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InternationalconstructionprojectsfrequentlyuseanindustryformknownastheFIDICConditionsofContract.Althoughthe
contractsvary,thedifferencesarenotsignificantforthepurposesofthisarticle.
TheFIDICConditionsofContractforConstruction(wherethedesignisundertakenbyoronbehalfoftheEmployer)areknown
asthe"RedBook".Inthiscontract,thestandardformprovidesfortheappointmentattheoutsetoftheprojectofaDispute
AdjudicationBoard("DAB").AlthoughtheDAB'sprimefunctionistoassistthepartiesinavoidingdisputes,insomeprojects
thisisnotpossibleanddisputesarereferredtotheDABeitherduringthecourseofthecarryingoutoftheprojectworksor
subsequently.
Clause20.4oftheRedBookprovidesthattheDAB'sdecision:
"Shallbebindingonbothparties,whoshallpromptlygiveeffecttoitunlessanduntilitshallberevisedinanamicable
settlementoranarbitralaward..".
Clause20.4alsogoesontoprovidethatapartywhoisdissatisfiedwiththeDAB'sdecisionmay,within28daysafterreceiving
thedecision,givenoticetotheotherpartyofitsdissatisfaction.ThisiscriticalbecauseifnoNoticeofDissatisfaction("NOD")is
given,thecontractprovidesthatthedecisionbecomesfinalandbindingontheparties.
Insummary,therefore,apartywhoisdissatisfiedwiththeDAB'sdecisioniswelladvisedtogiveanoticewithinthe28day
periodasotherwiseithasnofurtherrecoursetochallengetheunderlyingmeritsofthedecision.
Thesuccessfulpartyusuallyhasarelativelysimpletaskinenforcingadecisionthathasbecomefinalandbindinganditis
unnecessarytogointothisprocedurehere.TheproblemhastraditionallyarisenwhereaNODhasbeengivenandyetthe
losingpartyhasfailedtopaytheamountorderedbytheDAB'sdecision.
ItcanbeseenimmediatelythatthedisputeresolutionsystemsetoutintheFIDICSuiteofContractsisunlikelytosucceed
unlessthereisamechanismfortheenforcementofdecisionswhichareonlytemporarilybindingandnotfinalandbinding.The
EnglishCourtshave,eversincetheadventofadjudication,beenrigorousintheirsupportoftheadjudicationprocessandhave
steadfastlyrefusedchallengesagainstenforcementunlesstherehasbeenaseriousbreakdownintheprocedureorthe
adjudicatorhasexceededhisjurisdiction.
TheEnglishCourtshavealsoinOctober2014lentsupporttotheuseofDisputeBoards.InthecaseofPeterboroughCity
CouncilEnterpriseManagedServicesLimitedtheTCCJudgeupheldaclauseinaFIDICcontractmandatingthe
resolutionofdisputesbyaDABdespiteonepartywishingtoproceedstraighttolitigation.TheauthorwastheDABappointed
bythenominatingbodyandproceededtodeterminethedispute.
Unfortunately,thesamepracticalandcommercialapproachasfoundintheEnglishCourtsregardingadjudicationandDABs
generallyhasnotgenerallybeenseenworldwideasregardstheenforcementofDABdecisions.
Althoughtherehaveovertheyearsbeenanumberofincidenceswherepartieshavesoughttoenforcetemporarilybinding
DABdecisionsreachedunderFIDICcontracts,thesehavegenerallybeeninarbitrationandthereforeunreported.Therehave
beenarticlesintheConstructionlegaljournalsregardingsuchcasesbutofcoursethefactsareveryrarelysetoutinfullanda
bodyofcaselaw,similartothatwhichexistsinEnglandregardingtheenforcementofadjudicator'sdecisions,hasnotbeen
builtup.TheonlycaseonenforcementofDABdecisionswhichhasreachedtheCourtsisthecaseinSingaporeofPT
PerusahaanGasNegara(Persero)TBKCRWJointOperation("ThePerseroCase").
Althoughthefactsofthecasearesimple,theproceduralhistoryisextraordinarilycomplexandcannotbesetoutinfullhere.
SufficeittosaythattheContractor("CRW")obtainedadecisionfromtheDABorderingtheEmployer("PGN")topayitsum
US$17,000,000.PGNissuedaNoticeofDissatisfactionverypromptlyandsothedecisionremainedonlytemporarilybinding.
PGNrefusedtopayandin2009CRWappliedtoanArbitralTribunalforenforcement.
ThefirstArbitralTribunalissuedafinalawardandthiswassetasidebothintheHighCourtofSingaporeandtheCourtof
AppealonthebasisthattheTribunalshouldnothavegrantedafinalawardasthatthenprecludedanydiscussiononthe
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2015/7/20 EnforcementOfInterimBindingDisputeBoardDecisionsRealEstateandConstructionUK
underlyingmeritsoftheDABdecision.TheCourtssaidthattheTribunalshouldhaveissuedonlyaninterimorapartial
award,whichwouldhavekeptalivethedebateonthemeritsofthefactsandmattersunderlyingtheDABdecisionwhichPGN
wasentitledtohaveifitsowished.
In2011,CRWcommencedfresharbitralproceedingsandadifferentlyconstitutedTribunalissuedaninterimaward("the2011
Award")orderingpaymentofthesumscontainedintheDABdecision.CRWthenappliedtotheHighCourttoenforcethe2011
AwardagainstPGN,andinturnPGNsoughttosetasidethe2011Award.
TheHighCourtenforcedthe2011AwardandPGNthenappliedtotheSingaporeCourtofAppeal.ThejudgmentoftheCourt
ofAppealwasdeliveredon27May2015,butonlybyamajorityof2:1.Fortunately,amongstthemajoritywastheChief
Justice,SundareshMenonCJ.Itis,however,ameasureofthestrengthofthedissentingjudgmentthatwhereasthemajority
judgmentrunsto64pagesthedissentingjudgmentextendstonolessthan96pages.ThemajorityjudgmentupheldtheHigh
Court'sdecisionandenforcedthe2011Award.
TheCourtofAppealemphasisedthattheDABdecisionremainedbindingnotwithstandingtheissueofanNODandthepaying
partymustcomplywiththedecisionpromptly.ThechallengebyPGNtothe2011AwardwasrejectedonthebasisthatPGN's
righttohavetheunderlyingmeritsofthecasedeterminedeitherinthesameoraseparatearbitrationwasnotprejudicedor
affectedatallbythe2011AwardwhichsimplydealtwiththepaymentofthesumsintheDABdecision.
TherewasalsosomediscussionastowhetheritwasnecessaryforthesuccessfulpartyunderaDABdecisiontoreferany
failuretopaybacktotheDABbeforecommencingarbitrationproceedings.This,perhapsonthefaceofitslightlystrange,
resulthadbeenreachedinsomeoftheearlierarbitrationsbroughttoenforceaDABdecision.TheCourtofAppealmadeit
clearthatthiswasnotnecessaryandthatasuccessfulpartycouldreferthepayingparty'sfailuretohonourtheDABdecision
toanArbitralTribunalandseekaninterimorpartialawardenforcingthatdecision.
Theverylengthydissentingjudgmentwastotheeffectthatthe2011Awardwasaprovisionalawardwhichwasoutsidethe
ambitofanawardcapableofenforcementundertherelevantSingaporelegislation.Perhapsfortunatelyforthefutureof
speedydeterminationofissuesarisingfromDABdecisions,thisviewdidnotfindfavourwiththemajority.
Itisnow6yearssinceCRWobtainedtheDABdecisionbutitappearsthatPGNmayhavenowexhausteditsattemptstoavoid
payment.
AssomeonewhofrequentlysitsasaDAB,theauthorwelcomesthepragmaticapproachadoptedbythemajorityofthe
SingaporeCourtofAppealandhopesthattheirreasoningwillbeadoptedinotherjurisdictions.
Thismay,intheevent,onlybeatemporaryproblem.NotonlyhasFIDICproposedtheadoptioninitscontractsofaspecificset
ofwordingmakingitclearthatthefailuretopayatemporarilybindingDABdecisioncanitselfbereferreddirecttoarbitration,
butalsothenewFIDICSuiteofContractsisexpectedtoincludewordingincludedinoneofthemostrecentcontractswhich
putsthematterbeyonddoubt.
Thecontentofthisarticleisintendedtoprovideageneralguidetothesubjectmatter.Specialistadviceshouldbesoughtabout
yourspecificcircumstances.
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