Over the last ten years, in the international context, organisms as the World Bank have promoted and sometimes required the use of dispute resolution boards in projects with amounts higher than US$2,000,000.00.

Definition

The dispute resolution boards or dispute adjudication boards (DRB) are a mechanism where one or more independent experts, appointed by the parties or by an institution, supervise the stages of a construction project, and if necessary, resolve the disputes arising in connection with the said project through a recommendation.

The functions of the DRB are, between others, the following:

1. From the beginning to the end of the project: To follow the project in accordance with the rules agreed by the parties. (Examples: frequently visits to the site, review and study of the construction memorandums, etc.).

2. Once there is an existing dispute: The parties can submit their existing disputes to the DRB, which will resolve the dispute through a recommendation. It has to be a written recommendation, which includes an evaluation of the facts, the contract clauses as the reasons of the panel upon which it is based. If the parties wish, the recommendation shall be binding.

Advantages

The dispute resolution boards offer the parties of a construction project many advantages. Some of them are listed below:

1. The parties themselves can appoint the members of the DRB or they can make a request to an institution for the appointment of the expert in accordance of the requirements of the parties.

2. The members of the DRB are independent of the parties.

3. The panel prevents future disputes between the parties.

4. At the moment of an existing dispute, the panel has first hand information in order to render a recommendation.

5. The parties can finally settle their disputes through litigation in national courts or by an arbitral proceeding. In this case, the recommendation can be used during the proceeding.

Appointment of members of the DRB

At it has been said before, the parties themselves can appoint the experts, or they can request to an institution, as the Arbitration Center of Mexico (CAM), the proposal or appointment of one ore more experts. Any such request shall be processed by CAM only when it is based upon an agreement between the parties for the proposal or appointment of an expert.

CAM has an extensive database of professionals specialized in different areas of expertise, and also has submitted cooperation agreements with different chambers and institutions, what allows our Center to find the right person in accordance with the circumstances of the particular case.

The appointment of the experts can be done at the moment of submitting the contract, or after, by submitting an agreement. It is recommended to appoint the DRB before starting the construction project, in order to avoid a future dispute as the panel may have direct access since the beginning, to the information related to the said project.