Dispute Resolution Under FIDIC 2017

What you need to know

Following our briefing note which covered the new features in the FIDIC 2017 Suite more generally, this note deals specifically with the dispute resolution updates.

A number of key changes seek to encourage dispute avoidance, such as the heightened role of the Dispute Avoidance / Adjudication Board ("DAAB") and the splitting out of the 'Claim' and 'Dispute' procedures. The 2017 Suite also includes more prescribed notice and time bar provisions in relation to Claims and Disputes which will increase the administrative burden on the Parties and the Engineer. The Procedures for Contractor and Employer Claims have also been changed.

Key changes to dispute resolution provisions

The broad dispute resolution framework of the FIDIC 1999 Suite remains the same in the FIDIC 2017 Suite, i.e. Notice of Claim; Determination by Engineer / Employer's Representative; Decision by DAB / DAAB; Arbitration. However, significant changes in the detail have been made. These include:

Splitting 'Claims' and 'Disputes': Clause 20 (Claims, Disputes and Arbitration) of the 1999 Suite has been split in two. Under the 2017 Suite, Clause 20 addresses Claims and Clause 21 addresses Disputes. This change emphasises the FIDIC distinction between Claims and Disputes, i.e. a Claim is an assertion of an entitlement under the terms of the Contract, and a Dispute arises when a Claim is rejected. Employer and Contractor Claims: Under the 1999 Suite, Contractor and Employer Claims were dealt with separately, and had different procedural requirements under Sub-Clauses 2.5 and20.1 respectively. Clause 20 of the 2017 Suite deals with Contractor Claims and Employer Claims together and the same rules apply to both. Early Warning System: New Sub-Clause 8.4 provides that each Party (and the Engineer, where applicable) shall advise the other in advance of any known or probable events or circumstances which may adversely affect the works, Contract Price or progress. Here, FIDIC appears to have borrowed from the approach taken in the NEC Suite of Contracts. Notice of Claim: New Sub-Clause 1.3 requires Notices (including Notices of Claim) to be identified as a Notice and refer to the provision of the Contract under which it is issued, which aims at limiting the scope for Disputes relating to the validity of a purported Notice. Claim Time Bars: Under new Sub-Clause 20.2, both the Contractor and the Employer wishing to make a Claim must provide a Notice of Claim to the...