FIDIC Releases New Guidance for Dispute Board Decisions

FIDIC has released its latest guidance for Dispute Board members in the form of Practice Note III: Dispute Board Decisions – Preparation and Composition (2025). The note provides practical advice for those tasked with drafting decisions under the FIDIC suite of contracts.

FIDIC states that while this Practice Note has been prepared with Dispute Avoidance/Adjudication Board in mind (i.e. that there is a standing Dispute Board on a project), these principles would apply to all type of Dispute Board decisions under other FIDIC forms. 

Overarching themes and principles

The Practice Note contains a comprehensive (if not prescriptive) set of “core tasks” which are “likely to assist DB Members to produce logical and reasoned decisions”. There are 11 such tasks, which cover the full lifecycle of a dispute: techniques for managing the referral process, review of referrals, establishing timetables, response reviews, jurisdictional challenges, managing additional exchanges, assessment of evidence, hearings, deliberation among dispute board members, structuring decision documents, compliance with FIDIC contract provisions and formalities, and post-decision considerations. Addressing these tasks as a whole, several recurring themes can be identified which represent the essence of FIDIC’s approach:

1. Clarity: FIDIC emphasises that decisions should “tell the story” of a dispute in a way that is accessible and persuasive. Plain language, short sentences, and clear headings are stated to be essential to make decisions (and any related correspondence) comprehensible to all readers from project managers to arbitral tribunals.
2. Equality of Treatment: The process must give both parties an opportunity to present their case, and both cases must be fairly reflected in the decision. FIDIC emphasises that perceived bias or procedural unfairness can invite challenge even where none reasonably exists.
3. Accuracy: Every issue referred to a Dispute Board must be addressed, and statements of fact must be correct. Omissions or errors may render a decision unenforceable, and damage trust in the process. Particular attention is recommended when drafting the operative section (containing directions for payment) of a decision.
4. Professionalism: The Practice Note encourages a mindset of calm professionalism under pressure. Specifically, it advises that criticism from the parties, and particularly Notices of Dissatisfaction, should never be taken personally. FIDIC emphasises that maintaining constructive relationships with all parties is vital to achieving a successful outcome.
5. Efficiency: The need for efficiency is repeated throughout the Practice Note as a priority throughout all stages of the dispute lifecycle. A Dispute Board decision is expected to be received quickly and cheaply – but this should not come at the expense of thoroughness. The Practice Note consistently calls for Dispute Boards to manage their time proactively, and carry out their tasks systematically, to ensure that decisions are both prompt and comprehensive.

Role and perspective of Dispute Board decisions

The Practice Note highlights that Dispute Board decisions matter because they are intended to be legally enforceable and can directly affect the parties’ contractual rights and obligations. For this reason, the Practice Note consistently reiterates that the “journey” to a decision must be approached with the same care and professionalism as any formal adjudicative process. In order to achieve this, FIDIC suggests that Dispute Boards’ approach their work with several key perspectives in mind:

1. Scope and Jurisdiction: The Dispute Board should identify, at the outset, the precise question(s) referred to it and address any jurisdictional objections directly. Any jurisdictional challenge should, where practicable, be determined early and supported by written reasons. Where the response raises a counterclaim or additional issue, the Dispute Board should promptly decide whether it falls within the scope of the referral and the extent of the Board’s jurisdiction.
2. Legal Nature: The decision is binding, and in some cases may be final and binding. It affects parties’ contractual rights, and the decision must therefore demonstrate a high standard of legal reasoning. Decisions may later be scrutinised in arbitral or judicial proceedings, and Boards should draft decisions with this potential in mind.
3. Professional standards: Decisions must be clear, logical, and comprehensive. They should address all the issues identified by the parties, both to demonstrate professionalism and to avoid challenges based on omissions. The reasoning should be transparent, demonstrating that each argument has been considered (FIDIC notes that this last step is particularly relevant to the arguments of the “losing” party).
4. Formal and Contractual compliance: The Dispute Board should comply with the 84-day timeline (from referral to decision) and other contractual requirements. Failure to do so would mean that decision is not valid and enforceable.
5. Purpose beyond the dispute: Dispute Boards should remember that a decision may be used in future proceedings, in both contentious and non-contentious contexts. For example, a decision may be relevant as a record for future stakeholders, funders, regulators, and insurers.
6. Human aspect: The Practice Note reminds Board members that projects are run by people, and decisions will be read by people. Thus, FIDIC emphasizes that a focus on courtesy, clarity, and respect in drafting is essential to achieving a successful outcome. Overly complex language is to be avoided, as is a dismissive or aggressive tone.

Final thoughts

FIDIC’s Practice Note III delivers a structured guide for Dispute Board members, reaffirming the role these bodies play in navigating the complexity of international construction disputes. The idea is that this Practice Note functions as a practical checklist for Dispute Board members, helping to ensure that decisions are well‑reasoned, coherent, and address all the arguments and issues put forward by the parties. It also focuses on drafting decisions in a way that reduces the risk of challenge.