You are here:

Construction Law/Clause 20.4 - FIDIC Harmonized Edition

Advertisement


Question
Dear Liaqat Sb

Clause 20.4 of the FIDIC Harmonized Document says'"The decision of the DB shall be binding on both parties, who shall promptly give effect to it unless and until it shall be revised in an amicable settlement or an arbitral award given below".

Kindly explain whether this (who shall promptly give effect to it) means that the parties will give effect to the decision promptly and implement it without waiting for the amicable settlement or arbitral award in case a party disagree with the decision and give notice to the other party for commencing arbitration or the implementation will be delayed till the outcome of this exercise.

Moreover, in case a party disagrees with the DB decision and notifies the other party of commencing the arbitration and do not implement promptly or partially implement the DB decision then whether the other party can consider it a fresh dispute and refer it to the DB for decision regarding the implementation of the DB decision. Is there any other course of action available to the other party as Clause 20.7 applies when the decision becomes final and binding under clause 20.4 last para.

Please advise.

Thanks and regards

Answer
Dear Abdul Majid khan Sahib
Good to hear from you and thank you for this interesting question.
In response,allow me to quote a similar case  from a recent singapore court in which  a 'binding but not yet final decision'is dealt for enforcement with after DAB decision .DAB held in a dispute referred that usdollar 17.0 million is payable to the claimant by the respondent but he refused to pay claimant the awarded sum .This was further litigated in courts and finally only an adho payment was released to be adjusted against the final award on the merits of the claim.The basic issue is that fidic has not clarified(unlike for a binding and final decision under clause 20.7)what process has to follow in circumstances such as this where the employer has issued a NOD and also refuses to pay.(NOD stands for notice of dissatisfaction).To cut the story short,it took 6 yrs. to in  case to the contractor to obtain an interim payment against a DAB decision.
To sum up,the contractor in your case may have to go for an 'interim' award to the arbital tribunal for implementation of DAB award and thus also retained jurisdition to hear the case further on the merits and adjust the interim award  amount, as necessary on finalization of arbitration proceedings .
We can discuss further if there are still some questions unanswered.
Regards and best wishes
liaqat hayat

Construction Law

All Answers


Answers by Expert:


Ask Experts

Volunteer


Liaqat Hayat

Expertise

I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

©2016 About.com. All rights reserved.