DISPUTE BOARDS – A GLOBALLY GROWING POPULARITY BUT A LIMITED USE IN THE MIDDLE EAST
Over several decades, the construction industry has demonstrated that the use of dispute boards (DB) is an effective means of resolving disputes. Recently, the Dispute Resolution Board Foundation (DRBF) identified that the number of projects with DBs is over 2800 across nearly 60 countries, with a construction value of US$280bn. Further, just over 98 percent of matters referred to a DB are resolved, with only 2 percent progressing to arbitration or litigation.
DBs can be divided into three groups: dispute review boards (DRBs), dispute adjudication boards (DABs) and dispute conciliation boards. This article shall focus on the most popular form: DABs.
Despite the resounding success of DBs globally, the adoption of DBs in the construction industry in the Middle East remains low. This paper sets out some of the proven advantages of DBs and explores some of the reasons why the construction industry in the Middle East has been reluctant to use DBs.
What are DBs?
DBs developed in the US during the early 1950s as DRBs, as a means for amicable dispute resolution. During the 1960s, DRBs gained popularity on large civil engineering projects, mainly in the US. Progressively, the use of DBs was introduced into standard form construction contracts as the benefits of alternative dispute resolution (ADR) became more widely recognised. A number of countries also began implementing a statutory framework to promote ADR. For example, in the UK the Housing Grants, Construction and Regeneration Act 1996 introduced a statutory right to adjudicate disputes under construction contracts. Lord Ackner praised the adjudication process, stating: “Adjudication is a highly satisfactory process, it comes under the rubric ‘pay now, argue later’ which is a sensible way
Oct-Dec 2019 issue
King & Spalding LLP