International Construction Law Review
UNTANGLING THE ENFORCEMENT OF DAB DECISIONS
GERLANDO BUTERA
Partner, Nabarro LLP, Singapore
“There appears to be a settled practice, in arbitration proceedings brought under sub-clause 20.6 of the 1999 FIDIC Conditions of Contract, for the arbitral tribunal to treat a binding but non-final DAB decision as immediately enforceable by way of either an interim or partial award pending the final resolution of the parties’ dispute.”
So wrote VK Rajah JA delivering the judgment of the Singapore Court of Appeal in the well-known Persero case,1 apparently approving of the “settled practice” to which he refers. However, the dictum of that judge was not necessary to the court’s decision and, in the author’s respectful submission, it is highly problematic. This paper seeks to untangle this topic from confusions and misconceptions that still surround it from an arbitration law perspective.
For ease of reference, a Dispute Adjudication Board (“DAB”) decision in respect of which notice of dissatisfaction has been given within 28 days is referred to in this paper as a “binding but non-final DAB decision”, or “BNFD” for short.
A. The Persero Decisions
In brief, the Persero case concerned a DAB decision in respect of which notice of dissatisfaction was given by the unsuccessful respondent (“PGN”). The successful claimant (“CRW”) commenced arbitration proceedings in which the relief sought was solely to enforce the DAB’s decision, and the arbitral tribunal by a majority made a “Final Award” accordingly. However, on PGN’s application to set aside the award, the Singapore High Court and Court of Appeal both (rightly, in the author’s view) held that the arbitral tribunal could not in the circumstances enforce the DAB’s decision by a final award without a hearing on the merits of the underlying dispute.
Key to the decisions of both courts were the following provisions of the 1999 FIDIC Red Book conditions (the “Red Book”) that formed the basis of the contract between the parties:
“20.4. Obtaining Dispute Adjudication Board’s Decision
If a dispute (of any kind whatsoever) arises between the Parties in connection with, or arising out of, the contract or the execution of the Works … either Party may refer the dispute in writing to the DAB for its decision …
…
Pt 1] Untangling the Enforcement of DAB Decisions
37