SERVICES ON THE DISPUTE AVOIDANCE/MEDIATION/ADJUDICATION BOARD (DB)

1. Dispute Avoidance/Mediation/Adjudication Board

What is DB?

DB (Disputes Board) is generally named for referring to the Dispute Avoidance/Mediation/Adjudication Board. Usually been known under many different names such as DRB (Dispute Resolution Board; Dispute Review Board), DAB (Dispute Adjudication Board), DAAB (Dispute Avoidance / Adjudication Board), DB is a mechanism commonly found in complicated contracts that have a long-term implementation, for purpose of disputes’ avoidance, mediation and resolution.
In the construction sector, the Government has regulated the establishment of the Dispute Resolution Board (DB) in Clause 2, Article 45 of the Decree 37/2015/ND-CP detailed regulations on construction contract.

When and how was the DB established?

Dispute Avoidance/Mediation/Adjudication Board is usually a standing mechanism established after the parties in the contract sign or start implementing the contract. The DB is responsible for helping the parties to prevent or overcome conflicts, to avoid the conflict. If a dispute arises, the members of DB will be the mediators, resolving the dispute before it escalates and forces the parties to seek arbitration or court.
DB can also be established in the form of ad-hoc, ie established only when a dispute arises and will be dissolved when the dispute is resolved;
The DB is usually established with one or three independent and objective members with the parties in the contract;

Who are the DB members?

DB members are experts (lawyers, construction engineers, architects, arbitrators, mediators …) having qualifications suitable to content dispute, experiences in solving problems on contract disputes and understanding of legal provisions related to construction contracts (Article 45 of Decree 37/2015 / ND-CP).

According to the FIDIC 2017 contract, a member of the DAAB has to meet the requirements for independence, language proficiency and experiences in the FIDIC contract.

The parties in the Contract can put in the contract more specific requirements on the members of the DB, for example about years of experience, or being an arbitrator, mediator…

What sectors usually use DB?
  • Construction is the widest sector in which the DB is used. In this field, the DB is often established at the beginning of a project with the purpose of monitoring the construction process, encouraging dispute avoidance, adjudication and mediation;
  • The DB is also effective in resolving disputes in other areas such as research and development, intellectual property, business corporation contract, and M&A contract.
Has the practice of Vietnam applied DB yet?

The FIDIC Contract is one of the typical model contracts issued by the International Association of Consulting Engineers, favored and used by many investors, contractors, and engineers from all over the world. Currently, construction projects with foreign elements in Vietnam are also using the FIDIC contract, especially projects where Vietnam borrowed capital from the JICA budget (Japan International Cooperation Agency), WB (World Bank), ADB (Asian Development Bank) and other international organizations. However, the number of contracts that use DB is still low during contract performance or dispute resolution. The contracting parties often ignore establishing a DB or wish to establish a DB but are not be able to. One of the reasons is that the parties in the construction contract have many difficulties in seeking a construction specialist with knowledge and experience in FIDIC Contract in Vietnam to be a suitable DB member.

As of FIDIC 2017, the FIDIC Contract has required that DAAB is a mandatory procedure prior to arbitration. Therefore, in the future, parties to construction projects with foreign elements in Vietnam will have to use dispute resolution procedures by DAAB. Along with the provisions of Vietnam Construction Law on dispute settlement through the DB, Vietnamese investors and contractors should learn about the DB and have suitable consultants to use this mechanism in an effective way.

2. The service of VICMC

In order to support the parties of construction contracts in particular and other contracts wishing to use the DB mechanism to avoid and mediate disputes, VICMC cooperates with many engineers and lawyers specializing in construction, intellectual property, and energy… provide the following services:

2.1. Providing the information for FREE as follows:
  • The role and importance of DB and the benefits of using DB in complicated, medium or long-term contracts, especially construction contracts;
  • How to improve the efficiency of using DB in Vietnam in general and in each specific contract as well as in the procedure for the enforcement of the DB’s decision.
2.2. DB member appointment service and other related services
  • Selecting, proposing, and appointing DB members, ensuring the criteria in international model contracts or bidding documents. In addition to the criteria set out by the International model Contracts, VICMC will seek, select and introduce experts who are knowledgeable about Vietnam Law and the practices of construction contracts, intellectual property, and energy… in Vietnam and most suitable for disputes related to construction, intellectual property, and energy… projects in Vietnam;
  • Considering the requirement to change DB members.
  • Determining the DB member’s remuneration and other costs related to the establishment of the DB in accordance with Vietnam Law, especially with the regulations on the management and use of State Budget Capital.

For further information about the service and fee, please contact VICMC at secretariat@vicmc.vn or hotline: 0862399188.

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Vietnam International Commercial Mediation Center – VICMC
➖ Email: Secretariat@vicmc.vn
➖ Hotline: 0862 399 188; 024.6671.6696
➖ Website: http://www.vicmc.vn/
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