The DAAB: how the dispute board works

Disputes are inevitable on international projects. FIDIC answers this not with “straight to court”, but with a multi-step staircase, at the centre of which sits the DAAB — the Dispute Avoidance/Adjudication Board.

What the DAAB is

The DAAB is a standing board of one or three independent specialists, appointed at the start of the project for its whole duration. Its dual task is reflected in the name:

• Avoidance — to help the parties avoid disputes: the board knows the project, visits the site, and can give informal assistance.
• Adjudication — if a dispute does arise, to decide it.

Permanence is the key difference from the earlier approach: the board is not assembled “for a dispute”; it accompanies the project from the very beginning.

The dispute staircase (2017)

1. Engineer’s determination (Sub-Clause 3.7) — most matters first go through the Engineer’s agreement or determination (except the Silver Book).
2. Referral to the DAAB — if there is no agreement, the dispute is referred to the board.
3. DAAB decision — the board issues a decision.
4. Notice of Dissatisfaction (NOD) — a dissatisfied party files a notice within the set time.
5. Amicable settlement — a period to try to settle peacefully.
6. International arbitration — the final stage (usually under the ICC rules).

Why a DAAB decision is binding immediately

A key point: a DAAB decision is binding with immediate effect, even if one party disagrees and has filed an NOD. The parties must comply with the decision and keep working; the dispute on the merits may later reach arbitration, but the money/actions under the DAAB decision must be carried out at once.

The logic is simple: the project must not stop because of a dispute. First comply with the decision, then, if necessary, challenge it.

If an NOD is not filed in time, the DAAB decision becomes final and binding.

What this gives the project

• Speed. Disputes are resolved during the project, not over years of arbitration after it ends.
• Preserved relationships. An independent board reduces escalation and helps the parties agree.
• Cash flow. The immediate enforceability of decisions prevents payments being “frozen” for the duration of a dispute.

The DAAB works when the board is formed in time and engaged with the project, and the parties follow the procedure with discipline. If you need to set up a dispute-resolution mechanism or prepare to refer a dispute to the DAAB, request a consultation.