The Differences between Standing and Ad-Hoc Dispute Boards

The main purposes of dispute boards are to help to prevent disputes and to deal with them quickly if a dispute does arise – FIDIC, for example requires the DAB to issue a decision within 84 days. Whilst such matters may be dealt with if the DAB is a standing board, it is difficult to contemplate how an ad-hoc DAB can achieve such goals.

A standing board is appointed and convened at the beginning of the project and is obliged to become acquainted with the project, the contract and the parties and to undertake site visits and keep abreast of matters. Thus, the board is available to provide advice and opinions on matters that may otherwise be elevated to disputes. If a dispute is referred to the board, the members are well equipped to start work on the matter immediately and should be able to provide a decision within the prescribed 84-day period.

An ad-hoc board however, is not appointed until a dispute has arisen. The board is thus not in place to provide any advice to the parties which is a major aspect of dispute avoidance. Additionally, it will probably take several months for the parties to select and agree on the dispute board members, to agree the terms and conditions of appointment and to make the appointments. Even when the appointment is made, the DAB will still need time to get up to speed on the project, the contract and the matters in question. It is easy to see therefore that any chance of speedy resolution of a dispute would be negated under such arrangements.

FIDIC has recognised the distinct advantages of standing boards and I understand that the new revisions to the rainbow suite of contracts will include standing boards across all contracts, whereas the current editions of the Yellow and Silver books do not require the appointment of a DAB until a party had given notice of a dispute.

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

Do you have any experience of either ad-hoc or standing dispute boards? Please comment below.