS (2017 update)

Each Party names potential DAAB members in the Contract Data (typically three names each). The sole member or three members (as applicable) are then selected from those named in the Contract Data lists (excluding anyone unable or unwilling to accept). Where the DAAB has three members, each Party selects one member for the other Party’s agreement and both Parties agree the chairperson. The DAAB is constituted when all Parties and the member(s) have signed a DAAB Agreement; each Party pays one-half of the remuneration agreed in that DAAB Agreement.

If a wider selection is needed, the Contract Data may provide longer lists for both Parties. If no names are given in the Contract Data, consideration should be given to stating a time period for appointment longer than 28 days.

If the Parties cannot agree a member or the chair, or cannot agree the terms/fees of the DAAB Agreement, the failure-to-appoint mechanism in Sub-Clause 21.2 applies. The specific “failure” triggers are:
• failure to agree the sole member by the 21.1 appointment date;
• in a three-member DAAB, by the 21.1 date: failure by either Party to select a member, failure by either Party to agree the other’s selection, and/or failure by both Parties to agree the chair;
• failure to agree a replacement within 42 days after a member declines or is unable to act;
• after agreeing the appointment, failure by a Party to sign the DAAB Agreement within 14 days of request, or failure to agree the DAAB Agreement terms/fees within 14 days after advising the member of the agreed appointment.

In these cases, either or both Parties may apply to the President of FIDIC (or a person appointed by the President) as appointing official, who—after due consultation—will appoint the member(s) (or replacement) and set the monthly and daily fees. Selection is not limited to persons named in the Contract Data lists. The appointment and its terms are final and conclusive; each Party pays one-half of the appointing official’s remuneration (with the Contract providing the reimbursement mechanism).

Suitability and independence requirements for DAAB members are addressed in the DAAB Agreement (independence, impartiality, disclosures, experience, language).

9.4 QUALITIES OF DAB MEMBERS

Board members must be selected carefully because :

The parties empower the DAB to reach decisions with which they undertake to comply, and
- The DAB member cannot ordinarily be removed, except with the agreement of both parties

The members of the board should be experienced and should have the respect of the parties in order to fulfil their obligations adequately. The board acts as a team and not as individual representatives of the parties. As such the board should exhibit a balance of experience and professional expertise. Unless the Employer and the contractor are from the same country it is preferable for each member of the DAB to be of a different nationality to each other and not of the same nationality as either of the parties.

Training courses for board members have been established by FIDIC and a list of suitable board members has been published by them. Several other organisations throughout the world have also established lists of potential nominees.

The standard criteria for inclusion on such a list normally consist of :

Membership of the listing organisation
- Appropriate academic and professional qualifications
- Minimum of ten years experience in a senior position
- Knowledge and experience of the relevant contract documentation
- Formal dispute adjudication training and assessment
- Good interpersonal communication skills
- Ability to be impartial and objective

9.5 BASIC QUALITIES REQUIRED BY DAAB MEMBERS

The Parties empower the DAAB to issue binding decisions, so members must be willing and able to exercise that authority; appointments cannot be terminated unilaterally (termination only by mutual agreement of both Parties).
Members must be independent and impartial at all times and promptly disclose any facts/circumstances calling this into question.
They must also ensure availability, remain knowledgeable about the Contract/Site/progress, conduct meetings/Site visits as needed, and maintain a current working file.
All DAAB activities are private and confidential; members shall not be appointed as arbitrators or called as witnesses in any Contract arbitration.

9.6 EXPERIENCE

Each Party relies on the member’s representation that he/she is experienced/knowledgeable in the type of work the Contractor is to carry out, experienced in interpreting construction/engineering contract documentation, and fluent in the Contract language.
Members are required to remain informed about performance, Site and progress (including by visits and meetings), with documents kept in a current working file; DAAB meetings/Site visits occur at intervals set by the Rules/DAAB.

9.7 CONTRACT KNOWLEDGE

Members must comply with the DAAB Agreement, DAAB Rules and the Conditions relevant to DAAB activities, and are expected to be experienced in interpreting construction/engineering contracts and fluent in the agreed language.
They must stay conversant with the Contract and progress, including by studying documents supplied under Rule 4.3 and keeping a working file; Parties must keep the DAAB informed and copy communications appropriately.
Members do not give advice to either Party except as required to carry out DAAB activities (or where informal assistance is jointly requested under 21.3/DAAB Rules).

9.8 LANGUAGE CAPABILITY

Each DAAB member must be fluent in the language for communications stated in the Contract Data (or as otherwise agreed by the Parties and the DAAB).
Where project documents or day-to-day interactions occur in multiple languages, any language skills of a member should not compromise independence/impartiality or lead to advice/consultation outside DAAB Activities; Parties shall not request such advice, and DAAB Activities and documents are private and confidential.

9.9 DISPUTE RESOLUTION EXPERIENCE

DAAB members are relied upon to be experienced/knowledgeable in the type of work and experienced in interpreting construction/engineering contracts, and to act fairly and impartially, adopting procedures suitable to the Dispute and avoiding unnecessary delay/expense.
A DAAB decision is binding and the Parties must promptly comply whether or not a Notice of Dissatisfaction (NOD) is given; any ordered payment is immediately due and payable (subject to any security the DAAB requires).
If dissatisfied, a Party must give a NOD within 28 days; otherwise the decision becomes final and binding.
After a NOD, the Parties shall attempt amicable settlement, but arbitration may commence on/after 28 days from the NOD date unless otherwise agreed.
If a Party fails to comply with a DAAB decision (binding or final and binding), the other Party may refer the failure directly to arbitration for summary/expedited enforcement.

9.10 PROCEDURAL KNOWLEDGE

Under the DAAB Procedural Rules, the DAAB may establish procedures, decide on hearings, adopt an inquisitorial approach, request documents/oral submissions, take the initiative in ascertaining facts, and open up, review and revise relevant Engineer acts for the Dispute.
The DAAB must adopt a procedure suitable to the Dispute, giving each Party a reasonable opportunity while avoiding unnecessary delay/expense.
Informal Assistance for dispute avoidance is available under Sub-Clause 21.3/Rule 2, but not during hearings; if the Parties jointly request it during a hearing, the hearing is adjourned and the 21.4.3 decision period is temporarily suspended until the hearing resumes.

9.11 QUALIFICATIONS

DAAB members are relied upon, at appointment, to be experienced/knowledgeable in the type of work the Contractor is to carry out, experienced in interpreting construction/engineering contract documentation, and fluent in the Contract language for communications.
They warrant independence and impartiality throughout the Term and must immediately disclose any fact or circumstance that might call either into question.
Members shall have no financial/other interest in the Parties, the Contract or the project (beyond payment under the DAAB Agreement), shall not have been employed by the Parties or their Personnel in the preceding 5 years (unless fully disclosed), and shall not act in any judicial or arbitral capacity in relation to the Contract.
DAAB members shall not be appointed as arbitrators or called as witnesses in any arbitration under the Contract.

9.12 AVAILABILITY

Each DAAB member shall ensure availability during the Term (with prompt Notification of any exceptional circumstances), attend meetings, Site visits and hearings, and remain knowledgeable/informed about the Contract, Site and progress, including by studying documents and maintaining a current working file.
After appointment, the DAAB establishes a schedule of meetings/Site visits; meetings/visits occur at regular intervals of not more than 140 days and not less than 70 days (unless jointly agreed otherwise).
For urgent matters, if the DAAB agrees urgency, it shall use reasonable endeavours to hold an online meeting within 3 days of request and, if needed, visit the Site within 14 days thereafter.
The monthly fee covers being available on 28-days’ notice for meetings/Site visits/hearings, remaining informed and keeping the working file; the daily fee covers travel time, meetings/Site visits (and related reports), informal assistance, hearings, inter-member meetings (where applicable), and preparing decisions.
The Parties must cooperate, avoid compromising independence, keep the DAAB informed, and the Contractor coordinates logistics for meetings/Site visits.

9.13 IMPARTIAL

DAAB members must act fairly and impartially, give each Party a reasonable opportunity to present and respond, and adopt procedures suitable to the Dispute while avoiding unnecessary delay/expense.
All communications between the DAAB and a Party must be simultaneously copied to the other Party (and, for a three-member DAAB, sent to the chair with copies to the Other Members).
The DAAB may use a member’s own specialist knowledge in reaching a decision, within its powers and procedural fairness duties.
The Parties shall not request advice/consultation from a DAAB member except as required for DAAB Activities; DAAB Activities and documents are private and confidential.
Meetings/Site visits are held at regular intervals and/or at a written request of either Party; the DAAB sets the date/time in consultation with the Parties.

9.14 INDEPENDENT

DAAB members must be independent and impartial: no financial interest in the Contract/project (beyond DAAB fees), no interest in either Party or their Personnel, and not to have been employed by them in the preceding five years except as previously disclosed in writing. They shall not act in any judicial/arbitral capacity in relation to the Contract; must disclose relationships, facts or circumstances calling independence/impartiality into question; shall not seek/accept gifts; and shall not discuss/agree future employment with either Party (unless jointly agreed).
The Parties also undertake that a DAAB member shall not be appointed as arbitrator or called as a witness in any arbitration under the Contract.

9.15 LAWYERS

DAAB members are selected as suitably qualified persons; at appointment, each Party relies on members being experienced/knowledgeable in the type of work, experienced in interpreting construction/engineering contracts, and fluent in the Contract language.
The DAAB may (with Parties’ agreement) appoint experts, including legal or technical experts, and may use members’ specialist knowledge in deciding Disputes; it may also open up, review and revise Engineer determinations relevant to the Dispute.
Members shall not act as arbitrators or be called as witnesses in any arbitration under the Contract.

9.16 TERMINATION OF DAAB MEMBERS

Sub-Clause 21.1 provides for replacement or termination of a DAAB member. A replacement shall be appointed if a member declines to act or is unable to act as a result of death, illness, disability, resignation or termination of appointment; the replacement is appointed in the same manner as the replaced member was required to have been selected or agreed.

The appointment of any member may be terminated only by mutual agreement of both Parties, not by either Party acting alone.

Unless otherwise agreed, the term of the DAAB (including each member’s appointment) expires on the later of: (a) the date the Discharge under Sub-Clause 14.12 becomes (or is deemed) effective; or (b) 28 days after the DAAB has given its decision on all Disputes referred before the Discharge became effective. If the Contract is terminated, the term expires 28 days after either (i) the DAAB has given its decisions on all Disputes referred within 224 days after termination, or (ii) the Parties reach final agreement on all termination matters, whichever is earlier.

Under the DAAB Agreement, a member may resign at any time by giving not less than 28 days’ Notification; if the DAAB is dealing with a Sub-Clause 21.4 Dispute on the resignation date, the resignation does not take effect (except where the member is unable to act due to illness/disability) until after the DAAB has given its decision(s). The Parties may jointly terminate a member’s DAAB Agreement by giving not less than 42 days’ Notification.

If the member fails without justifiable excuse to comply with stated duties, the Parties may jointly terminate by recorded-delivery notice; conversely, if either Party fails without justifiable excuse to comply with its obligations to the member, the member may terminate by Notification. Any resignation/termination under these provisions is final and binding; a notice by only one Party under the joint-termination clauses is of no effect.

For non-payment, if a valid invoice remains unpaid 56 days after submission, the member may, after 7 days’ Notification, suspend services and/or resign.

If a member’s DAAB Agreement ends while a 21.4 Dispute is on foot, the 21.4.3 decision period is temporarily suspended and restarts in full from the date the replacement member is appointed; in a three-member DAAB, the other members continue but do not conduct a hearing or make a decision before replacement (unless the Parties and Other Members jointly agree otherwise).

These arrangements operate subject to any mandatory requirements under the governing law of the DAAB Agreement.

10.0 DAAB FRAMEWORK

10.1 GENERAL CONDITIONS OF DISPUTE AVOIDANCE/ADJUDICATION AGREEMENT

The appendix to the General Conditions of the 2017 FIDIC Red Book (Construction) contains the General Conditions of the DAAB Agreement and the DAAB Procedural Rules. The DAAB Agreement is a tripartite agreement between the Parties to the Contract and the DAAB member. The DAAB member is an individual and the appointment is personal. No assignment, subcontracting, or delegation is permitted.

The agreement will define whether the member is a sole adjudicator or one of three, and if three, which member is to act as chairperson.

The general provisions of the agreement define the period (term) of the DAAB and particularly define the start date (the “Effective Date”) and when the term expires. The Parties shall jointly appoint the DAAB within the time stated in the Contract Data (if not stated, 28 days after the date the Contractor receives the Letter of Acceptance, per Clause 21.1). The Effective Date takes effect as follows:
• when the Employer, the Contractor and the sole DAAB member have each signed the DAAB Agreement; or
• when, for a three-member DAAB, the Employer, the Contractor, the DAAB member and the Other Members have each signed their DAAB Agreements.

Unless the Parties agree otherwise, the term of the DAAB (including each member’s appointment) shall expire in accordance with Clause 21.1: on the date the 14.12 [Discharge] becomes (or is deemed) effective, or 28 days after the DAAB has given its decision on all Disputes referred to it before such discharge becomes effective, whichever is later. (If the Contract is terminated, Clause 21.1 applies to expiry of the DAAB term.)

When the agreements have taken effect, either or both Parties shall give a Notification to each DAAB member that the DAAB Agreement has come into effect. If such notice is not received within 182 days after entering into the DAAB Agreement, it becomes void and ineffective.

It is evident that when a DAAB has not been constituted at the beginning of a project then procedural delays may be encountered after agreement of the DAAB’s constitution but before it has jurisdiction to act. If it is considered that delays in the commencement of DAAB activities may give rise to extensions of the period under Clause 21.4 (period in which a DAAB has to reach a decision) then a further clause more closely defining the commencement date of the tripartite agreement should be considered. This may take the form of a definition of an actual commencement date or a date unrelated to any further notice by either of the Parties, such as the date of execution/signature of the DAAB Agreement alone.

The member is obligated to remain available to undertake the provisions of the DAAB Agreement (including being available on 28-days’ notice for meetings/Site visits under the DAAB Rules). A period of up to 182 days of silence is permitted before the agreement becomes void if no Notification of effectiveness is received. Parties should attempt in all cases to minimise delays between execution of the DAAB Agreement and the commencement of DAAB activities.

During periods of non-confirmation of the DAAB Agreement’s effectiveness the member is obliged to remain available to the Parties; however, the agreement is at risk of not proceeding and the member may be uncompensated for the period prior to termination or confirmation of the agreement. The long period of allowable silence prior to determination of effectiveness may in the long term inflate the costs of DAAB participation to the industry.

The agreement may be terminated by the resignation of the member. Applicable law may entitle the member to resign under certain conditions. The DAAB Agreement also entitles the member, in the case of non-payment of fees and expenses, to suspend services after giving not less than 7 days’ notice and/or to resign if payment is not received within 56 days after submitting a valid invoice; termination rights are set out in the DAAB Agreement (including Clause 9.7 and Clause 10).

Resignation is a very drastic action to be taken by the member and one which may have considerable consequences. Confidence of the Parties and their supporters in the DAAB system will be undermined if a member resigns in anything other than a genuine circumstance not already envisaged in the Contract.

10.2 WARRANTIES

The warranties of the member under the 2017 DAAB Agreement apply throughout the Term. Each member is appointed by both Parties and owes no allegiance to either. The member warrants and agrees that he/she is, and will remain at all times during the Term, impartial and independent of the Employer, the Contractor, the Employer’s Personnel and the Contractor’s Personnel, and shall immediately disclose in writing any fact or circumstance that could call into question such independence or impartiality or appear inconsistent with this warranty.

When appointing the DAAB member, each Party relies on the member’s representations that he/she is: (a) experienced and/or knowledgeable in the type of work the Contractor is to carry out; (b) experienced in the interpretation of construction and/or engineering contract documentation; and (c) fluent in the language for communications stated in the Contract Data (or as agreed between the Parties and the DAAB).

10.3 OBLIGATIONS OF THE DAAB MEMBERS

• No financial interest & independence
Further to the warranties above, the member shall: (a) have no financial interest in the Contract or project, except for payment under the DAAB Agreement; (b) have no interest whatsoever (financial or otherwise) in the Employer, the Contractor, the Employer’s Personnel or the Contractor’s Personnel; (c) not, in the five years before signing, have been employed by any of the foregoing (except as disclosed in writing before signature); (d) not previously have acted, and shall not act, in any judicial or arbitral capacity in relation to the Contract; (e) before signing, disclose in writing (to best knowledge and recollection) any relationships with the Employer/Contractor/their Personnel, any facts or circumstances calling into question independence or impartiality, and any previous involvement in the project; (f) while a member and for the Term, not be employed by nor negotiate future employment with the Parties/their Personnel unless jointly agreed; and (g) not solicit, accept or receive any gift or thing of value from them, except payment under the DAAB Agreement.

• Disclosure
If, after signing (or being deemed to have signed), the member becomes aware of any fact or circumstance that could call into question his/her independence or impartiality, or appear inconsistent with the warranty of independence/impartiality, the member shall immediately disclose this in writing to the Parties and the Other Members (if any).

• Compliance with rules
The member shall comply with the General Conditions of the DAAB Agreement (GCs), the DAAB Procedural Rules, and the Conditions of Contract relevant to the DAAB’s Activities; and shall not give advice to the Parties or their Personnel concerning the conduct of the Contract, except as required to carry out the DAAB’s Activities.

• Availability
The member shall ensure availability during the Term for all meetings, Site visits and hearings, and to remain knowledgeable about the Contract, Site and progress of the Works, maintaining a current working file as per Rule 4.3. The monthly fee covers being available on 28 days’ notice for meetings/Site visits/hearings (and urgent meetings/visits under Rule 3.6).

• Privacy (Confidentiality)
Subject to stated exceptions, the member shall treat the details of the Contract, all DAAB Activities and documents provided under Rule 4.3 as private and confidential, and shall not publish or disclose them without prior written consent of the Parties and the Other Members (if any). The Parties and their Personnel shall likewise treat the DAAB’s Activities as private and confidential; defined exceptions apply, and limited disclosures are permitted to a replacement DAAB member to ensure continuity. Any DAAB decision is admissible in evidence in arbitration.

• Advice and opinions → Informal Assistance
The member shall be available to give Informal Assistance when jointly requested by the Parties (Rule 2 – “Avoidance of Disputes”). The DAAB shall not give Informal Assistance during a hearing; if the Parties request it during a hearing, the hearing is adjourned while assistance is given, and if the adjournment exceeds 2 days, the period under Sub-Clause 21.4.3 is temporarily suspended until the hearing resumes.

Additionally, neither the Parties nor their Personnel shall request advice/consultation from the member regarding the Contract, except as required for the member to carry out DAAB Activities.

10.4 OBLIGATIONS OF THE PARTIES

The Parties agree that DAAB members shall not be solicited for advice or opinion except by a joint request of both Parties and with the agreement of the DAAB (Informal Assistance under the DAAB Procedural Rules).

The Parties undertake that no DAAB member shall participate in any future arbitration in connection with the Contract as arbitrator, expert, or witness, save as may be jointly agreed in writing by both Parties and the DAAB member.

The Parties also undertake not to hold any DAAB member liable for any act or omission in the carrying out of DAAB duties, except in the case of bad faith.

Whenever a Dispute is referred to the DAAB, the Parties shall, if requested by the DAAB, provide an advance/deposit for the DAAB’s expected fees and expenses for meetings, Site visits and hearings. Most hearings will be arranged during regular visits; however, extended hearings or additional visits may be required. Expenses for such visits are outside the routine payments under the DAAB Agreements and are covered by the advance/deposit and subsequent invoicing.

10.5 PAYMENT OF DAAB MEMBERS

The individual tripartite DAAB Agreement sets the precise payment method; the General Conditions of the DAAB Agreement define the scope.

Payment shall be made in the agreed currency(ies). The member is responsible for ensuring the agreed currency is acceptable.

The member’s remuneration comprises:

• Monthly Fee
Covers availability as required by the Agreement (including staying conversant with the project and maintaining files). For a chairperson, a higher Monthly Fee may be agreed due to administrative duties.

• Daily Fee
Covers time for meetings/Site visits/hearings during regular visits (including reasonable travel time), reading of submissions in preparation, deliberations, and preparation of decisions. If the member anticipates other chargeable activities, prior approval of the Parties should be obtained.

Unless otherwise agreed, the Monthly Fee and Daily Fee rates remain fixed for the first two years; future adjustments are by agreement. For projects in jurisdictions with volatile inflation, Parties should address rate adjustments in the base Agreement.

• Expenses
Reimbursement of direct, reasonable costs incurred in performing duties. Office/overhead costs are deemed included in the Monthly Fee.

• Taxes in the Country of the project
Fees and expenses are reimbursed net of any taxes imposed in the Country on the member’s invoices; any such Country taxes (including withholding) are to be reimbursed by the Parties, except where the member is a permanent resident in the Country.

• Payment timing
Each Party is responsible for one-half of the DAAB member’s remuneration, and the Parties are jointly and severally liable to the member for all amounts due. Invoices for fees and expenses are submitted in accordance with the DAAB Agreement; payment of all undisputed amounts is due within 56 days of receipt of a valid invoice. The Monthly Fee and agreed air fares are payable every 3 months in advance. Invoices for the Daily Fee and other expenses (excluding prepaid air fares) are submitted after each visit or hearing.

• Default of payment
If any amount remains unpaid 56 days after submission of a valid invoice, the member may, after giving not less than 7 days’ notice, suspend services and/or resign from the appointment; these remedies may run concurrently.

11.0 TERMINATION OF DAAB

It is the object of the DAAB to be in place for the duration of the project. The termination clause is included for the eventuality of a joint requirement, by agreement, to bring to an end the member’s appointment. The Parties may jointly terminate the DAA Agreement at any time by giving a Notification of not less than 42 days to the DAAB Member.

A DAAB Member may resign at any time for any reason by giving a Notification of not less than 28 days (or other period agreed by the Parties). If, on the date of the member’s notice, the DAAB is dealing with any Dispute under Clause 21.4 of the Conditions of Contract, the resignation does not take effect until after the DAAB has given all corresponding decisions.

If the DAAB Member fails, without justifiable excuse, to comply with Sub-Clause 5.1 of the DAA Agreement, the Parties may, without prejudice to their other rights or remedies, jointly terminate the member’s DAA Agreement by recorded delivery; the notice takes effect when received.

If either Party fails, without justifiable excuse, to comply with Clause 6 of the DAA Agreement, the DAAB Member may terminate the DAA Agreement by Notification; the notice takes effect when received by both Parties.

Any resignation or termination under Clause 10 is final and binding; however, a notice given under Sub-Clause 10.3 or 10.4 by either the Employer or the Contractor, but not by both, is of no effect.

Following resignation/termination, the member remains bound by confidentiality and, on request, must return originals of documents; the member remains entitled to any outstanding fees/expenses as of the termination date, except where Sub-Clause 11.5(b) applies (successful challenge).

12.0 DEFAULT OF MEMBER

If a challenge to a DAAB Member is successful under the DAAB Rules, the member’s appointment and DAA Agreement are deemed terminated with immediate effect on the date of ICC’s notification; the member is not entitled to any fees or expenses from that notification date. Certain DAAB decisions (and, for a sole-member DAAB, other Activities) during the challenge window become void and ineffective; a replacement DAAB Member shall be appointed without delay.

13.0 DISPUTES

Any dispute arising out of or in connection with the DAA Agreement, or the breach, termination or invalidity thereof, shall be finally settled by arbitration under the Rules of Arbitration of the International Chamber of Commerce (ICC).

14.0 TRIPARTITE AGREEMENT (DAAB AGREEMENT)

The standard form of tripartite DAAB Agreement is included in the “Forms” section of the 2017 FIDIC Red Book. It is an agreement between the Employer and the Contractor on the one hand and the DAAB member on the other, with two alternative forms (sole member; or one of three/chairperson), each incorporating by reference the General Conditions of DAAB Agreement and the annexed DAAB Procedural Rules.

Each form, regardless of presentation, contains the following sections (as structured in the published form):

• Details of the Parties and member (names and contact details)
• Situation of the Parties and purpose of the DAAB (recitals A–D, including constitution under 21.1/21.2)
• Validity/term linkage to the Contract (Agreement terms include Clause 21 applicability and GCs)
• Scope of work (member undertakes to act in accordance with the DAAB Agreement)
• DAAB procedures & terms of reference (incorporation of GCs and DAAB Rules)
• Payment terms and conditions (Monthly Fee/Daily Fee, currency; payment per GCs Clause 9)
• Parties’ undertaking and liability to pay (joint and several)
• Disputes & Governing Law (governed by stated law; defaults to Sub-Clause 1.4 law if not stated)
• Signatures (execution blocks and witnesses for Employer, Contractor, and DAAB member)

The DAAB is deemed constituted on the date all Parties and the DAAB member(s) have signed the DAAB Agreement; the DAAB Agreement takes effect on that date (the “Effective Date”) as defined in the GCs, with a post-signature Notification to be issued (failing which, after 182 days, the Agreement is void and ineffective).

15.0 CLAUSE 21.4

15.1 OBTAINING A DAAB DECISION

One of the primary objectives under the 2017 regime is early Dispute avoidance (Sub-Clause 21.3) and, where a Dispute does arise, expeditious resolution by the DAAB under 21.4. Either Party may refer a Dispute to the DAAB for its decision (whether or not any informal discussions under 21.3 have been held).

Where a Dispute is to be referred to the DAAB, the following apply:

The reference (“the reference” under 21.4) shall: (a) subject to 3.7.3 and the second paragraph of 21.4, be made within 42 days of giving or receiving (as the case may be) a Notice of Dissatisfaction (NOD) under 3.7.5; otherwise, the NOD lapses; (b) state that it is given under 21.4; (c) set out the referring Party’s case; (d) be in writing, with copies to the other Party and the Engineer; and (e) for a three-person DAAB, be deemed received on the date the chairperson receives it.
In specified situations (e.g., certain payment/termination notices and non-payment of financing charges), a Dispute is deemed to have arisen and may be referred under 21.4 without a NOD; 3.7 and 21.4.1(a) then do not apply.
The Parties shall promptly make available to the DAAB all information, Site access and facilities required for the decision; unless the Contract has been abandoned or terminated, both Parties shall continue to perform their obligations.
The DAAB shall complete and give its decision within 84 days after receiving the reference, or within such other period as the DAAB proposes and both Parties agree. The decision shall be written, reasoned, given to both Parties with a copy to the Engineer, and state that it is given under 21.4.
The decision is binding; both Parties shall promptly comply, whether or not a NOD is given. If payment is ordered, it is immediately due and payable; the DAAB may require security if there are reasonable grounds to believe the payee cannot repay should the decision be reversed in arbitration. The DAAB proceeding is not an arbitration and the DAAB shall not act as arbitrator(s).
If either Party is dissatisfied with the DAAB’s decision, it may give a NOD to the other Party (copy to the DAAB and the Engineer) within 28 days, identifying the matter in Dispute and the reasons for dissatisfaction. If the DAAB fails to give its decision within the 21.4.3 period, either Party may, within 28 days of that expiry, give a NOD. If no NOD is given within 28 days after receipt of the decision, the decision becomes final and binding.
Except as stated in the last paragraph of 3.7.5, and in 21.7 (Failure to Comply with DAAB’s Decision) and 21.8 (No DAAB in Place), no arbitration may be commenced unless a NOD has been given in accordance with 21.4.4. Where a NOD has been given, the Parties shall attempt amicable settlement (21.5); unless both Parties agree otherwise, arbitration may commence on or after the 28th day after the NOD date.

Administrative points:

For a three-person DAAB, the reference is deemed received on the date the chairperson receives it. The reference interrupts applicable limitation/prescription periods (unless prohibited by law).
Hearings, exchanges, Site visits and other procedural steps are set and conducted by the DAAB under the DAAB Procedural Rules (Rules 6–8), ensuring fair, impartial and efficient proceedings within the 21.4.3 timeline.

16.0 CLAUSE 21.7

16.1 FAILURE TO COMPLY WITH A DAAB DECISION

If the DAAB has given its decision and no Notice of Dissatisfaction is given within 28 days, the decision becomes final and binding on both Parties.

If a Party fails to comply with any DAAB decision—whether binding or final and binding—the other Party may, without prejudice to any other rights, refer the failure itself directly to arbitration under Sub-Clause 21.6 [Arbitration]; in such a case, Sub-Clause 21.4 [Obtaining DAAB’s Decision] and Sub-Clause 21.5 [Amicable Settlement] do not apply to this reference.

The arbitral tribunal may, by summary or other expedited procedure, order enforcement of that decision by interim or provisional measure or by award (as appropriate). Where the decision is binding (but not yet final), any such measure or award shall expressly reserve the Parties’ rights on the merits until resolved by an award.

This remedy does not prejudice any other contractual or legal rights available to the Parties.

17.0 CLAUSE 21.8

17.1 DISPUTES TO ARBITRATION

Disputes may be routed directly to arbitration if there is no DAAB in place (or no DAAB is being constituted), whether due to the expiry of its appointment or otherwise. In such cases, Sub-Clause 21.4 [Obtaining DAAB’s Decision] and Sub-Clause 21.5 [Amicable Settlement] do not apply, and either Party may refer the Dispute directly to Sub-Clause 21.6 [Arbitration], without prejudice to any other rights.

In some cases, although the DAAB may have ceased to exist due to the termination or expiry of its appointment period, its reconstitution on an ad-hoc basis may be considered by the Parties to provide an efficient forum for resolution, avoiding unnecessary delay and expense.

Where a direct referral to arbitration is adopted, the specific requirements of Clause 21.4 and Clause 21.5 will not apply.

18.0 PROCEDURAL RULES

The Procedural Rules embodied within the General Conditions and annexed to the DAAB Agreement guide the DAAB through the execution of its duties and define the day-to-day procedures of the board. Many routine matters are to be conducted utilising procedures which the DAAB may establish from time to time, and the Parties specifically empower the DAAB to establish the procedure to be applied in deciding a Dispute. The guidelines for the routine operation of the DAAB should be regarded as flexible in order to meet the varying circumstances that may arise during the life of the project.

In any event the board is constrained by two principal factors:
• to act fairly and impartially as between the Employer and the Contractor, giving each a reasonable opportunity of putting its case and responding to the other’s case; and
• to adopt procedures suitable to the Dispute, avoiding unnecessary delay or expense.

The above principles are to be considered within the context of the confined time periods defined within the Contract for DAAB decisions and the necessity to establish procedures most appropriate to the circumstances of each particular Dispute.

The standard procedure of the DAAB’s operation will include becoming familiar with the details of the project and construction methods and becoming conversant with the Contract documentation. Normally the DAAB convenes an introductory meeting with the Parties; at this meeting the DAAB establishes, in consultation with the Parties, a schedule of planned meetings and Site visits. Regular meetings/Site visits are to be held at intervals of not more than 140 days and not less than 70 days (subject to Rule 3.5/3.6 and except as required to conduct a hearing), unless otherwise jointly agreed.

The DAAB members agree between themselves their own operating procedures which will include such routine matters as:
• standard agendas
• standard format of meeting minutes
• scheduling of future meetings
• travel arrangements
• meeting room arrangements
• invoicing arrangements with the Parties
• facilities required for Site visits and meetings to be provided by the Employer.

The DAAB chairperson arranges to convene a first meeting at the Site (or online if jointly agreed by the Parties and the DAAB in exceptional circumstances) together with the Parties. At the first meeting the chairperson encourages discussion regarding the operations of the DAAB and solicits suggestions as to the frequency of meetings/visits, setting the date, time and agenda in consultation with the Parties.

At the first meeting routine communications and administrative issues will be discussed and agreed which will include:
• travelling and accommodation arrangements as necessary
• meeting room and secretarial service arrangements
• agreement of attendees
• agenda format
• format of meeting minutes
• conduct of Site visits and meetings
• format and frequency of standard reporting to the DAAB
• format of reporting from the DAAB to the Parties
• procedure for claims administration and tracking
• procedure for Disputes referral
• confirmation by the Parties of their own administration procedures.

The purpose of any DAAB visit to the Site is to enable the members to become familiar with and remain acquainted with the progress of the Works and to become aware of any actual or potential problems or claims; the board may give Informal Assistance when jointly requested by the Parties (Rule 2). The board is to be proactive without undermining the authority of the Parties or their personnel.

The attendees at such Site visits and meetings will normally be the members of the DAAB together with representatives from each of the Parties and the Engineer. If it is decided to make a submission to the DAAB to solicit advice or opinion (Informal Assistance), further attendees may be required.

All standard routine documentation from the Parties to the DAAB is copied to the other Party and, in a three-member DAAB, sent to the chairperson with copies to the Other Members. The Parties shall provide the DAAB with copies of documents the DAAB may request, including Contract documents, progress reports (Sub-Clause 4.20), programmes (Sub-Clause 8.3), Engineer’s instructions and Variations (Sub-Clause 13.3), Statements and certificates, relevant Notices and communications necessary to enable the DAAB to remain informed.

If a Dispute is to be referred to the DAAB then the procedures at Sub-Clause 21.4 are to be followed.

The general powers of the DAAB include (in addition to those under the Conditions of Contract and DAAB Agreement):
• the establishment of any procedure for Site visits, Informal Assistance and decisions
• deciding on jurisdiction and the scope of any Dispute
• adopting an inquisitorial role
• appointing experts with the Parties’ agreement
• deciding whether or not there shall be a hearing (or more than one)
• conducting any meeting/hearing as the DAAB thinks fit, not being bound by external rules
• taking the initiative in ascertaining the facts and matters required for a DAAB decision
• making use of a DAAB member’s own specialist knowledge
• deciding on the payment of financing charges in accordance with the Contract
• deciding on any provisional relief such as interim or conservatory measures
• opening up, reviewing and revising any certificate, decision, determination, instruction, opinion or valuation of the Engineer relevant to the Dispute
• proceeding with the DAAB’s Activities in the absence of a Party who, after Notification, fails to comply with GC 6.3.

The issue of a Referral Notice to the DAAB should not be hampered or delayed by restrictive or cumbersome contractual provisions. Where such supplementary processes exist, the DAAB may determine whether a Dispute is capable of submission directly to the board for its consideration. (Jurisdiction power per Rule 5.1(c).)

When the Referral Notice is served it should be accompanied by all relevant documentation and supporting materials. The wording of the Referral Notice should be concise and clearly state what the Claimant is asking the DAAB to decide, confirm the contractual provisions under which the claim is made and provide the supporting arguments; for a three-member DAAB, the reference is deemed received on the date the chairperson receives it.

The DAAB is under a duty to give each Party a reasonable opportunity to put its case and to respond to that of the other, and to adopt a suitable, efficient procedure in coming to its decision. The DAAB will study the Referral and the chairperson will issue procedural directions for the conduct of the reference, including whether to hold a hearing.

The DAAB has authority to:
• conduct any hearing it thinks fit;
• take the initiative in ascertaining the facts and matters required for a decision;
• make use of its own specialist knowledge;
• decide upon the payment of financing charges;
• decide upon any provisional relief;
• open up, review and revise any certificate, decision, determination, instruction, opinion, or valuation of the Engineer relevant to the Dispute.

Normally the procedural directions will include provision for the following:
• a timetable for the submission of a response/defence to the Referral
• preliminary issues
• reply to response (if required)
• reply to reply (if required)
• conduct a hearing or proceed on documents only
• hearing dates, format, translation of documents, attendees, witnesses, agenda, opening/closing statements in writing
• decision date.

A provision within the procedural directions may also be made in the event the Parties wish to alter the procedure or extend any time for documents; the DAAB may adjust procedural steps but will not, under normal circumstances, alter the decision date unless proposing a different period agreed by both Parties.

The matters referred may be capable of decision without the need for a hearing (documents-only). If a hearing is held, the DAAB controls date/place/duration, prior written submissions, inquisitorial procedure, document production, attendance, adjournment, and may proceed in absence of a duly notified Party. The DAAB shall not express opinions on the merits during any hearing, and shall not give Informal Assistance during a hearing (if requested, the hearing is adjourned; if adjournment exceeds 2 days, the 21.4.3 period is temporarily suspended until the hearing resumes).

19.0 DAAB HEARING

The hearing should be conducted in a manner that encourages openness, candour and a thorough disclosure of all pertinent information bearing on the matters in dispute. The meeting should include a number of basic stages:

• Registration
• Procedural Issues
• Preliminary Issues
• Jurisdictional Issues
• Referring Party
  o Opening
  o Witness submissions
  o Respondent questions
  o Witness re-submission / clarification
• Responding Party
  o Opening
  o Witness submissions
  o Referring Party questions
  o Witness re-submission / clarification
• Respondent summing up
• Referring Party summing up

It is normally prudent for the chairperson of the DAAB to ensure that the hearing does not end until both Parties have confirmed that they have nothing further to add.

The hearing will be convened at a convenient location for the Parties. This is not always at the job site. The presence of witnesses and advocates may determine that a location other than at the job site will be more convenient or more economical. The hearing rooms should be equipped with any necessary presentation equipment needed by the Parties and must provide adequate seating, table space and ventilation or air conditioning. Adequate refreshment facilities are essential for any successful hearing.

The conduct of the hearing should be such that hearing days are limited in ideal conditions to some 6 hours. The format of the hearing should also include adequate breaks and that meals are provided for attendees in private locations, convenient for the hearing location but within the same building. It is normally convenient for side rooms to be provided for each of the Parties, and for the DAAB members, in which private discussions may be held.

A normal DAAB hearing will not provide for the transcript of the meeting to be taken. On occasion recesses may be necessary for the Parties to consider their positions and to consider the evidence put to the DAAB and the DAAB may need time to deliberate on what inquisitorial line needs to be taken.

Witnesses are not normally questioned under oath. The DAAB process should be no more formal than necessary. The terms “examination” and “cross-examination” are not utilised when referring to witnesses and it is the function of the chairperson of the DAAB to act fairly and impartially and to put at ease as much as possible the Parties and the witnesses.

The Parties must agree to what extent they wish their witnesses to be present during the hearing. The DAAB has the authority to refuse admission to hearings or audience at hearings of any persons other than the representatives of the Parties and the Engineer. This provision is more relevant in jurisdictions which may insist that all meetings relating to disputes involving public funding should be open to the public. It is contrary to the spirit of the DAAB to have the press or any third party recording the procedures for any purpose.

The DAAB may proceed with the hearing in the absence of any Party who the DAAB is satisfied had received adequate notice of the hearing. The Procedural Rules allow the DAAB discretion to decide whether and to what extent this power is exercised. It is within the policy of natural justice to allow Parties to know what the claims are against them and for them to be given an opportunity to reply and defend themselves. Where Parties and their representatives originate from differing parts of the world problems with travel arrangements may exist and may well be created outside the control of those travelling. It is therefore prudent for the DAAB to ensure that prior to proceeding in any hearing ex-parte it is satisfied that the absent Party has no valid reason why not to attend and that all possible attempts to ensure attendance have been made.

During the hearing further documentation may be provided or requested by one of the Parties. The DAAB should discourage the production of volumes of new documents and submissions at hearings. These generally lead to more time required by the Parties to consider the documents and any necessary replies. More time will also be required by the DAAB to consider such documents.

Any original documents provided in copy format in the submissions should be provided at the hearing for scrutiny, should either Party so require. The DAAB members may also require sight of such materials. This provision should only be necessary in cases where the authenticity of documents is questioned. The Parties have provisions under Clause 20 of the 2017 Red Book to keep and allow inspection of contemporary records and to submit fully detailed claims with supporting evidence (see Sub-Clauses 20.2.3 and 20.2.4), and as such the necessity for such disclosure is limited.

The DAAB members must develop a protocol for their conduct at the hearing. It is normal for the DAAB chairperson to chair the meeting and control the participants, procedure and timetable. They should decide between themselves such matters as questioning format, whether through the chair or in open forum, but should not be reluctant to actively participate in the procedure. It is not normal protocol to interrupt the questioning of witnesses by advocates but certain circumstances may dictate that this is necessary. The normal format may be that DAAB questioning may be undertaken after the questioning by the other Party but before any re-submission questioning.

Having heard the Parties and asked any necessary questions the DAAB chairperson brings the hearing to a close. The DAAB members shall not express any opinions during the hearing concerning the merits of the arguments put forward by either of the Parties nor must they show favour to either Party at any time. They then meet in private after the hearing in order to have discussions and prepare the decision.

It may be convenient to locate the initial private meeting of the DAAB at the location of the hearing and immediately after the hearing itself. This will enable the members to have access to any documents of the Parties exhibited at the hearing but not submitted.

The initial meeting of the members has three primary objectives:

To develop a schedule and timetable for the conclusion of its deliberations
To decide if any further submissions are required
To achieve unanimous agreement
To develop a format and compose the Decision

The Procedural Rules state that the members shall endeavour to reach a unanimous decision. If the DAAB cannot reach a unanimous decision then a majority decision will become applicable. In such a case the reasoning of both the majority and the minority should be included in the decision. It is normally considered necessary by the majority members to require that the minority member specifies any aspects of the decision with which he or she disagrees together with the analysis for the disagreement. The minority member should also state what decision he or she would have made had he or she been acting as a sole member.

The presentation of the decision should be in a short form. In such a procedure as the DAAB, protracted and over-lengthy decisions are not in keeping with the spirit of the process.

The format of the decision will be such as to contain the following data:

A statement of the FIDIC clause under which the Decision is published (2017 Sub-Clause 21.4)

The identities of the Parties

The identity of the Contract

Outline of Dispute

The issues

The remedies sought

The positions of each of the Parties

Outline of the procedure adopted for the resolution of the dispute

The reasoning of the DAAB and a review of its opinion on the principles involved

Unanimity / majority statement

The Decision

Signature

Place and date of Decision

Confidentiality and circulation statement

The reasoning is an essential part of the decision. When properly written it may persuade the Parties that the DAAB has fully studied all relevant matters and has reached a conclusion similar to that which may be expected from an arbitrator. It may be the case that one of the Parties may have been unaware of the strength or weakness of any particular argument before the publication of the reasoned decision. The Conditions of Contract state that a DAAB decision is admissible in evidence in arbitration, and arbitrators may regard a well-reasoned decision as persuasive.

Corrections and clarifications under the 2017 DAAB Rules. After giving a decision, the DAAB may, on its own initiative within 14 days, correct typographical, clerical or arithmetical errors by addendum. A Party may also, within 14 days of receiving the decision, request the DAAB to correct such errors and/or to clarify any ambiguity; the DAAB may decline clarification requests at its discretion. Any addendum issued forms part of the decision, and the 28-day period for a Notice of Dissatisfaction runs from the date the Parties receive the addendum.

20.0 ENFORCEMENT

The parties have contracted to comply with any decision of the DAAB properly given. Under Sub-Clause 21.4.3, any amount ordered by the DAAB to be paid is “immediately due and payable” by the relevant Party “without any certification or Notice,” and the Employer is responsible for the Engineer’s compliance with the DAAB’s decision.

Sub-Clause 21.7 states that, if a DAAB decision has become final and binding and a Party fails to comply, the failure itself may be referred to arbitration for enforcement (including “summary or expedited procedures” or provisional measures). This referral is without prejudice to any other rights, and Sub-Clauses 21.4 and 21.5 do not apply to it.

The alternative method of enforcement by a contractor, during the course of the Contract, is by including the sum decided by the DAAB in a Statement under Sub-Clause 14.3 and having it reflected in the Sub-Clause 14.6.1 Interim Payment Certificate; the Employer must then pay under Sub-Clause 14.7. (Noting that, under Sub-Clause 21.4.3, DAAB-ordered amounts are due and payable without certification or Notice.)

Any further failure by the Employer to comply leaves the Contractor with remedies of suspension or termination in accordance with Sub-Clauses 16.1 and 16.2 (which expressly include failure to comply with a DAAB decision).

21.0 DAAB CHAIRPERSON

In the 2017 edition, the role of the chairperson is expressly referenced in the DAAB provisions and Rules. The “Referral Date” for a dispute is the date the chairperson receives the reference; all written communications are to be addressed to the chairperson (copied to the other members and the Parties).

The DAAB may issue an addendum to a decision to correct or clarify (e.g., to correct errors or omissions); the chairperson may advise the members and issue such an addendum agreed by the members.

Consistent with the above, the chairperson coordinates the DAAB’s procedure and communications and performs the functions assigned in the 2017 DAAB Rules; decisions and related communications are handled through the chairperson in accordance with those Rules.