Construction Law/FIDIC 2010

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Question
Dear Majid Khan
I am again asking you a question and expect to receive another professional answer. What are the procedures to be adopted by a Dispute Board to deal with a dispute under FIDIC harmonized MDB Document? One of the contractors wants to initiate these proceedings. I hope you will guide us.
Izza

Answer
Dear Izza

Welcome again. The FIDIC 2010 clearly describe the procedural rules for the Dispute Board. Under Rule No. 8 (a), The Employer and the Contractor (the Parties)empower the DB to establish the procedure to be applied in deciding a dispute. For this purpose, the Chairman DB and the members (in case it is a three member board), in initial meetings with Employer and Contractor decide upon the rules for deciding disputes. He will then formulate these rules and, after obtaining consent of the Employer and Contractor, will circulate these rules among the members and the parties. Generally speaking, the procedure adopted is as under:

The Contractor shall refer any dispute with the Employer, following a dissatisfaction with the Engineer's Determination under Clause 3.5, to the Chairman DB and the Members and to both the parties and the Engineer. This referral to DB must be accompanied by all the supporting documents and references to clauses of the Contract. The Chairman after consultation with the members decides whether to admit the referral for hearing or not. If not, then he will inform the contractor of the basis of rejection. He may need additional information from the Contractor to enable the referral to be heard. If yes, then the Chairman will declare the date of receipt of referral as "Day Zero" as the decision is to be given with 84 days. The Chairman will then advise the Employer and the Engineer to submit their position papers with supporting documents to him, the Members and the parties within the time stated in the rules. The Contractor will be given a chance to reply to any new points raised by either the Employer or the Engineer. After receipt of the rejoinder from the Contractor, the Chairman DB will set a date for hearing where the Contractor, the Engineer and the Employer will make their final presentation to all the DB members. The DB members will be free to ask any question to understand the issue. For this purpose the parties and the Engineer will also be allowed to ask questions addressed to the Chairman and replies also addressed to the Chairman to avoid any cross talk and keep the atmosphere cool.

After the completion of hearing, the members will meet in private and try to reach a consensus on the decision. The chairman will then draft the decision of the DB and after obtaining consent from the other two members, will dispatch the decision to the parties and to the Engineer. In case of a split decision, the opinion of the majority will prevail. The decision of the DB, under FIDIC 2010 is to be implemented as and when received. It may be reversed by Arbitration or a decision of the Court.

I have tried to explain briefly the procedure adopted by DB to reach a decision. I hope that it will fulfill your requirements. Kindly let me know if there are still any queries.

Abdul Majid Khan  

Construction Law

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Abdul Majid Khan

Expertise

I am interested in questions related to time Extension, Liquidated Damages,variations, price adjustments,payments, disputes and Dispute Board under FIDIC IV, FIDIC 1999 and FIDIC 2006 Harmonized Documents.

Experience

I have been heading the Construction Management Division and Contract Divisions of National Engineering Services Pakistan (PVT) Limited, NESPAK, the largest Consulting Engineering Firm in Pakistan, for more than seven years and two years respectively. I have also worked as "The Engineer" on a number of projects. I have been working in Saudi Arabia for about seven years on a road projects. Additionally I worked as Arbitrator and am member of few Dispute Boards in individual capacity on Asian Development Bank funded projects.

Organizations
Inland and in Middle East. I have worked with National Engineering Services Pakistan (Pvt) Limited (NESPAK)as my Employer for more than 27 years in Pakistan. In Saudi Arabia I worked for Rashid Engineering, Consulting Engineers during 80s. After retirement I provided advisory services to NESPAK on technical and contractual matters to its various divisions and lately I was appointed as Advisor to Managing Director NESPAK on Technical and Contractual matters. Currently I work as Free Lance Contract Specialist on Fidic Form of Contracts.

Education/Credentials
I am a graduate with a B.E (Civil Engineering) degree. My year of graduation is 1970.

Awards and Honors
A few appreciation Letters and Honorariums during my service in NESPAK. I remained member of Administrative Committee and Board of Management of NESPAK. I had been part of the Management Committee in the absence of Managing Director.

Past/Present Clients
Most of the Clients used to be Government Departments, Corporations and Authorities. In Saudi Arabia the Client was Ministry of Communications. As Arbitrator and Dispute Board (DB) member, I provide services to various Government Departments and Contractors.

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