Dispute boards and construction contracts

Abstract

Construction contracts are known for their complexity, specificities and long duration. Thus, given the need for immediate response to problems during the execution phase, Dispute Boards (DB) arose. DB are a committee responsible for assisting the parties in their disagreements, preventing disputes, providing them with a quick, economical and efficient solution, preventing the emergence of a dispute. More than an extrajudicial means of conflict resolution, as advocated by certain authors, or pre-arbitral chamber, as called by others, a DB is, above all, a dispute prevention mechanism. It avoids not only the breach of contractual relations, but also warns against possible losses resulting from the interruption or suspension of the contract. In the construction industry, the establishment of this committee allows the work to be monitored from the very beginning by specialists, minimizing potential disputes that would jeopardize the effective compliance of the contract. The results are extraordinarily positive, reflecting on the effectiveness of the contracts. Once fully fulfilled, they satisfy not only the interests of the contracting parties but of third parties which are acquiring autonomous parts of the constructed property. Judicial delays and their natural burdens are avoided. With this study, we intend to contextualize the DBs, demonstrating their importance, highlighting their contribution to international trade and explaining the reason for their success. We will allude to some DB’s paradigm examples. Reference will also be made to the rules created by the Paris International Chamber of Commerce (JRC), as well as the reception of DBs by the Fédération Internationale Des Ingénieurs-Conseils (FIDIC) contracts.