DISPUTE REVIEW BOARDS -REASONS-NEED-METHODS-RESPONSIBILITIES-PROCESS-FUNCTIONS- ADVANTAGES AND DIS ADVANTAGES

1. CN2114- CONTRACT LAWS AND REGULATIONS
SRM UNIVERSITY
Kattankulathur, Chennai – 603203
A presentation on
DISPUTE REVIEW BOARDS
By
T.Surya Prakash reddy - RA1612002010030
CONTACT NO 8008916165

2. REASONS FOR ALTERNATE DISPUTE
RESOLUTION
1. Variation in the quantities of work
2. Payment of rates for the excess/ extra quantities
3. Interpretation of the contract drawings and designs
4. Sub soil classification
5. Quantum of de-watering during excavation
6. Quality of work and workmanship
7. Time of performance and extensions
8. Delays in performance of the contract due to faults of the
owner/engineer
9. Delay in the performance due to faults on the part of the
contractor
10. Delay in getting possession of the site work and its actual
release
11. Delay in making due payment to the contractor
12. Decisions as regards the delay falling within the scope
13. Refund and failure of security deposit
14. Quality of materials used

3. NEED OF ADR
• The number of litigation in civil is rising at an
alarming rate.
• The resources to deal with cases in the courts are
also very limited.
• The number of judges and court rooms are also
not sufficient.
• We have to spend a considerable portion of funds
to meet with the costs of litigation and for
payment to lawyers.
• The procedure is cumbersome and involves loss of
time.
• Money spent on fighting court cases and paying
fees to lawyers can be utilized for the best
interests of the beneficiaries of developmental
activities.

4. NEED OF ADR…….Contd
• It is therefore, high time, that some systems and
methods of alternative dispute resolution are
developed, so that the disputes can be decided during
process of the execution of the work/project by way,
of mutual understanding and necessarily not after the
disputes are placed before the arbitrator.

5. METHODS OF ALTERNATE DISPUTE
RESOLUTION
1. Advisory Arbitration
2. Dispute review boards (DRB)
3. Conciliation
4. Executive tribunal
5. Expert appraisal
6. Negotiations

6. AIM/RESPONSIBILITIES OF DRB
• Reduction in court over crowding.
• Lowering of barriers to access.
• Achievement of superior resolution.
• Injecting power into local communities to
handle their own disputes.
• Reduction of costs.
• Production of a less contentious society by
adopting a process of resolution by effective
use of mediation, arbitration and various
composite techniques.

7. DISPUTE REVIEW BOARDS
• The DRB method of dispute resolution was developed by the
committee on contracting practices of the underground technology
research council of ASCE.
• For major engineering projects, the method of dispute review and
resolution boards sounds to be the most appropriate method.
• This consists of appointing a high level body, consisting of the
representatives of the owner/engineer as well the contracting
agency.
• The board also includes the Project managers of different
professions concerned with the implementation of the project as
well as representative of the contractor.
• Professional and legal experts who are not a part of the project
organization, can also be made member of the dispute resolution
board(DRB).

8. • The DRB should be appointed right at the time of the commencement of
the project and award of contracts.
• A specific clause should be prescribed in the contract stating all disputes
relating to the contract shall be put up to the DRB and the decision of the
board shall be final and binding to all the parties to a contract.
• The DRB comprises three members: one selected by the owner, one by the
contractor, and a third selected by the first two.
• All DRB members are impartial and experienced in construction. They are
appointed soon after the contract is awarded
• DRB members are sent progress reports and visit the project periodically.
• The DRB is not used for routine claims or differences of opinion, but for
the resolution of major problems.
• The recommendations of the DRB are not legally binding, but are not
likely to be reversed in litigation.

9. PROCESS OF DRB
• The DRB operates under rules specified in the contract. Usually these rules
are the rules of a nominating authority such as the National Technology
Dispute Centre.
• At the commencement of the project, the DRB meets and is provided with
sufficient project documentation to enable them to become familiar with the
project deliverables, schedules, budgets, risks and issues. The DRB meets on
a regular basis, usually on site and usually with representatives from the
parties’ project teams.
• When a dispute or issue is referred to the DRB, the DRB considers the
dispute and makes a recommendation. Unless a party objects within a set
period of time, the recommendation becomes binding under the contract.
• If a party objects the dispute may be referred to other resolution mechanisms,
usually litigation. The recommendations of a DRB are usually “with
prejudice”. That is, the recommendations can be used by a party during
litigation.

10. COST OF DRB
• There are two costs associated with a DRB.
• The first is the initial set up cost. This provides the
parties with the structure within which to establish the
DRB. The set up cost includes a license to use the DRB
Rules, the clauses to add into a contract and a
nominating authority to appoint members if the parties
can not.
• The second cost is the monthly retainer for each DRB
member. For most large projects this is equivalent to 2-
3 man days for each member per month. For smaller
projects it can be as low as 1 man day for each member
per month.

11. FUNCTIONS OF DRB
• The primary function of a Dispute Board is to assist the parties to avoid disputes if possible
by facilitating and improving communication and encouraging the resolution of
contentious issues by the parties at the job level before they become disputes, or if not, to
assist them to resolve disputes quickly and cost effectively without the need for arbitration
or litigation.
• The DRB shall serve as an advisory body to assist in the resolution of disputes between
the State and the Contractor, hereinafter referred to as the "parties."
• The DRB can be made to meet at regular periodical intervals to review the activities
relating to the contracts and also discuss and decide the issues which are likely to result
into disputes.
• This would help in solving the problems before the actual disputes, both the parties i.e the
Engineer in charge and the contractor can put up their views and claims before the DRB.
• The board, after hearing the views put up by both parties and its own evaluation and
examination of relevant materials on record, can take a final decision leading to the
resolution of dispute.

12. In case of government and public sector organizations DRB’s can be
constituted at various levels.
1.For small projects at district level
a) District collector – Chairman
b)Concerned executive engineer – Member
c) Other executive engineer – Member
d) Representative of the contractor – Member
2.For medium and regional level projects
a) Concerned Chief engineer – Chairman
b)Concerned superintending engineer – Member
c) One other superintending engineer – Member
d) One outside expert – Member
d) Representative of the contractor – Member
3.At state level and for major projects
a) Chief executive of the organization – Chairman
b)Financial advisor/controller – Member
c) Engineer in chief – Member
d) Two senior outside experts – Members
(one to be nominated by contractor)
d) Representative of the contractor – Member

13. ADVANTAGES OF DISPUTES REVIEW BOARDS
• The DRB hears disputes on an informal basis and can provide
recommendations for their timely resolution before parties
adopt hard positions leading to litigation.
• The parties are comfortable with the recommendations of the
DRB since the selection of the DRB members is controlled by
the owner and the contractor.
• Because they meet periodically and they are sent progress
reports, the DRB members are familiar with the elements of the
project.
• Although the DRB recommendations are not binding on either
party, there is strong motivation to accept the findings

14. DISADVANTAGES OF DISPUTES REVIEW
BOARDS
• The impartiality and conflict-of- interest portion of the
DRB specification is so tough that sometimes there are
not enough qualified people for the DRB.
• The project must be large enough, and the probability of
the occurrence of disputes throughout the course of the
project must be high enough to justify the expense of
retaining the services of the DRB members for the entire
duration of the project.

15. LIMITATIONS OF DISPUTE REVIEW BOARDS
•DRBs add expense but not add value to the project
•presence of bias or lack of qualifications in Board
members
•DRBs impose personal equity rather than contract
provisions
•presence of a DRB will promote claims
•DRBs are unreliable because they lack the formalities of
legal proceedings
•historical culture of “power & control”
•expectation of a binding decision
•in high value disputes, losing party motivated to try
litigation
•parties may undermine the DRB process

16. CONCLUSION
• Alternate dispute resolution mechanism
will relieve us from the tedious court
procedures and defects of arbitration.
• It would save both National time and
National costs.