A Dispute Adjudication Board (DAB) is a specialized dispute prevention and resolution panel used primarily in construction and infrastructure projects, particularly under FIDIC contracts. Consisting of independent technical, contractual, or legal experts, a DAB evaluates disagreements during project execution, issuing binding or advisory decisions while work continues to prevent claims from accumulating until completion and acting as a pre-arbitral step in tiered dispute resolution.
Dispute Adjudication Boards (DABs) are specialized dispute prevention and resolution mechanisms used primarily in construction and infrastructure projects, particularly in contracts based on FIDIC models.
Their purpose is to allow certain disputes to be examined during project execution, avoiding the need for every contractual disagreement to wait until completion of the works before being resolved.
This makes dispute boards particularly relevant to the management of disputes while construction projects are still underway.
What Is a Dispute Adjudication Board (DAB)?
A Dispute Adjudication Board, also known as a DAB, is a specialized mechanism used for the prevention and resolution of disputes in construction and infrastructure projects.
Depending on the applicable contract, the board may consist of one or more independent professionals with experience in:
- technical matters;
- contractual matters; or
- legal matters.
One of its main characteristics is that it allows certain disputes to be examined while the project remains under execution.
DABs are particularly used in contracts based on FIDIC models. To learn more about these contractual models, see our article on FIDIC Contracts in Panama.
How Does a Dispute Adjudication Board Work?
When a dispute arises, the parties may submit it to the board in accordance with the contractually established procedure.
The DAB examines:
- the parties’ positions;
- the documentation; and
- other relevant elements.
It then issues a decision under the agreed rules.
The specific operation of the dispute board therefore depends on the applicable contract and the procedure contractually established by the parties.
Who Can Serve on a DAB?
Depending on the contract, a DAB may consist of one or more independent professionals.
Its members may have technical, contractual, or legal experience.
One of the main advantages of these mechanisms is that their members may possess specialized knowledge of the industry and, depending on the model used, of the development of the project itself.
This specialization may be particularly relevant in disputes involving construction and infrastructure projects.
DABs and FIDIC Contracts
Dispute Adjudication Boards are particularly used in contracts based on FIDIC models.
FIDIC contracts establish mechanisms for managing different situations that may arise during the execution of construction projects, including tiered dispute resolution mechanisms.
It is therefore essential to understand from the beginning of the project how the contractually established mechanism operates and what actions the parties must take when a disagreement arises.
Does a Dispute Adjudication Board Replace Arbitration?
Not necessarily.
In many construction contracts, dispute boards form part of a tiered dispute resolution system.
This system may subsequently lead to:
- negotiation;
- amicable settlement; and
- ultimately, arbitration.
A DAB and arbitration should therefore not necessarily be understood as mutually exclusive mechanisms.
The Importance of Understanding the Contractual Procedure
When a contract provides for a DAB or another dispute board mechanism, it is essential to understand from the outset:
- which actions are mandatory;
- the applicable contractual deadlines; and
- the consequences of failing to challenge a decision in a timely manner.
These elements form part of the contractually established procedure and should be considered when managing the dispute.
The analysis of the dispute resolution mechanism should therefore not begin only when the dispute reaches a later stage.
Dispute Boards as a Dispute Prevention Mechanism
Dispute boards respond to a practical reality in construction projects: allowing disputes to accumulate until the end of the project can considerably increase costs and damage the relationship between the parties.
Their use allows disagreements to be managed while the project continues to move forward.
In this way, the mechanism is not limited to addressing existing disputes but forms part of a strategy aimed at preventing contractual disagreements from accumulating until completion of the works.
The Importance of Managing Disputes During Project Execution
Proper structuring and use of these mechanisms allows disagreements to be managed while the project continues to move forward and may significantly reduce the scale of future disputes.
This is directly related to contract management during project execution.
In construction contracts, matters such as contractual procedures and documentation may become particularly important. For more on this approach in contracts based on FIDIC models, see FIDIC Contracts in Panama: Construction, Claims and Disputes.
DABs Within a Dispute Resolution Strategy
The existence of a Dispute Adjudication Board should be analyzed within the dispute resolution system established in the contract.
Depending on that contractual framework, the dispute board may form part of a system that subsequently leads to negotiation, amicable settlement, and arbitration.
It is therefore essential to understand from the outset the procedures, deadlines, and actions established contractually.
When a dispute reaches a stage at which the appropriate mechanism for continuing its resolution must be evaluated, it may also be relevant to consider the differences between arbitration and litigation.
Legal Advice on Dispute Boards, Construction and Arbitration
Dispute board mechanisms require an understanding of the contractually established procedure, the applicable deadlines, and the actions that must be taken during the development of a dispute.
In construction projects, their use may also form part of a tiered system that subsequently leads to other dispute resolution mechanisms.
The Litigation and Arbitration team at LAC Legal advises on the management and resolution of contractual and business disputes.
Does Your Contract Provide for a Dispute Adjudication Board?
Understanding the established procedure, mandatory actions, and contractual deadlines from the outset is essential for properly managing a dispute.
Contact LAC Legal to speak with our team.
Frequently Asked Questions About Dispute Adjudication Boards (DABs)
What Is a Dispute Adjudication Board?
It is a specialized dispute prevention and resolution mechanism used primarily in construction and infrastructure projects, particularly in contracts based on FIDIC models.
What Is the Purpose of a DAB?
It allows certain disputes to be examined during project execution, avoiding the need for every contractual disagreement to wait until completion of the works before being resolved.
Who Serves on a Dispute Adjudication Board?
Depending on the applicable contract, it may consist of one or more independent professionals with technical, contractual, or legal experience.
How Is a Dispute Submitted to a DAB?
The parties may submit the dispute to the board in accordance with the contractually established procedure. The DAB examines the parties’ positions, documentation, and other relevant elements and issues a decision under the agreed rules.
Are DABs Used in FIDIC Contracts?
Yes. Dispute Adjudication Boards are particularly used in construction and infrastructure projects involving contracts based on FIDIC models.
Does a DAB Replace Arbitration?
Not necessarily. In many construction contracts, dispute boards form part of a tiered system that may subsequently lead to negotiation, amicable settlement, and ultimately arbitration.
Why Are Contractual Deadlines Important?
Because it is essential to understand the applicable contractual deadlines and the consequences of failing to challenge a decision in a timely manner.
Can Dispute Boards Help Prevent Larger Disputes?
Proper structuring and use of these mechanisms allows disagreements to be managed while the project continues to move forward and may significantly reduce the scale of future disputes.