INSIGHTS
Clause 21 – Disputes and Arbitration
27/01/2018
Get in touch
INSIGHTS
Clause 21 – Disputes and Arbitration
January 27, 2018
Get in touch
Clause 20 of 1999 Yellow Book, which previously covered multi-tier dispute resolution provisions, has been divided into two parts in the 2017 Yellow Book: Clause 20 and Clause 21. Clause 20 of the 2017 Yellow Book now covers Claims to the Engineer, and Clause 21 covers Disputes and Arbitration.
The dispute resolution mechanism in the 2017 Yellow Book still contains the following steps:
- Making a claim to the Engineer,
- Referring to the DAB,
- Attempting Amicable Settlement, and
- ICC
The main differences introduced by the 2017 Yellow Book are as follows:
- There is now a Dispute Avoidance/Adjudication Board (DAAB) rather than a Dispute Adjudication Board (DAB).
- There is now a standing DAAB rather than an ad-hoc DAB. The DAAB is appointed at the outset, unless Parties otherwise
- If one Party refuses to sign a DAAB agreement within 14 days of the other Party’s request to do so, then the appointing entity or official named in the Contract Data appoints the member, after which the Parties and the member(s) are deemed to have signed the DAAB
- Similar to the 2008 Gold Book, a new sub-clause for the avoidance of disputes has been introduced. This allows the parties to ask the DAAB to provide assistance and/or informally discuss and attempt to resolve any issue or disagreement.
- Reference of a dispute to the DAAB will be deemed to interrupt the applicable limitation period unless prohibited by the
- The amount awarded by the DAAB or the Arbitral Tribunal to any party shall become immediately payable without any certification or
- The DAAB decisions are now expressly binding on the
- A Notice of Dissatisfaction (NOD) can be drafted in respect of parts of the DAAB’s decision. The parts specified in the NOD and any parts affected by such part are deemed to be severable from the rest of the decision. The rest of the DAAB’s decision shall be final and binding on the
- Non-compliance with the binding but not final decision of the DAAB can be directly referred to Arbitration under the 2017 Yellow Book and the Arbitral Tribunal has the power to issue an interim or provisional measure or an award enforcing the The provisional measure or an award is subject to the express reservation that the rights of the Parties are reserved until the merits of the dispute are resolved by an award.
- The amicable settlement period has been reduced from 56 days to 28 days.
Please get in touch at joanne.clarke@howardkennedy.com or victoria.tyson@howardkennedy.com with your thoughts or to discuss any concerns.
Related
The Engineer under FIDIC forms of contract: Real-life questions
Introduction The 'Engineer' under the FIDIC forms of contract has long been a controversial figure – the Engineer is appointed by, may be deemed to act for, and is paid by the Employer, but nonetheless on many issues is required to act 'fairly' as between the Employer and the Contractor. This article looks at real-life
New Guidelines for Arbitration and Mediation in Indian Public Procurement Contracts: An Overview for International Practitioners
Introduction The Government of India has recently introduced important guidelines for arbitration and mediation in domestic public procurement contracts, representing a shift in how disputes under such contracts are to be resolved. These changes are particularly relevant for construction professionals and legal practitioners involved in India’s infrastructure and public sector projects. The Role of Arbitration
New Guidelines for Arbitration and Mediation in Indian Public Procurement Contracts: An Overview for International Practitioners
Introduction The Government of India has recently introduced important guidelines for arbitration and mediation in domestic public procurement contracts, representing a shift in how disputes under such contracts are to be resolved. These changes are
CAB to Resolution: Steering Clear of Conflicts
Introduction FIDIC and the Singapore International Mediation Centre (SIMC) both promote Appropriate Dispute Resolution ('ADR'[1]) procedures within the construction and engineering sectors. In August 2024 SIMC introduced a new Integrated Appropriate Dispute Resolution Framework ('INTEGRAF')
FIDIC 1999 Books – Commentary on Clause 2
Corbett & Co. has devised a helpful commentary on FIDIC 1999 books Clause 2. Clause 2 sets out certain obligations which are imposed on the Employer; however, this is by no means all the Employer’s obligations. The obligation to pay the Contractor, for example, is found in Sub-Clause 14.7 and the obligation to Take-Over the Works is found at Sub-Clause 10.1. The first obligation imposed on the Employer under this Clause is to give to the Contractor a right of access. Sub-Clause 2.1 needs to be read alongside Sub-Clauses 2.3 and 4.6, which make it clear that possession of the Site need not be exclusive. Sub-Clause 2.2 imposes on the Employer an obligation to assist the Contractor when requested to obtain permits, licences or approvals required by the laws of the Country. The obligation to reasonably assist is not an absolute obligation and generally will not mean the Employer will have to expend money on fulfilling the obligation. Sub-Clause 2.3 imposes on the Employer an obligation similar to that imposed on the Contractor under Sub-Clause 4.6. The Employer is responsible for any failure by its personnel to co-operate with the Contractor or to comply with safety regulations, take care of persons on Site, make sure the Site is reasonably free from unnecessary obstructions, and protect the environment. Sub-Clause 2.4 imposes on the Employer an obligation to show that financial arrangements have been made and are in place to enable it to pay the Contract Price. Sub-Clause 2.5 deals with the Employer’s Claims and requires that the Employer give notice and particulars of its claim before the Engineer makes a Determination under Sub-Clause 3.5. The Employer cannot set-off any claims it may have against the Contractor unless it complies with this Sub-Clause.