A crucial legal issue in relation to international construction contracts over the past decade has concerned the manner in which decisions of the Engineer made under Clause 67 of the FIDIC Conditions of Contract for Works of Civil Engineering Construction, fourth edition, 1987, and, since the Engineer was replaced by the Dispute Adjudication Board (“DAB”) in the 1999 edition of the FIDIC Conditions (the “1999 Red Book”), how to enforce decisions of a DAB made under Clause 20.
The interim award in Case No. 10619 under the Rules of Arbitration of the International Court of Arbitration of the International
Chamber of Commerce (“ICC”) is instructive. It was an award made in Paris, France in 2001, expressly addressing the question of how to enforce decisions of the Engineer made under Clause 67 of the FIDIC Conditions, fourth edition and, by analogy, how to enforce decisions made by a DAB under Clause 20 of the 1999 Red Book.
In that award, a tribunal of three arbitrators held unanimously that decisions of the Engineer under Clause 67 of the FIDIC Conditions, fourth edition, could be enforced by a partial or interim award under the Rules of Arbitration of the ICC (the “ICC Rules”), even though a party had given a formal notice of dissatisfaction with respect to the decisions within the time limit (70 days) provided by that Clause.
This is because the FIDIC Conditions expressly provide that a decision of the Engineer under Clause 67 is binding on the parties notwithstanding that one or both parties have given a notice of dissatisfaction with it.
Accordingly, the arbitrators held that an arbitral tribunal should enforce it by an interim or partial award under the ICC Rules, ordering the other party immediately to pay the amount of the Engineer’s decisions.
The interim award should enhance respect for decisions of the Engineer under a disputes clause such as Clause 67 as well as decisions of a DAB under Clause 20 of both the 1999 Red Book and the 1999 editions of the other FIDIC contracts for major works.