The use of dispute boards has been growing on large, international projects and this trend is expected to continue.
In an article for Construction Law, White & Case partner Rebecca Shorter looks at the history of dispute boards and the reasons behind their increased use, as well as the enforceability of dispute board decisions – looking at the ICC's publication of extracts from ICC arbitral awards relating to dispute board decisions in recent years – and how their use might develop in the future.
Shorter writes: "Construction projects involve risk, and the allocation of risk can give rise to claims. The success of statutory adjudication in the UK (and other jurisdictions) has demonstrated the need for, and benefit of having recourse to, an efficient and cost effective way of resolving issues as and when they arise on an ongoing project. Dispute board decisions (like adjudication) are binding on an interim basis, providing the clarity and cash flow that will help see a project through to completion."
"Further, dispute board proceedings are typically drafted into a contract as a pre-condition to a final form of dispute resolution (litigation or arbitration) in a multi-tiered clause. The aim of such clauses is for the number and scope of disputes that need to be referred ultimately to litigation or arbitration to be reduced.
"Dispute boards are creatures of contract rather than law, and parties can shape them in their contract into a form that best suits the needs of their project."
To know more about the use of dispute boards in international projects, read the full article on Construction Law (paywall).
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