Dispute adjudication boards ‘under used yet highly valuable’ mechanism in construction contracts

Like any tool, a DAB requires a clear understanding of its purpose and operating methods to be effective – but used properly, with the right advice, DABs can play a crucial role in providing an effective and efficient platform for resolving disputes.

At a recent event hosted by Pinsent Masons in Paris James Perry, an arbitrator and experienced dispute board member in construction disputes, joined Pinsent Masons arbitration experts Gaëlle Filhol, William Brillat-Capello, Anne de Mazières and Laura Canet for an in-depth discussion on the role of DABs and how to get the best from this highly valuable dispute resolution mechanism.

Types of dispute boards

Dispute boards exist in several forms, each suited to different project needs and expectations.

A standing DAB is appointed at the start of the project and remains involved for its full duration. Because it follows the project continuously, it can intervene informally before disagreements crystallise, helping to defuse tensions early.

This model offers unique advantages and is the only truly real‑time mechanism, capable of unlocking operational impasses, facilitating the flow of technical and contractual information, and, where necessary, suggesting practical solutions tailored to the realities of the site rather than relying strictly on contractual wording. This kind of DAB is very well suited for dispute avoidance but can also adjudicate disputes.

By contrast, an ad hoc DAB’s primary function is to adjudicate, and it is constituted only once a dispute has emerged. As a result, it must first familiarise itself with the project context and documentation, requiring a substantial transfer of information that can limit its ability to act swiftly and fulfil a preventative function.

Some institutions have developed hybrid models. The Dispute Avoidance and Adjudication Board (DAAB), introduced under the 2017 FIDIC Rules, combines avoidance and adjudication functions and accompanies the project throughout its duration while issuing binding decisions when required.

Selecting the right panel

Beyond the chosen model, the effectiveness of a dispute board depends heavily on its members’ profiles. Event attendees agreed that a DAB’s composition is central to its success given the technical, contractual and often highly emotional pressures inherent in construction projects.

In common law jurisdictions, DABs are often composed of legally trained professionals, who tend to frame their work primarily in adjudicative terms and leave less room for informal assistance or facilitative dialogue. Somewhat counter‑intuitively, however, civil law jurisdictions often prove better suited to a DAB’s practical functioning, despite it being a mechanism originating in common law. Here, parties there tend to appoint technically trained members - such as engineers, project managers and industry specialists – that tend naturally to be more inclined to ask the “right questions” and to adjust their intervention to the operational realities of the site.

This ability to explore issues more openly and interrogate facts in depth ultimately aligns more closely with the dispute avoidance and problem‑solving dimension at the heart of the DAB.

In practice, this can create challenges for some members, who struggle to fully embrace the preventative dimension of the role. James Perry emphasised that the position demands a versatile profile: one that combines deep understanding of the technical and human dynamics of a construction site with solid command of contractual and legal issues and a natural affinity for legal creativity.

Choosing the appropriate dispute resolution mechanism

In complex construction projects, identifying the nature of the dispute is the first step towards selecting the appropriate mechanism: mediation, arbitration or DAB. Factors to be considered in that selection include the dispute’s severity, its timing compared to the project’s timeline, and the power dynamics between the parties.

Although mediation is valuable when parties seek to preserve their relationship and pursue a consensual settlement, as Perry highlighted it provides no guarantee of outcome, leaving it entirely dependent on the parties’ willingness to reach agreement.

In contrast, arbitration delivers a binding and final resolution but is highly formalised, often lengthy and costly, and does not necessarily align with the project’s need to maintain progress. On a tense construction site, arbitration can entrench positions, immobilise resources and delay practical resolution.

The DAB occupies an intermediary position. More flexible than arbitration and more directive than mediation, it can resolve technical issues rapidly without interrupting the works. Its preventative role is one of its greatest strengths, helping avoid disputes from developing into full‑blown conflicts.

Perry described the DAB as “mediation with teeth”. It relies on understanding and listening, much like mediation, but its authority to issue binding decisions helps ensure the parties’ engagement, and can be engaged on relatively simple matters that require a fast and focused response.

Nonetheless, there remains a risk of a DAB drifting into a “mini-arbitration”, particularly towards the end of a project when tensions tend to peak.

Contractual design: the key to DAB effectiveness

A well-designed contractual framework is essential to ensure the DAB functions effectively. The DAB’s mandate, procedures and intervention methods must be precisely defined to avoid procedural difficulties that could undermine efficient dispute resolution.

Perry stressed the importance of being able to “shift gears” depending on the matter referred to the DAB. This adaptability requires a clear, yet flexible, contractual structure. While FIDIC and ICC frameworks generally provide a robust basis for this, Perry expressed doubts over the increased procedural requirements introduced in the 2017 FIDIC suite, which may complicate the mechanism and increase the likelihood of disputes escalating to arbitration. In his view, the 1999 version is more streamlined and more conducive to dispute avoidance.

Moreover, parties do not always understand the full extent of the 2017 FIDIC provisions, leaving room for inefficiencies.

Speakers highlighted the value of contractual flexibility. Ideas such as agreeing a fallback mechanism for disputes, combined with optional pathways which may provide a more effective framework than rigid procedures defined in advance, were discussed. This flexibility reinforces party ownership of the process, allowing attention to focus on the project itself rather than entrenched positions. DABs can also be combined with alternative approaches, such as converting a DAB process into mediation, or referring specific issues to accelerated arbitration while quantum questions are handled separately.

Ultimately, effective use of the DAB requires a clear understanding from users of its role and the available options. Competent legal guidance and experienced project teams are essential, and the involvement of specialist construction counsel, who know how DABs work, can play a decisive role.

Enforcing DAB decisions

Enforcement of DAB decisions remains a key question, even if it does not apply in the majority of cases. Most DAB decisions are executed voluntarily, particularly when reasoning is clear and well-structured.

This trend is strongly supported by empirical data. According to the Dispute Resolution Board Foundation (DRBF), standing DABs escalate to arbitration in just 0.53% of cases where dispute avoidance is successful, and 2.97% where it is not. Ad hoc boards, in comparison, see escalation occur in 14% of cases.

These findings are consistent with the 2024 King’s College International Survey, which likewise reports high voluntary compliance rates and underscores the effectiveness of well‑designed DAB procedures.

Despite this, when not self-enforced, DAB decisions cannot generally be directly enforced because there is no enforcement mechanism equivalent to the ‘exequatur’ available for arbitral awards. There are exceptions to this some common law jurisdictions such as South Africa and Nigeria, where courts may compel compliance.

Where a party refuses to comply, the approach depends on the significance of the matter. For substantial issues, contractual measures such as suspension or termination may be considered. Where the dispute is narrower in scope, initiating arbitration remains the most effective recourse.

Parties may request a bifurcation, allowing the arbitral tribunal to rule first on noncompliance and issue a partial award compelling execution. Civil law courts are generally more reluctant to permit such bifurcation, reinforcing arbitration’s central role. The increasingly accepted “pay now, arbitrate later” principle further supports the mechanism’s effectiveness.

Other tools, such as compliance arbitration - an accelerated procedure designed to secure a swift, enforceable award in cases of non‑compliance - enhance the available options.

Several elements facilitate enforcement: high quality drafting of the DAB decision, the ability to submit it to an arbitral tribunal, and the growing use of consent decisions, all of which strengthen party commitment and encourage voluntary compliance.

Co-written by Anne de Mazières and Laura Canet of Pinsent Masons.