Dispute boards are created by contract and aid the parties in resolving their disagreements. In the last twenty years there has been an increasing demand for less adversarial dispute resolution methods such as mediation, conciliation and dispute boards. The great benefit of using a standing dispute board is that its members may be called upon as soon as a problem arises and help the parties resolve their differences before they become polarised in their views.

The dispute avoidance role of the standing board should be emphasized: the dispute board encourages the parties to solve their own problems, creating an atmosphere where the parties communicate and recourse to the advisory role of the board. Resolving conflicts at an early stage, or even before they arise, is an obvious benefit that greatly minimises costs , and reduces loss of productive time and goodwill between the parties.

The Chartered Institute of Arbitrators (the “CIArb”) offers the international business community the CIArb Dispute Board Rules, which cater to any medium or long-term project, whether construction, IT, commercial etc.

The Rules provide for two types of Dispute Boards:

👉 Dispute Review Boards and

👉 Dispute adjudication Boards.

The Dispute Board Clause does not in itself provide for arbitration. If the parties wish to provide for arbitration, they should ensure they have inserted the relevant provisions into their contractor as required under the applicable law.

It should be noted that,

👉If the Parties have chosen the implementation of a DRB, they are not bound by the DRB’s Recommendations. (Article 3)

👉If the Parties have chosen the implementation of a DAB, they are bound by the DAB’s Decisions. (Article 4).

Powers of the Dispute Board – (Article 16)

👉 Where the Rules are silent and in the absence of an agreement of the Parties with respect thereto, the DB is empowered to:

a) establish the procedure to be applied in making a Determination.

b) decide upon the DB’s own jurisdiction, and as to the scope of a Dispute referred to it.

c) call meetings, site visit and hearings, and conduct hearings as it thinks fit, being bound only by the Rules and the Contract.

d) take the initiative in ascertaining the facts, law and documents required for a Determination, and question the Parties, their representatives and any witnesses they may call in the sequence it chooses.

e) make use of its own specialist knowledge and determine the language of the proceedings

👉 When the DB is composed of three Members, it shall make every effort to achieve unanimity in deciding which proceedings to follow. If unanimity cannot be achieved, the procedure shall be established by majority vote.