International Construction Law Review
SUBCLAUSE 20.5 OF THE FIDIC CONTRACTS AND AMICABLE DISPUTE RESOLUTION (“ADR”)1
DALE S BRACKIN
Partner, Clayton Utz, Brisbane
1. Introduction
Subclause 20.5 of the FIDIC Conditions of Contract2
provides for a 56-day period for the amicable settlement of disputes (after either party has given a notice of dissatisfaction with a decision of a Dispute Adjudication Board) before the commencement of arbitration.
This paper considers:
- (i) why the FIDIC Conditions of Contract includes such a requirement;
- (ii) what the parties can do within the 56-day period; and
- (iii) what options are available to the parties to settle disputes that are not settled by a Dispute Adjudication Board.
2. Antecedent provisions
A provision for amicable settlement of disputes first appeared in the FIDIC Conditions in 1987, in the fourth edition of the old “Red Book”. At that time, the 56-day period for amicable settlement provided for in subclause 67.2 ran from when a notice of intention to commence arbitration wasgiven in accordance with subclause 67.1.
After some editorial amendments were made to the clause in 1992, a supplement was issued in 1996 to provide for the introduction of a Dispute Adjudication Board, and for the period for amicable settlement to follow a notice of dissatisfaction with a decision of the Board. This arrangement was ultimately incorporated into the 1999 FIDIC Conditions.
3. The provision
Subclause 20.5 currently provides:
“Where notice of dissatisfaction has been given under Sub-Clause 20.4 above, both Parties shall attempt to settle the dispute amicably before the commencement of
1 This is a revised version of a paper that was originally delivered at a conference on International Construction Contracts and the Resolution of Disputes organised by the International Chamber of Commerce and FIDIC which took place in Hong Kong on 3–4 July 2006.
2 The clause is identical in the contracts for Construction, Plant and Design-Build and EPC/Turnkey.
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Subclause 20.5 of the FIDIC Contracts and ADR
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