Step-by-Step Guide under CRCICA Dispute Board Rules

First, the parties need to agree to a Dispute Board (DB) as their preferred mechanism to operate as dispute resolution mechanism for their contract.

Parties also need to agree, prior to signing (or amending their contract), on whether to establish a Dispute Review Board (DRB) (Article 3 of the Rules), or a Dispute Adjudication Board (“DAB”) (Article 4 of the Rules) (their preferred type of DB), and how many members they wish to compose the DB (their preferred number of DB members), usually one or 3 (Article 5(2) of the Rules), unless otherwise agreed.

They can then proceed to insert, directly at the contract, either:

The insertion of the model clause at their contract makes the DB mechanism automatically applicable to their contract and disputes that may arise thereof. The DB Rules of CRCICA are deemed incorporated (Article 2(1) of the Rules), to be read in conjunction with paragraph 1 of the model clause at [Annex (A), paragraph (a) or (b) of the Rules].

Following agreement on the DB mechanism, type and number of DB members, by means of insertion of the model clause, the parties shall proceed to appoint and select the DB members (with the help or advice of the Centre, if needed) in accordance with the provisions of the contract, or where the Contract is silent, in accordance with the Rules.

Selection and appointment of a one-member DB

If the parties have agreed on a sole member:

  • The parties shall jointly appoint their chosen sole member, within 28 after the effective date of the contract, or the time-period they agreed (Article 5(3) of the Rules).
  • To choose or select their preferred DB member, parties can take guidance in the criteria used by the Centre when appointing or selecting a DB member (Article 7(2) of the Rules).
  • If the parties fail to agree, then a party should submit a request in writing to the Centre, to appoint the sole member. Said request may include the desired qualifications of the DB member, and provide for any conflict of interest of an adjudicator on the Centre’s list (Article 5(7) of the Rules).
Selection and appointment of a three-member DB

If the parties have agreed on 3 members of the DB:

  • Each party shall appoint one member (Article 5(4) of the Rules).
  • To choose or select their preferred DB member, parties can take guidance in the criteria used by the Centre when appointing or selecting a DB member (Article 7(2) of the Rules).
  • The appointed DB members shall then jointly appoint the DB member that is to act as chairperson, upon the parties’ approval (Article 5(4) of the Rules).
  • If the DB members appointed by the parties fail to appoint or agree on a chairperson, then the parties, or one of them should submit a request in writing to the Centre, to appoint the chairperson of the DB (Article 5(4) of the Rules). Said request may include the desired qualifications of the chairperson of the DB, and provide for any conflict of interest of an adjudicator on the Centre’s list (Article 5(7) of the Rules).

The selected or appointed member or members will then deliver their acceptance by means of a letter of acceptance and declaration of impartiality and independence (Article 6(2) of the Rules).

Selection or appointment by the Centre (request for appointment)

Failing agreement by the parties on a sole DB member, or by the DB members on a chairperson following a request for appointment (Article 5(7) of the Rules), the Centre will proceed to appoint, in accordance with the following procedure:

  • The Centre will communicate to each party an identical list of at least 3 proposed members from its list of adjudicators (Article 5(8)[a] of the Rules). The parties will have 15 days to return the list, having deleted the members to which they object and listed the remaining by order of preference (Article 5(8) [b] of the Rules).
  • At the expiration of these 15 days, the Centre will proceed to appoint the DB member, in accordance with the parties’ expressed preferences (Article 5(8)[c] of the Rules) or, where not possible, will use its discretion in order to select a sole DB member or chairperson matching their contract and associated project (Article 5(8)[d] of the Rules).
  • Such decisions by the Centre are final (Article 5(7)-(8)[d] of the Rules). The Centre, in any case and when appointing, takes into account the expertise, skills and qualifications of the prospective DB member or chairperson in relation to the parties and their contract (Article 7(2) of the Rules).

In a DB of 3 or more members, failing a party to appoint a member in accordance with the provisions of the contract, or where the contract is silent, in accordance with the Rules, the Centre will proceed to appoint the DB Member as soon as practicable after the written request of the other Party (Article 5(7) of the Rules). The Centre’s appointment shall be final and conclusive.

Upon selection and appointment of the DB member(s), the parties and the member(s) can then proceed to sign the Dispute Board Member Agreement (DBMA) (Annex B of the Rules).

  • Shall be signed prior to commencing any activities of the DB in relation to the contract (Article 8(1) of the Rules);
  • Shall indicate whether the contracting DB member is a sole member, or a chairperson or member of a DB of 3 or more members (Article 8(3) of the Rules);
  • Shall be signed separately for each member of the DB, when 3 or more, between the Parties and said member of the DB (Article 8(1) of the Rules); and
  • Shall state the terms and rate of compensation of the DB member (Article 20(2) of the Rules), as may be agreed by the parties. The remuneration should take into account considerations, such as the extent, nature and frequency of the obligations of the DB, which are considered in detail at (Article 21 of the Rules).
  • Binds the DB member and parties (Article 7(1) & Article 8(2) of the Rules); and
  • Supplements the Rules in accordance with any modification agreed by the parties (Article 2(1) of the Rules) in relation or in addition to the DB’s duties, obligations and functioning as adopted at the Rules.

Parties may wish, when adopting the model DBMA [Annex (B) of the Rules] to consider adding precisions, with regard to:

  • the sharing and provision of documents and information between the parties and DB (Article 9(1-3) of the Rules), for instance in nature or frequency.
  • meetings, and site visits (if applicable) depending on the nature of the contract (Article 10(1-4) of the Rules), for instance by stating a minimum frequency, or by elaborating on a schedule, or establishing their location or subject.
  • obligations of the DB, for instance, with regard to the elaboration of reports following meetings and site visits (if applicable) (Article 10(6) of the Rules).

Once the DBMA is signed, the DB may start to execute its obligations with regard to the contract.

Regular interactions of the DB and Parties

The DB will:

  • Keep up to date with the contract, and maintain itself informed at all times of its status and advancement, and that of the project (if applicable) (Article 9 of the Rules);
  • By means of regular site visits (if applicable), or meetings with the parties (Article 10 of the Rules);
  • Exercise its powers and use its specialist knowledge for the purpose of assisting the parties in avoiding disputes and preserving the performance of the contract and good relationship between the parties (Article 17(1) of the Rules) by means of holding meetings, hearings, site visits, requesting documents and information, etc; and
  • Elaborate regular reports based on its visits (where applicable) or its meetings with the parties and the information they provide.

Meanwhile, the parties have, vis-à-vis the DB, an obligation of cooperation (Article 9(1) of the Rules) and information (Article 9(2) of the Rules) in view of preserving the DB’s capacity to prevent conflicts with regard to the performance, execution, status and advancement of the contract and project.

Informal dispute avoidance

Upon emergence or arising of a small dispute or disagreement between the parties:

  • The parties may refer to the DB by jointly requesting informal assistance in the form of an informal advisory opinion (Article 13(1), Article 3(1) (DRB) & Article 4(1) of the Rules). It can be given by the DB during a conversation with the parties, any meeting, or site visit (If applicable), or such form asked or agreed by the parties (Article 13(1) of the Rules). Parties are not bound by this informal advice (Article 13(1) of the Rules).
  • The DB may, on its own initiative, bring this matter to the attention of the parties jointly. Parties can then either discuss and agree to the DB’s initiative or jointly notify it in writing that the DB’s initiative is unnecessary (Article 13(2) of the Rules).

If a conflict should arise between the parties that require a process of formal resolution, parties need to abide by (Article 14 of the Rules) or the process agreed at the contract.

Referral and exchange of written submissions

Under (Article 14 of the Rules), which states the terms for formal referral of a dispute:

  • A party may, at any time, refer the dispute to the DB by a referral to the DB and other party simultaneously (Article 14(2) of the Rules). The referral shall summarise, and clarify in a clear and concise manner, all issues submitted to the DB for issuance of a conclusion (Article 14(3) of the Rules): a decision (DAB) (Article 4(2) of the Rules) or recommendation (DRB) (Article 3(2) of the Rules) in relation to the arisen dispute. This referral shall include relevant facts, contractual provisions and relief sought, along relevant documents (Article 14(3) of the Rules).
  • The other party shall submit its response within 21 days of its receipt, along any relevant document, and additional relief sought (Article 14(4) of the Rules).
  • Subject to the DB’s permission, a reply may be submitted after 7 days (Article 14(5) of the Rules).
Conduct of hearings

If necessary, agreed or required by the parties:

  • A hearing may be held, after consultation with the parties on whether it is necessary for the dispute, within 21 days of the receipt of response or the reply, if any (Article 15(1) of the Rules).
  • In such case: the DB is responsible for the conduct of the hearing (Article 15(4) of the Rules); the parties may be represented or assisted (Article 15(5) of the Rules); representatives of the parties with knowledge of the contract shall appear in person (Article 15(5) of the Rules); DB may deliberate at any location, including its holding by virtual or electronic means (Article 15(6) of the Rules); and
  • The hearing shall be held even if a party who has been duly notified does not appear (Article 15(2) of the Rules). A DB member (with the exception of sole member of the DB, which renders this paragraph inapplicable), may be excused and the hearing held in his or her absence, subject to the parties’ consultation and their written approval (Article 15(3) of the Rules).
Amicable settlement between the parties

The parties can, at any given moment of this procedure, always settle their differences amicably (Article 14(7) of the Rules), with or without the DB’s assistance.

Issuance of the conclusion

The DB shall issue its conclusion (i.e. recommendation or decision, as the case may be), 84 days from the referral.  Subject to the parties’ agreement, the DB may, depending on the complexity and nature of the dispute, extend such duration by, normally, no more than 21 days (Article 16(2) of the Rules):

  • Such conclusion must state the date, findings and reasons for the DB’s decision or recommendation (Article 16(3) of the Rules).
  • Any party may express their dissatisfaction with the recommendation, subject to (Article 3(3) of the Rules), or their rejection of a decision, subject to (Article 4(3) of the Rules), within 28 days of receipt of the same.

Failing such notice, the DRB’s recommendation becomes contractually binding on the parties and final (Article 3(5) of the Rules). The DAB’s decision is immediately contractually binding on the parties, and remains so, even when rejection is expressed by a party, pending resolution through arbitration or court, but becomes final failing such notice (Article 4(2)&(4) of the Rules). Parties are bound contractually by the conclusion, and must abide by it (Article 3(6) (DRB) of the Rules  & Article 4(6) (DAB) of the Rules).

Such referral is always subject to a notice of dissatisfaction or rejection, within 28 days of the conclusion (i.e. recommendation and decision) failing which, the conclusion will become final (Article 3(5) (DRB) of the Rules & Article 4(5) (DAB) of the Rules).

If, however, a given party should consider the resolution unsatisfying, subject to such notice as described above:

  • The dispute may be referred to arbitration (applicable as per the model clause) (or litigation as the case may be, if the parties diverted) (Article 3(4) of the Rules and Article 4(5) (DAB)of the Rules).

In that case, please refer to Step-by-Step Guide under CRCICA Arbitration Rules.

Termination by the parties

The DB’s mandate can be terminated at any time, by the parties in joint-agreement (Article 8(4) of the Rules), without cause and with one-month notice.

It shall otherwise be terminated upon notice to disband the DB, by joint-decision of the parties, following completion of the contract and project (or DB’s activities) (Article 12(2) of the Rules).

Termination by a DB member

A DB member may also resign, with no less than a two-month notice to the parties (Article 8(5) of the Rules).

Removal of DB member (request for removal)

Given the DB’s obligation of impartiality and independence (Article 6 of the Rules), a party may unilaterally request removal of a DB member in accordance with the following process:

  • Any party may, within 21 days of learning the facts upon which the application is based, file an application to the Centre for removal (Article 5(10) of the Rules). Failing such application within this deadline, the party shall be deemed to have waived its right to object to the member’s impartiality and independence on basis of those facts (Article 5(10) of the Rules).
  • When such application is submitted, a tripartite ad hoc committee shall be composed by the Centre from amongst members of its Advisory Committee, to decide on the application (Article 5(10) of the Rules).
  • Any DB members and parties shall be given the opportunity to comment on the application, following which the decision by the tripartite committee shall be issued, and final (Article 5(10) of the Rules).