Special Features and Experiences of The Full-

Term Dispute Adjudication Board As An Alternative

Dispute Resolution Method In The Construction
Industry Of Sri Lanka

Mahesh Abeynayake
Department of Building Economics, University of Moratuwa, Sri Lanka
(email: abey92@hotmail.com)
Chitra Weddikkara,
President of Sri Lanka Institute of Architects
(email: chitra.weddikkara@gmail.com)

Abstract

Disputes in the construction industry are inevitable due to complexity and the multi-party
involvement of the projects. With the increasing of the construction projects, the construction
industry of Sri Lanka needs a fast and cost effective dispute resolution method. Drawbacks of
litigation have opened up the ‘Alternative Dispute Resolution’ (ADR) methods to settle
construction disputes.

Dispute Avoidance Procedures which include Dispute Review Board (DRB) and Dispute
Adjudication Board (DAB) are widely used in the dispute resolution of the construction
industry since those procedures are encourage to resolve construction disputes at site level.
After 30 years civil war in the north and east provinces in Sri Lanka, the foreign donor
agencies have funded for the economic infrastructure development projects. DAB is used in
Sri Lanka under the FIDIC 1999 (Red Book) specially for the foreign funded development
projects.

This research was carried out to provide suggestions to overcome barriers to implement the full
term DAB practice in Sri Lanka because Sri Lankan construction industry mostly used Ad-hoc
adjudication practice. Literature review was done together with the preliminary survey. The
questionnaire survey and Semi structured interviews carried out among contractor and
consultant organizations. The research findings revealed that a few of stakeholders knew the
actual procedure of adjudication .The results of this study enable researchers to gain a deep
understanding on the current DAB practice ,recognize significance of advantages and
suggestions for the development of DAB in the construction industry of Sri Lanka.

Keywords: Dispute resolution, ADR methods, Dispute Adjudication Board, FIDIC

 1. INTRODUCTION

Disputes in the construction industry in Sri Lanka are normally arise under different contracts.
Construction activities are often fraught with disputes. Disputes may cause owners to lose their
investment revenue because of the associated delays etc. Satisfactory dispute resolution reduces
antagonism and uncertainty, thereby improving working relationships, hence contributing
positively towards project success. In the early days, most disputes were settled on the job site
at an informal meeting between the client and contractor with residential engineer on
handshake. Lengthy process and the high cost involved for litigation have called for alternative
dispute resolution (ADR) methods. Over the last few decades the perceived shortcomings of
litigation, with its costs, delays, and adversarial relationship have led to the growing preference
for ADR methods.

Examination of the literature, some of the mechanisms could be better defined as dispute
avoidance procedure (DAP) instead of alternative dispute resolution. DAP may appear in the
form of several distinct approaches, namely, Dispute Review Board (DRB), Dispute
Adjudication Board (DAB) and Dispute Resolution Adviser (DRA). A Dispute Board (DB)
comprises a board of one or three persons, independent of the contracting parties, engaged to
perform an overview role of the execution of the project and the contract. Its primary function is
to assist the parties to avoid disputes if possible or if not, to assist them to a speedy, cost
effective and acceptable resolution of disputes, and avoid litigation. The FIDIC suite of
contracts provides for two distinct types of DAB. The first type is the "full-term DAB", which
comprises one or three members who are appointed before the contractor starts executing the
works, and who typically visit the site on a regular basis thereafter. The second type is an “ad-
hoc DAB”. The mechanism of Dispute Boards achieved such prominence and success in a
relatively short time because of the significant advantages they offer in comparison to more
traditional forms of dispute resolution. Although the reported success rates of DBs are
encouraging, the process is not a panacea, and the benefits that can be derived from DBs are
highly contingent on careful implementation.

The literature findings revealed that a few of stakeholders knew the actual procedures in
adjudication and the vast difference between adjudication, arbitration and litigation. Ad-hoc
DAB is the most common way in DAB practicing process in Sri Lanka. In Sri Lanka Full-term
DAB is hardly practicing. Therefore the aim of this research was to provide suggestions to
overcome barriers to implement full term DAB in Sri Lanka. Specific objectives have been set
to identify the advantages, critical success factors of DAB and identify the barriers to
implement the Full-term DAB in Sri Lanka and suggestions to improve the full-term DAB
practice in Sri Lanka.

2. LITIGATION AS A DISPUTE RESOLUTION METHOD

Litigation is a civil dispute resolution procedure which takes place in the District Courts. Many
experts believe that litigation is especially inappropriate for resolving conflicts in construction.
Most judges are not familiar with the technological aspects, the cost of conventional litigation,
involves delay in most cases, damaging to future business relations and frustrating to the parties
are the reasons for critizing the litigation process. There are several disadvantages in litigation
like stressfulness, inflexibility and formality of court processes, restricted scope of claims and
remedies as well. Construction industry stakeholders are faced the aforesaid difficulties and
started to find ADR methods. Chau (1992) stated that, disadvantages of arbitration have
prompted the development of ADR methods.

Conflicts, Claims and disputes are interrelated among each other. To clarify this matter, Love
(2007) develops a useful graphic to help define the relationship between conflict, claims, and
disputes.

Non conflict
Conflict
issues

Claims

Settlement

Dispute
Settlement

Litigation
Alternative
Dispute 1. Non-binding
Resolution 2. Binding
Binding

Figure 1: Conflicts, Claims and Disputes

Figure I above shows how conflict can lead to both disputes and claims. In addition, it
shows that claims can in turn lead to disputes when settlement can be reached by ADR
methods.

3. ALTERNATIVE DISPUTE RESOLUTION METHODS

Whether because of high cost of lengthy judicial proceedings, an increasing number of

professionals and organisations are turning away from the judicial system and utilising ADR
methods. The term "alternative dispute resolution" or "ADR" is often used to describe a wide
variety of dispute resolution methods that are short of, or alternative to, full-scale court
processes. (Centre for Democracy and Governance,1998). In ADR unlike in traditional method
of litigation, there are no losers and there is a real prospect of both sides winning. There are two
groups of ADR methods, formal, binding methods and informal, non-binding methods. Binding
ADR is predominantly arbitration, the most widely used ADR methods in construction. Non-
binding ADR methodologies include mediation, third-party neutrals, and mini-trials. Many
organizations who produce standard form of construction contracts or provide major financing
for construction projects mandate some form of dispute resolution process prior to judicial
intervention, including mediation,/conciliation, Dispute Review Board (DRB), Dispute
Adjudication Board (DAB) and institutional arbitration.The most important prerequisite for
successful ADR is the desire for the parties to explore the possibility for settlement. When
considering the suitability of ADR methods, it is suitable for technical disputes where a third
party can choose with a technical ability. Therefore when considering the construction industry,
the design and implementation of available ADR methods are suitable for complex projects and
it can be a factor in the success of a project.

4. ARBITRATION IN SRI LANKA

Arbitration is an one approach of ADR method that can dramatically reduce the time and money
spent to reach a settlement. It is seen as the final mode of alternative dispute resolution
which is beyond the usual attractions of arbitration, such as privacy, speed, flexibility and
choice of the arbitrator. Under arbitration, a neutral third party renders a decision after hearing
proofs and arguments from each party. While both the agreement to arbitrate and the
presentation of these arguments are voluntary, the arbitrator’s decision is binding, in the sense
that courts will enforce it against a reluctant party.

Today Arbitration is an alternative to traditional litigation in Sri Lanka. In Sri Lanka the
arbitration must necessarily follow the provisions of the Arbitration act,No.11 of 1995. Unless
the arbitration agreement specifies the procedures, the parties have a choice of selecting the
procedures among following two,

 Institutional procedures
 Ad-hoc procedures

In institutional arbitration the procedural rules are already established by the institution.
Formulating rules is therefore no cause for concern. The fees are also fixed and regulated under
rules of the institution. Ad-hoc arbitration is when the parities decide on their own procedures to
be adopted in the conduct of the arbitration proceedings. Most domestic construction contracts
are conducted on ad-hoc procedures. An award given where it has deviated from the provision
of the act cannot be enforced by the court and therefore may not be legally binding on the
parties.

The Arbitration Act of Sri Lanka No. 11 of 1995 provides for a legislative framework for the
effective conduct of arbitration proceedings as well as the request mechanism for the
enforcement of arbitral awards thereby making arbitration a viable and expeditious alternative to
litigation for the resolution of commercial disputes. The Arbitration Act No. 11 of 1995 consists
of 50 sections divided into 9 parts. This Arbitration Act in itself does not lay down any rules of
arbitration. But deals with the composition of the arbitral tribunal, the jurisdiction of the arbitral
tribunal, the conduct of arbitral proceedings, awards, enforcement of awards, recognition and
enforcement of foreign arbitral awards, and grounds for refusing or enforcement of awards. This
Sri Lankan Act to a great extent follows the UNCITRAL Model Law. The Sri Lanka Act
Provides that by an agreement “any dispute” can be determined by arbitration “unless the matter
in respect of which the arbitration agreement is entered into is contrary to public policy or is not
contrary to determination of Arbitration. The Sri Lanka Act provides that an arbitration
agreement shall be in writing.

With the introduction of the Arbitration Act No. 11 of 1995, construction disputes are more
likely to move towards the arbitration in Sri Lanka. The Act and institutions such as Institute for
Development of Commercial Law and Practice ( ICLP), Sri Lanka National Arbitration Centre
(SLNAC) and International Chamber of Commerce Sri Lanka ( ICCSL) provide better
infrastructure for arbitration practice. About 120 countries have signed the New York
Convention and that facilitates enforcement of awards in all contracting states including Sri
Lanka . In this scenario arbitration plays a major role in commercial matters (Kanag-lsvaran,
2006). Kanag-Isvaran identified, Enhancing its finality, Waive appeal by exclusion agreement,
Arbitration agreement bar to court, Limited court intervention, Party autonomy, recognition and
enforcement are as basic elements of the Act. In the construction industry each individual
contract contains a degree of uniqueness even though the contracts may be based upon
standardized forms. Construction ranges from building work to engineering works as structural
engineering steel, concrete frames, soil engineering including design and foundations, services
engineering, sewage disposal and healthy engineering etc. These involve wide range of nature
of work and the contract run for long periods and often creating conflicting problems. The
construction industry has generally used arbitration rather than the courts as the means of
settling any disputes which arise between the contractor and the employer. This arise because
the disputes were more generally of a technical nature and the parties were happier to refer their
dispute to a person who understood the technical problems involved and who could bring a
knowledge of the usual practices of the industry to the formation of his judgment. In Sri Lanka
arbitration is the only legally enforceable ADR method backed by the Act No 11 of 1995.The
Act was enacted as a comprehensive Act on arbitration to replace the outdated legislation in
existence, which was inadequate to settle disputes through arbitration. Further there are some
cases which were decided by Superior Courts of Sri Lanka and now those have become a part of
arbitration law as a judicial precedent. As an example Southern group civil construction(
private) limited vs. Ocean Lanka (private) limited case discussed the grounds for setting aside
an Arbitral award and the time limitation for challenge the arbitrator’s award . In State Timber
Corporation vs. Moiz Goh (pvt) Ltd case, court held that the district court has no jurisdiction to
enter in to the arbitration proceeding.

An arbitration agreement must be in the duly prescribed up or formulated form . There should
be in the form an arbitration clause in Institute of Construction Training and Development
(ICTAD) conditions of contract for construction category provides an arbitration clause No.67
for building disputes. According to the arbitration agreement recommended by ICTAD the
period for commencement of an arbitration must take place within a maximum of 90 days and
in accordance with the Federation Internationale Des Enginieurs (/FIDIC) the maximum
period to appoint an arbitrator is 154 days to arrive at the final decision. Sri Lankan present
Act does not specify a time limit .Section 48.1 of the Bidding document of the ICTAD
(Guidelines of the Government of Sri Lanka) provides Arbitration clause for construction
contracts . FIDIC condition 1999 has introduced Dispute Adjudication Board (DAB) system as
a pre-Arbitration requirement. Accordingly dispute between employer & contractor shall be
referred to Dispute Adjudication Board as a pre-Arbitral step before reference same for
arbitration –Clause 20 of FIDIC 1999. When there is no settlement before DAB only the same
dispute can be referred for Arbitration.

4.1. PROBLEMATIC AND CONFLICTING SPHERES OF ARBITRATION.

Dissatisfaction with arbitration within the construction industry become of its perceived
complexity, slowness & expense. Even though, arbitration is the commonly practicing
ADR methods in Sri Lankan construction industry, it has a lot of unique drawbacks
when practicing. Research findings by researchers have mentioned some drawbacks of
Sri Lankan arbitration as delaying the process, high cost of the arbitrators and other
facilities, higher involvement of lawyers, less concentration on technical issues,
unawareness, different resolutions given by different arbitrators, difficulty in
challenging the award, inability to conduct multi party disputes using arbitration and
limited jurisdictions, same procedure apply for all disputes, impossibility of maintaining
the relationship between parties, less satisfaction with the process. There are provisions
for speedy arbitration hearings during the course of the contract under Rule 07 of the
JCT Arbitration Rules. However, the experience of arbitrators themselves is that they
are little used. Some countries in the middle east with which Sri Lankan contractors
have entered into construction contracts, are not parties to New York Convention and
all have to other regional arrangements such as the Amman convention which requests
all arbitral proceedings to be conducted in the Arabic language. On the other hand,
researchers and jurists stated that Sri Lankan arbitration process has become adversarial and
expensive. It is important to review and improve the process because expensive. The serious
criticisms against the arbitrations in Sri Lanka is the time factor. The Arbitration agreement
which is incorporated in the ICTAD category of contract ( under clause No. 67) stipulates that
the period within which the award should be made in 4 months, although the Arbitration
Ordinance of 1948 stipulates a period of 3 months . The present Arbitration Act does not specify
a time limit. Parties are free to fix a desired time period for proceeding and award the
agreement. However this may be an extension if done with the consent of the parties.
According to the arbitration agreement recommended by ICTAD the period for commencement
of an arbitration must take a maximum of 90 days and in accordance with the FIDIC the
maximum period to appoint an arbitrator is 154 days. Hence the time factor remains a major
drawback in the arbitration process. Also, there are no facilities for construction arbitration
other than in Colombo- the commercial capital city in Sri Lanka

5. ADJUDICATION

Adjudication is a system by which disputes are referred to the neutral third party, for a
decision which is binding on the parties only until the dispute is finally resolved by
arbitration or litigation. Statutory Adjudication has been created in United Kingdom by
Housing Grants, Construction and Regeneration Act 1996, which came into force on
1st May 1998. However, in Sri Lanka there is no such statutory authority for
adjudication and the adjudicator’s award has no statutory recognition.In Sri Lankan
construction industry, Adjudication practically proceeds mostly according to FIDIC and
ICTAD conditions of contracts. At the commencement of the contract, parties agree to
the appointment of an adjudicator known as the Dispute Adjudication Board (DAB) or
as sole adjudicator. The adjudicator or the DAB is required to act as impartial experts
and not as arbitrators. It is therefore essential that the adjudicator must only be a person
suitably qualified to interpret technical and contractual matters. According to the current
practice of adjudication in Sri Lanka ,there are seven functions and powers of the
adjudicator. Those can be indicated as follows;
1. Establish the procedure to be applied in deciding a dispute, within the procedural
rule laid down.
2. Decide upon the adjudicator’s own jurisdiction, and the scope of any dispute
referred to it.
3. Take the initiative and ascertaining the facts and matters required for a decision.
4. Make use of their own specialist knowledge.
5. Decide upon the payment of interest in accordance with the Contract.
6. Decide to grant provisional relief such as interim or conservatory measures,
7. Open up, review and revise any opinion, instruction, determination, certificate or
valuation of the engineer related to the dispute.
Adjudication is not popular in Sri Lanka due to non-availability of governing
international convention and non-availability of statutory law. The conditions provide for
reference of any dispute arising between the parties of any kind what so ever to a DAB
comprising one or three persons for decision, which is to be given within 84 days or such other
time as is proposed by the DAB and approved by the parties. The decision is to be reasoned and,
as with other forms of adjudication, is binding until resolved by one of the other methods of
dispute resolution provided for in the conditions. If either party is dissatisfied with the decision,
or the DAB does not deliver its decision within the specified time limit, it may give notice of
dissatisfaction to the other party within 28 days after the decision or after the specified time
limit, and the dispute will be referred to the next stage which is called as arbitration. According
to the FIDIC conditions if either party does not refers the dispute to the arbitration within
specified time period, the Adjudicators’ decision becomes final and binding upon the Employer
and the Contractor. According to the ICTAD conditions the adjudicator shall be a single person
appointed by agreement between the parties. If parties are unable to reach the agreement within
14 days of such request of agreement, the adjudicator shall be appointed by the ICTAD. Either
party may initiate the reference of the dispute to the adjudicator by giving 07 days notice to the
other party. Then the adjudicator shall give his determination about dispute within 28 days -or
such other period agreed by the parties- of receipt of such notification of a dispute.
 6. DISPUTE ADJUDICATION BOARD (DAB) AS AN ADR METHOD.

Dispute review boards, sometimes referred to as dispute boards or dispute adjudication boards
were evolved from the role of the engineer as decision maker in the first instance under various
standard forms of construction contracts. The international federation of civil engineers, a
prolific publisher of standard form contracts for international projects, introduced the DAB in
response to the condemnation of the dual role performed by the engineer as both the client`s
agent and independent decision maker. In 1999 FIDIC published there major sets of condition
of contract (the red, yellow and silver books) all of which contained DAB provisions. FIDIC
condition 1999 has introduced the DAB system as a pre arbitration requirement.

The DAB may be composed of either a one member or three member board. When a board
consists of three members, the owner will appoint a member, the general contractor will appoint
a member, and the parties will mutually agree on the appointment of a third member who will
act as chairman. It is prudent to keep the number of members to an odd number, so that it is
possible to achieve a majority decision where the panel cannot reach unanimity. A decision that
has a quasi-binding effect, where the decision is binding unless the dissatisfied party follows the
appropriate procedural rules, will allow the parties to maintain a less adversarial and more
amicable relationship on the construction site while giving the parties an opportunity to contest
a DAB decision that they feel is particularly egregious, erroneous, or improper for a DAB to
decide. The DAB has broad power to establish procedural rules, decide upon its own
jurisdiction, and decide the scope of any dispute. The DAB has the power to take its own steps
to ascertain facts required to make a decision, including employing the use of its own specialist.
The FIDIC conditions of contract include provisions for the submission, consideration and
resolution of claims and disputes under a number of different clauses. The primary clause of
interest here, clause 20, deals specifically with claims, disputes and Arbitration. It envisages the
establishment of a Dispute Adjudication Board, known as the DAB. According to the FIDIC
contract, the decision of the board becomes final and binding if no notice of dissatisfaction has
been issued within a period of 28 days. If such a notice has been served by either party, the
contract sets out that the parties have to attempt to resolve their dispute amicably before the
commencement of arbitration.

6.1 TYPES OF DAB

The FIDIC conditions of contracts provides for two distinct types of DAB as,

 Full term DAB

 Ad-hoc DAB

Full term DAB comprises one or three members who are appointed before the contractor starts
executing the works, and who typically visit the site on a regular basis thereafter. The main
reason for a full term DAB is to deal with disputes on or related to the construction site. A
standing panel may also be able, if desired by the parties, to act as an informal sounding board
when issues first arise and before they are formally referred to dispute resolution.

The second type of DAB is the ad-hoc board, which comprises one or three members who are
only appointed if and when a particular dispute arises, and whose appointment typically expires
when the DAB has issued its decision on that dispute. It loses the distinct advantage of having
an on-call DAB to assist in making decisions.

The role of the Dispute Adjudication Board includes both proactive and responsive duties:
proactive in organizing and managing its tasks in such a manner as to produce the most
effective result; and responsive in responding to the parties’ wishes when seeking either an
informal opinion or a formal dispute resolution .In Sri Lanka the DAB comes in to effect in
most of contract only after completion of the project. That is the ad-hoc DAB procedure is
mostly practiced and also sometimes a dispute board is selected on a“stand by basis and parties
are not inviting adjudicator to site visit and meetings.

6.2 ADVANTAGES AND DISADVANTAGES OF DAB

The researchers have identified the significant advantages of DAB to review the current DAB
practice in Sri Lanka as,

 Experienced Experts
 The cost is much less expensive than arbitration
 Resolve issues before leaving the site
 The great evidentiary weight DAB decisions are afforded at subsequent arbitrations
 Early resolvement of disputes
 Preservation of Relationship

Since construction disputes involve technical issues, expert opinion resolution of disputes is
beneficial when mixed legal and technical disputes are at issue. The DAB allows more
experience and greater relevant expertise to be applied to construction disputes. The strength of
the adjudication process is that it provides a rapid and cost effective mechanism for deciding a
dispute, which can be undertaken during a project without major distraction from the overall
project objectives. A major advantage of the DAB is that it can operate on site and resolve
issues before leaving the site. Further attitudes remain positive, not adversarial since parties are
less inclined to send acrimonious correspondence that can damage relationships.

There are very few disadvantages of DAB process and those can be mentioned as follows,

 Cost
 The Decision is not Legally enforceable

The cost inherent to the early establishment of DAB`s make this less appropriate in construction
projects of a smaller scale. A major disadvantage of DAB is dispute board decisions cannot be
enforced in the same way as arbitration awards or court judgments. If a party does not comply
with the decision then the only remedy is an action for breach of contract (through local courts
or arbitration), which may be costly and time consuming to pursue.

7. RESEARCH METHODOLOGY

For this research preliminary survey, detailed questionnaire survey and semi structured
interviews were carried out to collect data from the construction industry. Questionnaires were
distributed among 40 professionals in the consultant and contracting organizations and semi
structured interviews were carried out among 5 professionals in the dispute resolution field. The
questionnaire requested the respondents indicate their degree of agreement, on a five point
Likert scale ranging from very low degree of agreement to very high degree of agreement. Mean
weighted rating was used to analysis of data collected from questionnaire survey and content
analysis was used to analysis the data collected from semi structured interviews.

8. DATA ANALYSIS

Dispute Adjudication Boards achieved prominent success in the construction industry due to its
significant advantages over other most traditional dispute resolution methods. The professionals
in the construction industry identified following advantages which can be gain from the Full-
term DAB over arbitration. Advantages were ranked based on the mean weighed rating worked
out by the questionnaire survey as shown in the table 1.

Advantages Rank

Reduce time and shorten the dispute resolution process. 1

Enhances the credibility of the decision 2

Provide a Dispute Avoidance mechanism 3

Addressed the disagreements / dispute, without the need for the historical
4
reconstruction of events as in arbitration

Better communication among parties 5

Table -1-Advantages of DAB.

There are many advantages of DAB process and the benefits that can be gained from the DAB

Depend on the careful implementation of the DAB process, five critical factors were identified
which are affecting to a successful DAB through literature review and preliminary survey.
Critical success factors were ranked based on the mean weighed rating worked out by the
questionnaire survey as shown in the table 2.
Critical factors Rank

Expertise area for DAB should be selected based on the nature of the project 1

The Dispute Board need to receive relevant all documentation during the course of 2
works and site visits for deliver fair decision.
DAB members should aware balance of experience and technical expertise. 3

DAB members should protect neutrality, integrity and expertise for a successful 4
DAB
The success of the DAB process depend largely on the owner and the 5
contractor`s mutual trust and confidence.

Table -2-Critical factors of DAB.

The success of DAB process depends on contracting parties satisfaction with every Board
member. Therefore both parties must carefully investigate nominees to ensure that each
nominee is experienced and technically qualified person. If either party is uncomfortable with a
member of a DAB the DAB process become ineffective. The ability to analyze the technical
matters is very essential characteristic of a DAB member. Otherwise there is a high risk of
failing the disagreement addressed properly. Each member should also have a certain amount of
knowledge of contract administration and the ability to interpret contractual provisions.
Absence of these loses leads to DAB procedure ineffective. The type of disputes varies
according to the nature of the project. And the technical expertise required for the project based
on the nature of the project. Therefore expertise for the DAB should be selected based on the
nature of the project. The nature of the project defines the areas which DAB members should be
expertise. This is a process largely based on the attitudes of the parties, the mutual trust and
confidence of the board is a major success factor. Also regular site visits, meetings and reports
from the parties are important to make fair decisions. In addition to that DAB members need to
keep updated relevant project correspondence, monthly and other periodic reports, modifications
to contract documentation, and potential disputes. Site visits should be maintained in a
frequency that DAB members can sufficiently informed about the working progress and the
probable conflicts.

9. BARRIERS TO IMPLEMENT FULL - TERM DISPUTE

ADJUDICATION BOARD IN SRI LANKA

The respondents stated following factors as barriers to implement Dispute Adjudication Board
procedure in construction industry of Sri Lanka.

• Lack of awareness of the DAB process

• Attitudes of the parties
• Lack of construction industry professionals acting as adjudicators
• Absence of legal framework to enforce the decision
• Perception of high cost
 • Absence of provisions for Full-term DAB in domestic standard conditions of contracts

DAB is not a popular method for dispute resolution in construction industry of Sri Lanka. The
knowledge of the contracting parties regarding the correct DAB process is very less since there
are no any institute for regulating the process and no any awareness programmes conducting to
educate the industry people. Moreover In Sri Lankan context, although the DAB appointed at
site level parties are not being invited the DAB members for the site visits. Maintaining site
visits throughout the project and receiving relevant documentation is a critical success factor of
a DAB. Therefore this situation directly affect to the success of the DAB. In Sri Lankan
stakeholders tend to go for next solution even though they feel the decision given by the DAB
is correct. Therefore absence of legal framework to enforce the decision is directly affected to
the successful implementation of the DAB. Further very few construction industry professionals
are acting as adjudicators in Sri Lanka. Due to this reason contracting parties may unable to
select an adjudicator based on the nature of the project. However, this is a major success factor
of the DAB. Further it diminish the opportunity of selecting parties by balancing experience and
technical expertise, selecting parties for their neutrality, integrity , and the parties confidence of
the DAB. Therefore this barrier leads to diminish most of the critical success factors of DAB. If
DAB decision cannot be enforced the cost of maintaining a DAB throughout the project is a
waste. Most of the contracting parties believe that the cost of maintaining a DAB throughout the
project is a waste. This perception of high cost is a major barrier to implement the Full- term
DAB in Sri Lanka. Since most of the contracting parties use the Sri Lankan conditions of the
contract for their projects familiarity with the full term DAB is very less. Although the FIDIC
conditions of contract contains provisions for full term DAB, most of the contracting parties not
use the FIDIC document for their contracts. This is a major barrier to implement Full-term DAB
in Sri Lanka.

10. SUGGESTIONS TO IMPROVE FULL- TERM DISPUTE

ADJUDICATION BOARD IN SRI LANKA

Suggestions were presented for the purpose of minimizing the barriers to implement the DAB
practice in Sri Lanka are as follows.,

• Conducting awareness programmes regarding DAB

• Change the attitudes of contracting parties pertaining to recognition of DAB
• Develop a mechanism to directly enforce the decision of DAB
• Institutional support
• Incorporate a Full-term DAB provision to the domestic standard conditions of contracts

Through the awareness programmes contracting parties can encourage and informed about the
importance of regular site visits, to get advices and opinions from the DAB for small
disagreements. By conducting awareness programmes a main barrier to implement the DAB can
be minimized. Further the contracting parties to a construction project should educate
themselves about how to properly use the DAB process. Moreover since this is a mechanism
which is based on the mutual trust and confidence of the parties unlike the adversarial system,
the attitudes of the parties directly affect to the success of the DAB. Therefore attitudes of the
parties should be changed. The industry professionals should be encouraged to enter in to this
field and work as adjudicators to develop this field. Since the technical competence and
experience of the adjudicator is a main success factor of the DAB adjudicators should be borne
by the construction industry itself. Therefore by giving necessary knowledge of the DAB
process and its benefit to the industry and the professional should be welcome to this field.
Since FIDIC clauses also not provide a direct way to enforce the DAB decision, developing a
mechanism to enforce the decision is very important. Majority of the contracting parties are
reluctant to use this mechanism since the decision of the DAB not enforceable. By developing a
mechanism to directly enforce the DAB decision this barrier can be minimized. Further the
construction industry professionals who are involved in producing contract documents can take
a step to incorporate the full term DAB to domestic contracts.

11. CONCLUSIONS

The results showed that Sri Lankan construction industry can gain numerous advantages from
the Full-term DAB including shorten the dispute resolution process, dispute avoidance practice
and better communication among parties. However several barriers impeding to gain those
advantages from Full- term DAB. Some of those barriers directly affect to the critical success
factors of DAB. To gain the advantages from the Full-term DAB in Sri Lanka critical success
factors should be generated and Barriers should be minimized. This study has identified the
barriers to implement full-term DAB practice in Sri Lanka and provides suggestions to
minimize the barriers and generate critical success factors to establish the Full-term DAB
procedure in Sri Lanka.Drawing from the results of this study, it is recommended to implement
new institution for conduct DAB process in Sri Lanka and conduct awareness programmes for
industry practitioners and students who are willing to become construction industry
professionals in the future to improve the Full-term DAB procedure in Sri Lanka.

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