ICC to decide DAAB challenges under 2017 FIDIC contracts

  • 11 October 2018

The International Chamber of Commerce (ICC) has been selected by the International Federation of Consulting Engineers – more commonly known by its French acronym FIDIC – as the trusted dispute settlement body to decide on challenges filed against its Dispute Adjudication/Avoidance Boards (DAAB) Members.

FIDIC Contracts are notable for the requirement that the parties constitute a Dispute Avoidance and Adjudication Board (DAAB). All disputes must go through the DAAB process and may only be submitted to arbitration if this process fails.

Under the new FIDIC suite of contracts launched during FIDIC’s International Contract Users’ Conference in London last December, any challenge brought by parties against a DAAB Member will be decided by ICC and administered by the ICC International Centre for ADR.

The Centre administers all non-arbitration proceedings filed at ICC. This includes mediations (as well as other amicable dispute resolution proceedings administered under the ICC Mediation Rules), DOCDEX proceedings, expertise proceedings under the ICC Expert Rules and dispute board proceedings under the ICC Dispute Board Rules.

During its meeting of 28 September 2018, and in implementation of the ICC-FIDIC agreement, the ICC Executive Board approved three new Appendices to the ICC Dispute Board Rules which will replace the existing Appendix. The new Appendices integrate this novel service administered by the Centre. They also empower the Centre’s Standing Committee – previously competent to take administrative decisions only in the context of the Centre’s Expertise services – to take decisions under the ICC Dispute Board Rules. James Nicholson, President of the Standing Committee, welcomed the new service offered by the Centre saying:

“The Centre, supported by the Standing Committee, is ideally-placed with the industry, legal and procedural expertise to take on this new role. The Centre already deals very capably with a steady flow of construction and engineering cases each year under ICC’s Expert Rules. I expect this will be a long and beneficial collaboration between ICC and FIDIC.”

Pursuant to the three new appendices, a request for a decision on the challenge of a DAAB Member or Members should be submitted to the Centre by the challenging party within 21 days of learning of the facts and circumstances upon which the challenge is based. After informing the challenged DAAB Member(s) and inviting all interested parties to submit their comments, the Centre, with assistance from its Standing Committee, will decide on the challenge. Decisions on challenges will be final and conclusive.

A Note on ADR services administered by the Centre – including guidance on challenges of DAAB Members under FIDIC Contracts – will be made available shortly.

This latest collaboration with FIDIC is another milestone for ICC in becoming the leading dispute resolution service provider for construction and engineering disputes. Alina Leoveanu, Manager of the ICC International Centre for ADR said:

“As disputes become increasingly complex, parties to FIDIC Contracts can now rely on the Centre’s expertise and quality of service in dealing with challenges against Experts, Neutrals and Dispute Board members.”

Notably, construction and engineering disputes generate the largest number of cases filed with ICC Dispute Resolution Services. In 2017, 23% of all new arbitration cases and over 42% of new cases filed under the ICC Expertise Rules involved disputes from this sector.

Alexander G. Fessas, Director of ICC Dispute Resolution Services and Secretary General of the International Court of Arbitration, emphasised the importance of the latest collaborative effort between ICC and FIDIC:

“This new role entrusted to ICC is an indication of the strong relationship forged between our two organisations over six decades. We very much look forward to providing this new service to all FIDIC contract users.”

ICC and FIDIC have a long history of collaborative efforts ever since the original edition of the FIDIC Red Book in August 1957 which provided that the appointment of the arbitrator (or arbitrators) for the settlement of disputes under the contract would be administered by ICC under its Rules of Conciliation and Arbitration.

The relationship between the two institutions has continued to develop and strengthen throughout the years. ICC and FIDIC collaborate each year to host the International Construction Contracts Conference. This year’s conference took place in Tbilisi, Georgia in September and two ICC/FIDIC conferences will take place in 2019 in Shanghai and Sao Paolo.

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