Can the Engineer Serve as a DAB?

I recently attended a course to become a FIDIC Accredited Trainer. As part of the course assignments, the candidates were given a list of questions put forward on training courses by the delegates and the candidates had to give answers. One such question was as follows:

As per our Contract, the Engineer shall act as the Dispute Adjudication Board. As per Contract the Engineer is XYZ Consulting Ltd. The Engineer has appointed a person whom we do not know who shall act as the DAB. Please advise us whether this is a correct approach.

My answer was as follows:

If you have agreed, by entering into the Contract, that the Engineer shall act as the DAB, then you have to accept this. Questions must be asked however, about the effectiveness and correctness of such an arrangement. For example:

A DAB should be impartial; the Engineer is not

The Engineer has appointed another party, whereas your Contract provides that the Engineer shall act as the DAB

The DAB is subject to the agreement of both Parties; the third party has not been agreed by the Contractor

The DAB warrants that it is independent and has no interest in the project or the Parties. The Engineer does not qualify in this respect and can therefore not enter into an agreement to act as the DAB.

This arrangement is therefore totally unworkable.

Why did your company sign a contract that has such an unworkable provision and why did the Engineer, who presumably advised the Employer on the drafting of the Contract, accept to be party to such an unworkable arrangement?

This guest blog post was written by Dispute Boards MENA listed practitioner, Andy Hewitt