Dispute Boards

The FIDIC forms of contract are the most widely used contracts for construction works in the Middle East and North Africa. These contracts have included provisions for the appointment of dispute boards since 1999, but the MENA region has been very slow to adopt their use.

 

Disputes Are on the Rise in the Middle East

EC Harris’ Global Construction Disputes Report 2012 advises that the average value of disputes has reduced globally, but has increased in the Middle East. Mike Allen, Global Head of Contract Solutions at EC Harris says: “The Middle East saw a flood of major disputes last year. Over the past few years we have seen a reluctance to settle in the Gulf region, but this has been replaced by a stronger desire to do business and resolve disputes as the economies strengthen. On the whole, however, disputes are still costing the industry time and money.’  It has been calculated that 50% of legal costs within the construction industry are dispute related.

 

Governments and Institutions Make Dispute Resolution Mandatory

Many countries outside the MENA region now adopt dispute boards as a means of avoiding and resolving disputes and many government bodies include them as requirements in their construction contracts. Some countries, such as the United Kingdom, have even introduced legislation to ensure that attempts to settle disputes by adjudication are made prior to the commencement of litigation.

Dispute boards are mandatory for projects funded and supported by the World Bank, the European Union, the European Investment Bank, European Bank for Reconstruction and Development and the Asian Development Bank.

The International Chamber of Commerce, FIDIC and the Institution of Civil Engineers also recommend their use.

 

Why is the MENA region lagging behind? 

Why then, when dispute boards have proved to be successful in other regions, has the MENA region been so slow to adopt their use?

This section of Dispute Boards MENA attempts to provide information to those involved in construction contracts to help them make informed decisions about the use of dispute boards.