The author underlines the benefits of the Dispute Boards in the resolution of disputes arising from international construction contracts. The article first describes the types of disputes most frequently connected with this kind of contracts and illustrates when, why and by whom the Dispute Boards were introduced. It then goes on depicting the general features of the Dispute Review Board, which issues recommendations, and Dispute Adjudication Board, which issues binding decisions. It further compares Standing Boards, appointed for the entire life of the contract in view of potential future disputes, and Ad Hoc Boards, appointed for the resolution of a specific dispute after it has arisen. Specific attention is given to the conditions at which a board resolution may become legally binding and final on the parties.
Particular focus is given to the advantages of this instrument, such as the composition of the board by experts in the field who become familiar with the project thanks to their regular site visits, the relative short duration, informality and low costs of the proceedings and the benefit for the parties to obtain prompt and progressive resolution of the dispute as long as they occur. These advantages are compared to the arbitration features, especially its longer duration, higher costs, heavier formalities and the inevitable need to refer to arbitration an all-inclusive bulk of disputes long after the time of the relevant events, which burdens the task for parties, counsel and arbitrators.
As it appears from the article, referral to the boards does not replace arbitration, but rather obliges the parties to try to have the dispute settled by the board as a condition for then submitting it to arbitration if the board determination does not become final because of a notice of dissatisfaction by one of the parties. The two-tier mechanism is an important deterrent to limit the number of disputes referable to arbitration. The practice shows that only a limited percentage of disputes, normally those most intricate or implying crucial legal aspects, are referred to arbitration after unsuccessful exhaustion of the board process. In the view of the author, the board practice is to be viewed with favor.