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International Construction Law Review

SUBCLAUSE 20.5 OF THE FIDIC CONTRACTS AND AMICABLE DISPUTE RESOLUTION (“ADR”)1

DALE S BRACKIN

Partner, Clayton Utz, Brisbane

1. Introduction

Subclause 20.5 of the FIDIC Conditions of Contract2 provides for a 56-day period for the amicable settlement of disputes (after either party has given a notice of dissatisfaction with a decision of a Dispute Adjudication Board) before the commencement of arbitration.
This paper considers:
  • (i) why the FIDIC Conditions of Contract includes such a requirement;
  • (ii) what the parties can do within the 56-day period; and
  • (iii) what options are available to the parties to settle disputes that are not settled by a Dispute Adjudication Board.

2. Antecedent provisions

A provision for amicable settlement of disputes first appeared in the FIDIC Conditions in 1987, in the fourth edition of the old “Red Book”. At that time, the 56-day period for amicable settlement provided for in subclause 67.2 ran from when a notice of intention to commence arbitration wasgiven in accordance with subclause 67.1.
After some editorial amendments were made to the clause in 1992, a supplement was issued in 1996 to provide for the introduction of a Dispute Adjudication Board, and for the period for amicable settlement to follow a notice of dissatisfaction with a decision of the Board. This arrangement was ultimately incorporated into the 1999 FIDIC Conditions.

3. The provision

Subclause 20.5 currently provides:

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