Amicable Disputes Settlement

• Published date: 23 December 2021
• Subject Matter: Corporate/Commercial Law, Contracts and Commercial Law
• Law Firm: MMA Law
• Author: MMA Law

Amicable disputes settlement is the most recommended method to settle any dispute between the contracting parties to save time, costs and to keep the amicable relationship between the contracting parties which will lead to continuous cooperation in further projects and contracts. Dispute Adjudication Boards were adopted through Clause 20 of the FIDIC Contracts (1999 Edition) which is different than Disputes Review Board which was firstly adopted during 1975 by the Colorado Department of Highways on the second bore tunnel of the Eisenhower Tunnel Project.

Most of the contracting parties misinterpret the relevant contractual clauses which form the mandatory steering Disputes Review Board "DRB" and arrange the required procedures which must be followed to reach an amicable settlement -if possible- for the disputes. There are various mechanisms to form a dispute board or similar boards, however that the most common formation methodology of DRB in contracts in State of Kuwait is through nominating representatives from the contracting parties.

Most of high value contracts (especially EPC Contracts) in vital sectors in State of Kuwait contain clauses which arrange the formation of a steering DRB including without limitation the disputes notices mechanism, DRB meetings timeline and the next stages of the amicable negotiations if the DRB was not able to finalize fair amicable settlement acceptable for the contracting parties. The next stages will be - probably- the negotiations between the top managements (i.e. CEOs) of the contracting parties to avoid commencing litigation or arbitration which may affect the project contractual completion dates and its scheduled milestones.

Most of contractors ignore the clauses related to DRB and do not appoint their members in DRB since the contract...