How Does the DAAB Work in the Philippines?

How does the DAAB work in the Philippines?

The Dispute Avoidance/Adjudication Board (DAAB) is a mechanism used in construction contracts, particularly under the International Federation of Consulting Engineers (FIDIC) contracts, to resolve disputes and avoid potential conflicts.

The Role of the DAAB

The DAAB serves a dual role:

1. Dispute Avoidance: The DAAB helps parties resolve issues before they turn into formal disputes. The DAAB achieves this through informal assistance and by fostering communication between the contracting parties.
2. Adjudication: The DAAB issues binding decisions on disputes that have already arisen between parties. The DAAB typically comprises one or three members who are appointed at the outset of the project to monitor its progress and intervene when needed【15†source】【16†source】.

Process of Using the DAAB

1. Constitution: The DAAB is constituted at the start of the project, typically comprising one or three suitably qualified members. The 2017 FIDIC Contracts recommend appointing the DAAB within 28 days of the contractor receiving the letter of acceptance.
2. Obtaining a Decision: When a dispute arises, the DAAB issues a reasoned decision within 84 days or within a period agreed upon by both parties.
3. Notice of Dissatisfaction: If a party is dissatisfied with the DAAB’s decision, they may issue a Notice of Dissatisfaction (NOD) within 28 days of receiving the decision.
4. Amicable Settlement: After an NOD is issued, both parties attempt to settle the dispute amicably before proceeding to arbitration.
5. Arbitration: If amicable settlement fails, the dispute is referred to arbitration, typically under the Rules of Arbitration of the International Chamber of Commerce【17†source】【18†source】.

Advantages of the DAAB

1. Dispute Prevention: The DAAB helps prevent disputes by addressing issues early on.
2. Binding Decisions: The DAAB's decisions are binding, although not final, providing a quick resolution to disputes.
3. Efficient Resolution: The DAAB resolves disputes faster and more cost-effectively than arbitration or litigation【15†source】【16†source】.

Best Practices

To ensure a successful DAAB process:

1. Trust Building: DAAB members should maintain trust and impartiality.
2. Early Involvement: The DAAB should engage early and identify potential disputes proactively.
3. Clear Communication: The DAAB should facilitate clear communication and manage expectations【16†source】.

In conclusion, the DAAB offers a practical and efficient method for resolving construction disputes, particularly in complex projects【19†source】.