What if the DAB declines the referral?
Under the standard FIDIC form (both 1999 and 2017), the basic default position is that obtaining a Dispute Adjudication Board (“DAB”) decision is a pre-condition to a dispute being referred to arbitration. Where there is no DAB, questions sometimes arise about how a party can actually proceed to arbitration.[1],/sup>
In the case of DSR v DSQ [2026] SGHC 67, the Singapore High Court had to consider a variant on this theme: here the DAB did not consider that it had jurisdiction to hear the claims that were referred to it. The DAB was an ad hoc one, and the case provides useful guidance as to when you can refer disputes to this type of board. The case also considers whether objections based on the alleged non-compliance with pre-arbitral procedure go towards admissibility of the disputes which were referred to arbitration, or to questions about the jurisdiction of the Tribunal.
Here, the parties entered into a design and build contract for works on a railway project. Disputes arose, which the contractor referred to arbitration. The Tribunal awarded monies to the contractor, but the employer applied to the High Court of Singapore to set the award aside, arguing that the Tribunal lacked jurisdiction.
Since the court case followed an arbitration, the project and parties are not identified. However, the contract was clearly based on the FIDIC standard form which required, in the usual way, that any disputes were referred to a DAB. The DAB in question was an ad hoc board, which typically is formed only once a dispute has arisen. Under the 1999 FIDIC Yellow Book, Sub-clause 20.2.2 provides that a DAB is appointed once a dispute arises and that that appointment expires upon the delivery of its decision, unless a further dispute has been referred to it before the 84-day referral period had expired.
The DAB proceedings: Disputes 1 to 4
The DAB was constituted and the contractor referred the first dispute (the “AEB dispute”) to it. Before the DAB gave its decision in the first referral, the contractor referred four other disputes to the DAB (Disputes 1 to 4), which it later referred to the arbitration. The contractor presumably did this to keep the DAB alive, so steps did not need to be (re-) taken to form the existing or a new DAB.
However, the DAB declined to decide Disputes 1 to 4 on the basis that it had only been appointed for the AEB dispute. No decision was given within 84 days or at all. After 84 days had passed, the contractor issued a notice of dissatisfaction, and a further 59 days later, the contractor filed and served its request for arbitration.
The employer’s objection was that the contractor was not entitled to refer Disputes 1 to 4 to the DAB, stating that the contractor should have taken steps to have a new DAB appointed to decide those disputes instead of issuing the notices of dissatisfaction.
The Tribunal and Andre Maniam J disagreed, meaning that the contractor was entitled to have commenced the arbitration when it had. Both noted that Sub-clause GCC 20.4 provided that:
“If a dispute (of any kind whatsoever) arises between the Parties in connection with, or arising out of, the Contract or the execution of the Works, … then after a DAB has been appointed pursuant to Sub-Clause 20.2 … either Party may refer the dispute in writing to the DAB for its decision…”.
This meant that if a fresh dispute arose between the parties, then, after a DAB has been appointed under Sub-clause 20.2 following the issue of a notice of an intention to refer a dispute to a DAB, either party may refer that fresh dispute to the DAB for its decision.
Once a DAB had been appointed under Sub-clause 20.2, any other dispute which has arisen in the meantime may be referred to it. The question of whether any particular DAB can (or must) deal with more than one dispute was put beyond doubt by the last paragraph of Sub-clause 20.2. The expiry of the appointment of a DAB occurred when it had given its decision on the dispute referred to it under clause 20.4 “unless other disputes have been referred to the DAB by that time under Sub-Clause 20.4”. If further disputes could not be referred to the already appointed DAB, these words would have no meaning.
The result was that a DAB must deal with any further disputes referred to it prior to the date on which it gives its decision in the first dispute. In the Tribunal and judge’s view, this was the only realistic interpretation. To Andre Maniam J, this made “commercial sense”. It would be “unwieldy” for there to be a series of DABs in place at the same time, each dealing with a separate dispute.
The judge agreed with the employer that the DAB was not a standing DAB; it was an ad hoc DAB whose appointment could expire before the end of the project. However, this did not help the employer. The DAB did not need to be a standing DAB for the contractor to be able to refer other disputes to it. Clause 20 contemplated that other disputes may be referred to an ad hoc DAB before it had given its decision on the first dispute referred to it, and Sub-clause 20.2 further made specific provision for the duration of the DAB’s appointment to be extended in that event.
Further, the DAB fee structure, which was on a “per dispute” basis, did not support the idea that the DAB was appointed only to decide the AEB dispute. If Sub-clause 20.4 allowed the contractor to refer other disputes to the DAB, then the DAB members were obliged to decide those other disputes. The fact that there was only one dispute (the AEB dispute) when the DAB was appointed, and in that sense the DAB was appointed to decide that dispute, did not mean that it could only decide that dispute.
Finally, the opinion of the Tribunal and judge was supported by the FIDIC Contracts Guide (1st Ed, 2000):
“…the appointment expires when the ad-hoc DAB has given its decision, unless (by that time) another dispute has been referred to it in accordance with the procedure specified in Sub-Clause 20.4.”
That is what has happened here.
The DAB proceedings: Disputes 5 to 6
The contractor approached Disputes 5 to 6 differently, simply submitting them straight to arbitration, along with Disputes 1 to 4.
In the arbitration, the employer conceded that if it was wrong on Disputes 1 to 4, then it would be sensible for Disputes 5 and 6 to be referred directly to arbitration. This would make sense since the claims were inextricably tied up with Disputes 1 to 4. However, the Tribunal went on to ask whether a wrongful refusal to accept the referral of a dispute affected the obligations of the parties to the principal contract. The Tribunal said that it did.
The refusal of a DAB to accept a valid referral of a dispute may cause the contractually agreed dispute resolution machinery in relation to the DAB to break down. Here, the situation would have become unworkable if a DAB was required to determine (the interrelated) Disputes 5 and 6 whilst Disputes 1 to 4 were the subject of arbitration proceedings.
The upshot of a party being able to refer a dispute to the DAB was the obligation on the DAB to accept that referral. The refusal by the DAB to do so enabled a claimant to go straight to arbitration. Here, the contractor had properly complied with the dispute resolution machinery in the contract. Given the DAB’s wrongful refusal to accept the referral of further disputes, the contractor did not need to refer Disputes 5 to 6 to the DAB; it could go straight to arbitration.
The judge added that Sub-clause 20.8 gave further support to the contractor, stating that: “[i]f a dispute arises between the Parties in connection with, or arising out of, the Contract or the execution of the Works and there is no DAB in place, whether by reason of the expiry of the DAB’s appointment or otherwise”, then the dispute may be referred directly to arbitration.
The judge emphasized the words “or otherwise“, noting that this covered where the dispute resolution machinery relating to the DAB had broken down, for example, a DAB wrongfully refusing to accept the referral of further disputes (which were properly referred under Sub-clause 20.4).
When it came to the question of jurisdiction, the employer was further prevented from making its challenge because of the law applying to the dispute resolution provisions of the contract. Under Article 16(3) of the UNCITRAL Model Law and/or section 10 of the International Arbitration Act 1994, the employer had 30 days to raise its jurisdictional challenge, which it failed to do.
Did the employer’s jurisdictional objections go towards jurisdiction or admissibility?
Finally, the court also had to consider what happens when a party commences arbitration without complying with the pre-arbitration dispute resolution steps set out in the contract. Were these matters of jurisdiction which prevented the Tribunal from deciding the claims, or were they matters of admissibility (whether or not it was appropriate for the Tribunal to hear the case)?
Here, the dispute resolution procedure involved the making of a reference to a DAB. Under Sub-clause 20.4, the DAB’s decision was, in the familiar words of the FIDIC form, binding on the parties who were required to: “promptly give effect to it unless and until it shall be revised in an amicable settlement or an arbitral award“.
If a party disagrees with the decision, they must serve a timely notice of dissatisfaction, and any arbitration cannot be started until the amicable settlement period has elapsed. The judge noted that, in other words, if either party does not accept the DAB’s decision and the parties do not settle the matter amicably, then it is arbitration rather than reference to a DAB that ultimately decides a dispute between the parties.
Andre Maniam J considered that this left the case “squarely” within the general rule that pre-arbitral procedure is typically a matter of admissibility rather than jurisdiction. Having agreed to submit their disputes to arbitration rather than to a court, the parties likely intended for the arbitral tribunal to resolve any dispute over compliance with pre-arbitral procedure, rather than to have a further round of decision-making before a court to resolve that dispute. This meant that the Tribunal’s decision on the employer’s jurisdictional challenge was a decision on admissibility, which the court could not review.
[1] See for example: “FIDIC Dispute Adjudication Boards” (February 2015).
