Dispute Adjudication Boards in (international) construction agreements
What is a Dispute Adjudication Board?
A Dispute Adjudication Board (‘DAB’) is meant to prevent disputes from escalating and it is established to promote the resolution of disputes while construction is still underway. Because of its promptly response, it is often useful as a method to prevent a dispute to be brought to court or an arbitral tribunal.
One of the reasons why the DAB is considered to be a success, is the high level of acceptance of its decisions by the parties. Both parties chose – by agreement – to use a DAB as a method of (alternative) dispute resolution and the parties appoint the members of the DAB themselves. Furthermore, the DAB will likely provide a thorough substantiation of its decision as a result of the legal and technical experience of its members and their involvement in the project, which makes the decision even more acceptable for the parties involved.
The difference between a Dispute Adjudication Board and a Dispute Review Board
The DAB must however not be confused with the Dispute Review Board (‘DRB’). The main difference between those two boards is that the DRB gives recommendations – non-binding advice – and the DAB makes (conditionally) binding decisions regarding disputes.
A DAB decision is (conditionally) binding on parties
A DAB decision is (conditionally) binding on the parties and they have to promptly give effect to it. If a party does not agree with the decision of the DAB, it may send a ‘Notice of Dissatisfaction’ within a contractually agreed term after the decision has been rendered. Nevertheless, the decision of the DAB will still be binding on both parties. This only changes if the decision has – in a later stage – been revised.
If you would like to know more about Dispute Adjudication Boards in international construction agreements, our partner and Construction law specialist Jacob Henriquez has written an annotation on this matter regarding a judgement of the Court of First Instance of Curaçao (ECLI:NL:OGEAC:2018:19). This annotation was published in the Dutch Construction Law Review in February 2019 (TBR 2019/24).