The FIDIC 2017 suite of contracts (Red, Yellow, and Silver Books) introduced the Dispute Avoidance/Adjudication Board (DAAB) as a key improvement in dispute resolution. This post explains how DAAB jurisdiction is established, how the DAAB makes decisions on jurisdiction and admissibility, and the important difference between these two concepts. Special focus is given to time-barred claims under Sub-Clause 20.2, based on the FIDIC 2017 General Conditions, the DAAB Procedural Rules, and relevant legal commentary.
The DAAB in FIDIC 2017
Under Sub-Clause 1.1.22, the DAAB is a board consisting of either one member or three members (as stated in the Contract). It has two main roles:
- Proactive dispute avoidance (Sub-Clause 21.3), including regular site visits, meetings, and informal assistance.
- Formal adjudication of Disputes (Sub-Clause 21.4).
FIDIC strongly recommends appointing a standing DAAB at the start of the project. This allows the board to become familiar with the project and increases the chances of avoiding formal disputes.
DAAB decisions must be reasoned and are issued within 84 days of receiving the referral (Sub-Clause 21.4.3, which can be extended by agreement). The decisions are immediately binding — the Parties must comply promptly — but they are not final unless no Notice of Dissatisfaction (NOD) is issued within 28 days.
How DAAB Jurisdiction is Established
Constitution of the DAAB (Sub-Clauses 21.1 and 21.2)
The Employer and Contractor must jointly appoint the DAAB member(s) within the time period stated in the Contract Data. If no period is stated, the appointment must occur within 28 days after the Contractor receives the Letter of Acceptance.
A tripartite DAAB Agreement is signed by the Parties and the member(s). If the Parties cannot agree on the appointment, an appointing entity named in the Contract Data (or the President of FIDIC) makes the appointment.
Once the DAAB is properly constituted, it gains jurisdiction over Disputes referred to it under Sub-Clause 21.4.
Scope of Jurisdiction
The DAAB has broad jurisdiction over any Dispute “arising out of or in connection with the Contract or its execution.”
A “Dispute” (defined in Sub-Clause 1.1.29) normally arises when:
- A Claim or matter is submitted under Sub-Clause 3.7,
- The Engineer issues a determination (or it is deemed rejected),
- A Party issues a Notice of Dissatisfaction (NOD), and
- The Dispute is referred to the DAAB within 42 days.
The DAAB can decide on its own jurisction under Rule 5.1(c) of the DAAB Procedural Rules. In other words, the DAAB itself decides whether it has jurisdiction.
Jurisdiction vs. Admissibility in DAAB Decision-Making
- Jurisdiction refers to the DAAB’s fundamental authority and power to hear and decide the Dispute. It concerns whether the DAAB is properly constituted, whether a valid Dispute has been referred, and whether the subject matter falls within the scope of the Contract.
- Admissibility concerns whether the specific claim or Dispute is procedurally compliant and ripe for a decision on the merits at this stage, even if the DAAB has jurisdiction. Issues such as late notices and time bars usually affect admissibility or the substantive entitlement rather than removing jurisdiction entirely.
The DAAB addresses both jurisdiction and admissibility in its reasoned written decision.
Example: Time-Barred Claim
A Contractor becomes aware of a delaying event (for example, late access to the Site) on Day 0 but fails to give the required Notice of Claim within the 28 days required by Sub-Clause 20.2.1. Later, the Contractor submits a detailed Claim for extension of time and additional payment. The Engineer rejects the Claim, citing the late notice. The Contractor then issues a timely Notice of Dissatisfaction and refers the Dispute to the properly constituted DAAB within the 42-day period.
- Jurisdiction: The DAAB decides that it has jurisdiction. A formal Dispute has crystallized (Claim → Engineer’s determination/rejection → NOD → timely referral). The subject matter (entitlement to extension of time and additional costs) falls within the broad scope of Sub-Clause 21.4. The DAAB is therefore empowered to hear and decide the matter, including any procedural compliance issues.
- Admissibility / Merits: The DAAB examines the time bar under Sub-Clause 20.2. Because the initial Notice of Claim was submitted late (and assuming the Engineer raised the time-bar objection properly), the DAAB rules that the Claim is time-barred. The Contractor has lost its contractual entitlement to additional time or money. The DAAB therefore finds the Claim inadmissible on the merits and dismisses the request for relief, even though it confirmed its jurisdiction to decide the issue.
This distinction is important. The late notice does not prevent the DAAB from hearing the Dispute, but it does bar the Contractor from recovering anything. The DAAB can fully adjudicate the time-bar question rather than declining jurisdiction entirely.
Alternative Scenario: If a Party tries to refer a matter to the DAAB without first following the required steps (no Claim notice, no Engineer determination, and no NOD where required), the DAAB may ultimately rule that it lacks jurisdiction because no formal “Dispute” has arisen under the Contract.
Can DAAB Decisions Be Upheld or Challenged in Further Proceedings?
DAAB decisions are immediately binding. If a Party fails to comply, the other Party can refer the non-compliance directly to arbitration under Sub-Clause 21.7 for enforcement.
- If no NOD is issued within 28 days, the DAAB decision becomes final and binding.
- Even if a NOD is issued, the Parties must still comply with the decision until it is revised in later proceedings.
In arbitration (Sub-Clause 21.6), the arbitral tribunal generally reviews the Dispute on a de novo basis (fresh consideration of the merits). The tribunal can examine and, if necessary, correct the DAAB’s decisions on jurisdiction and admissibility. However, arbitral tribunals usually give significant weight to the DAAB’s reasoned findings. Successful challenges typically require proof of material breach of the Procedural Rules, excess of authority, or serious procedural unfairness under the governing law.
Best Practices for Parties
- Appoint a standing DAAB as early as possible and make full use of its dispute avoidance functions.
- Strictly observe all notice periods under Clause 20 to avoid time-bar and admissibility problems.
- When referring a Dispute to the DAAB, clearly identify the issues and address any potential jurisdiction or admissibility concerns with supporting evidence.
- Prepare comprehensive submissions, as the DAAB’s reasoned decision carries substantial weight in any subsequent arbitration.
Conclusion
The DAAB mechanism in FIDIC 2017 is designed to provide fair, expert, and relatively fast resolution of disputes. Understanding the difference between jurisdiction and admissibility — particularly in cases involving time-barred claims — helps Parties navigate the process more effectively and reduces the risk of procedural mistakes.
For any specific project, always refer to the full Contract documents, the latest FIDIC guidance, and seek advice from qualified legal and contractual professionals.
This article is published for general information purposes and does not constitute legal advice. Construction law is a specialist field and parties to FIDIC contracts should seek professional legal advice in relation to their specific circumstances. CMGuide Pty Ltd provides construction claims, contract management, and contractual advisory services. For more information, visit cmguide.com.au.