France: The ICC’s New Dispute Board Rules

In recent years, the inventory of alternative dispute resolution ("ADR") techniques has been enriched by the use of dispute review (or adjudication) boards. The International Chamber of Commerce ("ICC") in Paris has now issued its new Dispute Board Rules ("DB Rules"), in force as from September 1, 2004. This article first reviews the background and comments upon certain general principles and issues that arise in connection with dispute boards. It then summarizes the salient features of the ICC’s DB Rules and concludes with a few comments about these rules.


Introducing its DB Rules, the ICC describes dispute boards as follows:

"Dispute Boards (DBs) are independent bodies normally set up at the outset of a contract and which remain in place for its duration. Comprising one or three members thoroughly acquainted with the contract, DBs can help parties resolve their disagreements and disputes by providing informal assistance and by issuing recommendations or decisions."

The modern development of dispute boards began in the United States in the 1960s, where they were used successfully on major civil engineering projects (dams, underground construction, etc.). Disputes boards were subsequently used with success in international projects. In 1989, the American Society of Civil Engineers ("ASCE") published a standard dispute review board ("DRB") specification that had been prepared by the Technical Committee on Contracting Practices of the Underground Technology Research Council. The ASCE published a revised DRB specification in 1991. A Construction Dispute Review Board Manual was published in 1996.

In the United Kingdom, beginning in the 1970s, parties in construction projects developed a procedure known as adjudication, in which disputes were submitted to a standing project neutral who would render decisions that were binding upon the parties, but subject to review or appeal in a later proceeding (litigation or arbitration). The success of adjudication led to the enactment of the Housing Grants, Construction and Regeneration Act of 1996, which mandates the use of statutory adjudication in all commercial construction projects in England, Scotland, and Wales (except for exempted projects in certain industries). Practitioners in the U.K. consider that adjudications under the Act have significantly reduced the number of disputes that are referred to litigation or arbitration.

A change of policy by the World Bank 10 years ago increased the use of dispute boards in international projects. The World Bank had long recommended (and eventually required) that contracts for construction projects that it helped to finance be based upon the FIDIC "Red Book" — i.e., the Conditions of Contract (International) for Works of Civil Engineering Construction, 4th edition (or an earlier edition of the Red Book). The Red Book provided that disputes be referred in the first instance to the engineer, who would render a decision that would become final and binding upon the parties unless one of them gave notice of its intention to commence arbitration. However, many parties involved in international construction contracts doubted that the engineer — selected and paid by the employer — could act impartially when deciding disputes, some of which could involve action or inaction by the engineer himself.

In 1995, the World Bank issued new Standard Bidding Documents for the Procurement of Works ("SBD-W"), which provided for disputes to be submitted to a dispute review board, rather than to the engineer. (The World Bank’s SBD-W permitted the reference of disputes to the engineer only for contracts that cost less than US$ 50 million and only if the engineer was independent of the employer.) The dispute review board under the SBD-W would issue recommendations that were not binding upon the parties. If a party did not accept the dispute review board’s recommendation, the parties would have to resort to arbitration for a final and binding resolution of their dispute. In the version of the SBD-W issued in 2000, the dispute review board’s recommendation is binding on the parties, unless subsequently revised in an arbitral award.

FIDIC itself then introduced a dispute adjudication board ("DAB") in its various conditions of contract:

  • In 1995, FIDIC published its new Conditions of Contract for Design/Build and Turnkey (the "Orange Book"), which did not provide for an engineer to review and decide disputes. Instead, disputes were to be referred to a DAB.
  • FIDIC followed with Supplements to the Red Book in 1996, and to the Conditions of Contract for Electrical and Mechanical Works, 3rd edition (the "Yellow Book"), in 1997, both of which offered the option of referring disputes to a DAB instead of to the engineer.

In 1999, FIDIC published its new "rainbow" suite of model contracts, including the Conditions of Contract for Construction (the "New Red Book"), Conditions of Contract for Plant and Design-Build (the "New Yellow Book"), and the Conditions of Contract for EPC/Turnkey Projects (the "Silver Book"). These conditions of contract all provide for the referral of disputes to a DAB.

The DABs under the FIDIC conditions of contract render decisions (rather than recommendations) that are binding upon the parties unless challenged and revised in arbitration.

General Principles and Issues Relating to Dispute Boards

The parties’ primary goal in establishing a dispute review (or adjudication) board is to create a procedure for resolving disputes without resort to formal, time-consuming, and costly proceedings in court or in arbitration. Proceedings before a dispute board should therefore be relatively quick and informal. The dispute board’s recommendation or decision may be accepted by the parties, thereby avoiding court litigation or arbitration. Moreover, the resolution of disputes through dispute board procedures may facilitate cooperation between the parties and prevent their relationship from becoming adversarial. Thus, an effective dispute board can contribute to the successful completion of the project.

Members of the dispute board must be independent of the parties. They should have experience and expertise that enable them to follow the progress of the project and to make reasoned, persuasive recommendations or decisions regarding disputes that are submitted to them. In contrast to arbitration, where the parties generally have the right to appoint an arbitrator without securing the consent of the opposing party, the parties should agree upon all members of the dispute board, although there must always be a back-up procedure to be followed if the parties fail to agree upon an appointment. The fees and expenses of dispute board members are paid in equal shares by the parties.

The status of a dispute board’s determinations may differ: As mentioned above, the World Bank’s SBD-W originally provided for dispute review boards that issue non-binding recommendations. In contrast, the dispute adjudication boards established under the various FIDIC conditions of contract issue binding decisions that can only be revised by agreement of the parties or through arbitration. However, the distinction between non-binding recommendations and binding decisions may not matter so much in practice: The independence of the dispute board members, combined with their experience and expertise, should give their eventual determinations considerable persuasive force. The fact that the dispute board’s determination will generally be admissible in any further proceedings (arbitration or litigation) may encourage a disappointed party to accept the dispute board’s resolution of the dispute, even if it is only a "recommendation."

The question arises whether the dispute board should be standing (i.e., constituted at the beginning of the contract and maintained throughout the performance of the contract) or ad hoc (i.e., constituted if and when a dispute arises). There are certain obvious advantages to a standing dispute board: The parties would normally find it easier to agree upon the members of the board at the beginning of a project than after a dispute has arisen. One of the principal advantages of the dispute board procedure — namely, the members’ familiarity with the project (which, among other things, enables them to render decisions quickly) — depends upon the board being in existence throughout the project, in order to receive reports and other documents, to make periodic site visits, etc. On the other hand, a standing dispute board will naturally be more expensive than an ad hoc dispute board, since the members of a standing board must be paid a retainer and reimbursed for their expenses incurred during site visits, meetings with the parties, and their own deliberations. These additional expenses may seem excessive if the initial phase of the contract involves a relatively long period of design, procurement, and/or manufacturing away from the site.

The ICC's Dispute Board Rules

Structure and Key Elements. The ICC’s DB Rules are a free-standing set of rules that may be adopted by the parties to any contract. The ICC has proposed Standard ICC Dispute Board Clauses for this purpose. These standard clauses include agreements to arbitrate disputes that have been referred to a dispute board, in the event that a party expresses dissatisfaction with the dispute board’s recommendation or decision. The ICC has also published a Model Dispute Board Member Agreement to be concluded by the parties and the individual members of the dispute board.

Rather than choose between a dispute review board ("DRB") and a dispute adjudication board ("DAB"), the ICC has offered both forms of dispute board (Articles 4 & 5, respectively). A DRB issues non-binding recommendations; a DAB issues binding decisions. Indeed, the ICC has taken a further step and offered a third alternative: a combined dispute board ("CDB") (Article 6). The CDB issues recommendations with respect to disputes that are referred to it. The CDB may instead render a decision with respect to a given dispute if the parties agree that it should do so. If the parties disagree on this point, the CDB shall decide whether to render a decision, rather than a recommendation, taking into consideration factors such as those listed in Article 6.3 (e.g., whether, due to the urgency of the situation, a decision would facilitate performance of the contract).

A recommendation is not binding upon the parties, but becomes binding if no party expresses its dissatisfaction with the recommendation within 30 days of receiving it (Article 4.3). In contrast, a decision is binding upon the parties upon receipt (Article 5.2). If a party expresses its dissatisfaction with a recommendation or a decision, the dispute shall be settled by arbitration, if the parties have so agreed (e.g., in an agreement based upon one of the ICC’s standard dispute board clauses), or, if not, by any court of competent jurisdiction (Articles 4.6 and 5.6, respectively).

The DB Rules opt for the more common practice of establishing a standing dispute board. Unless otherwise agreed, the parties shall establish the dispute board at the time of entering into the contract, specifying whether it shall be a DRB, a DAB, or a CDB (Article 3). If the parties have agreed that the dispute board shall have a sole member, that member shall be "jointly" appointed by the parties (Article 7.3). When the dispute board comprises three members, the parties shall "jointly" appoint the first two members (Article 7.4). The two members shall then propose the third member to the parties, who complete the constitution of the dispute board by appointing that person, who will normally act as chairman (Article 7.5). The DB Rules give no particulars regarding the procedure to be followed for these joint appointments.

The ICC, through its newly created ICC Dispute Board Centre (the "Centre"), offers certain administrative services to the parties who agree to establish a dispute board in accordance with its DB Rules:

  • If the parties fail to appoint a dispute board member as foreseen by Articles 7.3, 7.4, or 7.5, the member shall be appointed by the Centre.
  • The Centre shall finally decide any party’s challenge against a dispute board member for lack of independence or otherwise (Article 8.4).
  • If the parties so agree, the Centre will review the decision of a DAB or CDB in draft form before it is signed. The Centre may require modifications only as to the form of the decision (Article 21).

It is only for these services that the parties would owe any payment to the ICC (Article 32). An appendix to the DB Rules provides a schedule of fees to be paid for the services. Therefore, if appointments to the dispute board are made without difficulty, no challenge is filed against a board member, and the parties do not agree to the Centre’s review of the board’s eventual decision(s), the dispute board would operate without the involvement (or even the knowledge) of the Centre, and the parties would owe no fees to the ICC.

The DB Rules include detailed provisions regarding the operation of the dispute board, procedures before the dispute board, determinations of the dispute board, and other matters. For example:

  • Articles 11-13 set out the parties’ obligation to cooperate with the dispute board, including the provision of information and arranging for meetings and site visits.
  • Article 15 defines the powers of the dispute board (a full page in the ICC’s DB Rules pamphlet).
  • The DB Rules set time limits for the response to an initial statement of case (Article 18.1), for the hearing regarding a dispute (Article 19.2), and for the rendering of the board’s determination (Article 20.1).
  • Article 19.8 describes the procedure to be followed in the hearing, in four stages.
  • Article 22 stipulates the required contents of the dispute board’s determination (namely, date, findings, and reasons), as well as other elements that may be included (e.g., summary of the dispute, chronology of relevant events, etc.).

Articles 26-32 (four pages!) govern the compensation of dispute board members and the ICC. These provisions go so far as to stipulate that, unless otherwise agreed, the air travel expenses of dispute board members "shall be reimbursed at unrestricted business class rates" (Article 29.1).

These and other provisions are a striking contrast to the ICC Rules of Arbitration, which do not stipulate in detail the procedures to be followed in an ICC arbitration. Whereas the ICC has chosen to keep its Rules of Arbitration fairly general and flexible (to promote their acceptance by parties of different nationalities and legal cultures), the ICC has found it preferable to regulate the operation of dispute boards in considerable, even surprising, detail.

Concluding Comments

Dispute boards were initially developed for construction projects, and they have been accepted as a useful technique for resolving the potentially complex and disruptive disputes that can arise in such projects. The ICC’s DB Rules may help to expand the use of dispute boards in other types of contracts, where model provisions (comparable to the FIDIC conditions of contract, with their DAB provisions), do not yet exist.

The choice offered to the parties by the ICC to select among three types of dispute boards — DRB, DAB, or CDB — provides flexibility and should broaden the appeal of the DB Rules. Parties are well advised to consider and decide at the outset whether their dispute board should render non-binding recommendations or binding decisions, although in practice, parties who act in good faith are likely to comply with a recommendation just as they would accept a decision. However, there can be too much choice in a smorgasbord: Parties may not often opt for the ICC’s "combined dispute board." Under Article 6.3, if the parties disagree over whether the CDB should issue a decision, the question becomes a preliminary issue for the CDB to decide. Tactical considerations may thus give rise to a new dispute between the parties, in conflict with the general goal of facilitating the quick and informal resolution of disputes. The CDB appears to be an awkward, rather than a useful, compromise.

Considering the level of detail found in the DB Rules (which may be considered excessive in some areas), it is surprising that Article 7 provides simply that the parties shall "jointly" appoint members of the dispute board, without further details of the procedure to be followed for the two initial appointments. Setting out a specific procedure (which could, of course, be altered by agreement of the parties) would have been helpful. For example, FIDIC’s New Red Book provides that each party shall nominate one member of the DAB for approval by the other party.

A dispute board’s ability to give informal but authoritative advice to the parties is one of its distinctive and most valuable qualities. Article 16 is thus an important provision of the DB Rules: It provides that the dispute board may, on its own initiative or upon the request of any party (but in either case with the agreement of all of the parties), "informally assist the Parties in resolving any disagreements that may arise during the performance of the Contract." Under this provision, the dispute board may, inter alia, meet separately with a party and it may give its informal views to the parties. The dispute board, drawing upon its knowledge about the project and its own expertise, can thereby assist the parties in resolving disagreements before they become formal disputes.

Article 23 of the DB Rules illustrates an important aspect of a dispute board’s role in the resolution of disputes that distinguishes dispute boards from arbitral tribunals: The dispute board "shall make every effort to achieve unanimity." This virtually amounts to a duty to find a compromise solution. At the same time, Article 23 expressly provides for dissenting opinions: A member who disagrees with the dispute board’s determination shall give the reasons for his disagreement in a separate opinion that shall not form part of the determination but shall be communicated to the parties. Whether these provisions actually facilitate the parties’ acceptance of the board’s determination will depend upon the circumstances of the individual case. The parties in one project may accept a reasonable compromise proposed by a dispute board that has won their trust, while in another project, a unanimous, compromise solution may leave one party so dissatisfied that it decides to challenge the decision in arbitration. Similarly, a dissenting opinion may encourage the losing party to take the matter to arbitration — or show that party that its prospects in arbitration are not promising.

Standard Clauses. Finally, parties that agree to the DB Rules must consider the proceedings that may follow a dispute board’s determination. The standard dispute board clauses proposed by the ICC provide, in part, as follows:

"All disputes arising out of or in connection with the present Contract shall be submitted, in the first instance, to the [DRB/DAB/CDB, as the case may be] in accordance with the [DB] Rules."

There follow provisions for a dispute to be finally settled under the ICC Rules of Arbitration:

"If any Party sends a written notice to the other Party and the [DRB/DAB] expressing its dissatisfaction with a [Recommendation/Decision], as provided in the Rules, or if the [DRB/DAB] does not issue the [Recommendation/Decision] within the time limit provided in the Rules, or if the [DRB/DAB] is disbanded pursuant to the Rules, the dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules of Arbitration."

These provisions would appear to bar a party from submitting a dispute to arbitration without first submitting it to the dispute board, but the bar is not stated expressly, thus leaving the point open for doubt and dispute. It would therefore be advisable for parties using one of the ICC’s standard dispute board clauses to add a further provision, making it unambiguously clear that the referral of a dispute to the dispute board is a precondition to any submission of the dispute to arbitration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
13 Dec 2017, Seminar, Cleveland, United States

Jones Day partners Harold Gordon and Tony Dias, and Associate Courtney Snyder will explore the significant role New York's Attorney General and its Department of Financial Services (DFS) play in the financial services industry and why these two state-level agencies will continue to exert significant power over the financial services industry, especially with federal oversight potentially shrinking.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions