“Putting Your Money Where Your Mouth Is” or “Practising What You Preach”: The Funding (or not) of Dispute Boards by the International Funding Banks
FIDIC contracts are unique because they are the only international standard form suite of contracts to promote dispute avoidance. The vehicle for this is the Dispute Adjudication Board (DAB) and the first role of the DAB is to help the contracting parties avoid disputes, disputes which are inevitably costly in money, time and reputations.
The international development banks have recognised it is highly worthwhile dealing with issues before they become fully blown disputes and the World Bank has been promoting the use of Dispute Review Boards (DRB)1 in its Standard Bidding Document since 1995. The World Bank has also made provision for the settlement of disputes by a DAB2 in its Procurement Guidelines,3 since 1999 when they were first published and which still exist today.4 The World Bank, together with the European Bank for Reconstruction and
Development, Asian Development Bank and African Development Bank were instrumental in drafting and promoting the FIDIC MDB Harmonised Edition (published in 2005) of its well known Conditions of Contract for Construction 1999,5 known as the “Pink Book”. Most of the other international funding banks have now joined these banks in promoting and encouraging their borrowers to use the FIDIC MDB Contract.