General Conditions Of Dispute Board Agreement
Posted on December 9, 2020
All forms of FIDIC contracts have provisions applicable to dispute resolution bodies. As a result, much of the case law and guidelines for dispute resolution bodies relate to the interpretation and application of FIDIC`s dispute resolution rules. 3 Hearings are held in the presence of all DB members, unless, in the circumstances and after consultation with the parties, the DB decides that the hearing must take place in the absence of a DB member. Prior to the replacement of a DB member, a hearing with the other members of the DB can only take place with the agreement of all contracting parties, in accordance with Article 7, paragraph 6. (2) the ad hoc ATM, which is designated after a dispute.  Most contracts that include dispute resolution bodies require that a dispute must first be referred to a dispute resolution body before proceeding with arbitration.  Problems can arise when a party obstructs or delays the process of obtaining such a decision or goes directly to arbitration. In these circumstances, an arbitral or judicial tribunal may be referred to decide whether it can deal with the dispute without a dispute resolution decision. The question is whether it is a question of jurisdiction or admissibility. It depends on the approach of the arbitral tribunal.
If the court is treated as a matter of jurisdiction, it should dismiss the case. When the court is treated as a question of admissibility (i.e. a procedural issue), it may suspend the arbitration process until the dispute resolution body is established, if it does not exist and/or until it has made a decision or recommendation on the dispute.  What is being applied is actually a contractual agreement. The usual use of non-compliance with the decision of the dispute resolution body would constitute an appeal for breach against the defaulting party. Therefore, a party`s failure to comply with a dispute resolution decision is a dispute within the underlying contract, which must be referred to arbitration proceedings and seek an arbitration award. This assumes that the issue of non-compliance should not be raised first, even for another dispute resolution decision as a precondition for arbitration.  Since the real purpose of the regulations is to avoid the time and cost of international arbitrations, the use of dispute resolution procedures will generally be a precondition for arbitration.  Given the exclusivity of dispute resolution bodies, which are only a creature of the treaty, it is advisable to choose flexible and specific formulations when developing ad hoc dispute settlement contracts, in order to avoid unscrupulous tactics and tedious procedural conflicts, while ensuring the effectiveness of the procedure.
The sub-clause provides that a party may directly refer non-compliance with an ATM decision to arbitration proceedings without following the dispute resolution provisions. This resolves the question of whether a party should request a new decision on the ATM or conduct amicable discussions before a decision is implemented.