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Construction Law/Clause 20.4 - FIDIC Harmonized Edition

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Question
Dear Peter.

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,

The Contractor and the Employer (the Engineer) promptly give effect to the decision.  If the DAB has decided that the Employer should pay the Contractor, then he should do it promptly, e.g. in the next IPC.  

This is one of the holes in FIDIC 99.  There has been some discussion on potential solutions. but it seems pointless to me to start another DAB if one party or the other is ignoring the first, as the reaction will be the same and you do not accelerate the solution.  It is necessary to understand the position of the other party.  Many government employees are afraid to accept a DAB decision until the decision has been confirmed by a judicial decision.  

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Peter M. Elliott

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First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Organizations
Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

Education/Credentials
B Sc(Hons) in Civil Engineering

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