DB was first introduced in United States in 1970s as an alternate to “engineer’s adjudication” where an engineer would be unilaterally appointed by the employer. Later, this novel form of dispute avoidance found its way in standard bidding documents of the World Bank and was subsequently adopted by the International Chamber of Commerce, International Federation of Consulting Engineers (‘FIDIC’), etc.
DB is an adjudicatory mechanism aimed at resolving disputes before resorting to mediation/ arbitration/ litigation. DB operates as a neutral body comprising of industry experts tasked with providing project oversight and/ or resolution services throughout the project lifecycle.
DB is a creature of contract between the parties/ stakeholders bereft of any legislative/ statutory support. DB is neither an arbitration tribunal nor a conciliator nor a mediator. The object of having DB is dispute avoidance and dispute adjudication by preventing and/ or resolving disputes as and when they arise during the life cycle of the project and simultaneously ensuring uninterrupted flow of work.
DB has been a hallmark to mitigate risks associated with disputes. It has proved to be an effective alternate offering and a win–win situation for the parties. However, the success of DB depends much on the context of legal framework of the jurisdiction where DB decision will be enforced.
The sanctity of a DB clause in a contract and the requirement of it as a condition precedent to trigger/ resort to arbitration has received recognition in Indian Courts in the recent times as well. [Capacite Infraprojects Ltd. v. T. Bhimjyani Realty Pvt. Ltd. (2023 SCC OnLine Bom 1657); Union Territory of J&K v. S.P. Singla Constructions Pvt. Ltd (2023 SCC OnLine J&K 1343)]
Source: Barandbench
