DAB decision, notice of dissatisfaction and an undisclosed consultancy

Under the FIDIC-style regime, a DAB decision is binding on the parties even if one party serves a Notice of Dissatisfaction. The NOD does not suspend the obligation to give effect to the decision; it triggers the next step, which is arbitration if the dispute is not settled. The employer's refusal to pay within 28 days is therefore a breach of the contractual obligation to comply. The contractor can enforce the decision summarily-by arbitration to compel payment, or by court proceedings where the decision is treated as a contractual obligation-subject to any stay. The NOD matters in two ways: it prevents the decision from becoming final and binding, and it starts the clock for commencing arbitration. If the employer serves a NOD but fails to commence arbitration within the contractual period (often 28 days after the NOD), the decision may become final and binding. The contractor should check that period before assuming the decision is only interim. The contractor should not suspend work unilaterally unless the contract expressly permits suspension for non-payment and the required notices are given; otherwise it risks breaching the contract.

DAB members owe duties of independence and impartiality and must disclose relationships that may give rise to justifiable doubts. A consultancy to the contractor's parent 18 months earlier is disclosable and may be material, depending on its scope, value and connection to the project. The test is whether a fair-minded and informed observer would conclude that there was a real possibility of bias, not whether the member was actually biased. Non-disclosure is a serious matter, but it does not automatically void the decision. The employer must act promptly after learning of the relationship; delay may amount to waiver. The employer can raise the point in the arbitration or in enforcement proceedings, but courts are generally reluctant to reopen a DAB decision on the merits. If the relationship is sufficiently serious, the decision may be unenforceable for breach of natural justice or impartiality. The contractor may argue that the member's role was unrelated, that the decision was unanimous, and that the employer participated fully. The employer's strongest point is the failure to disclose, not the existence of the consultancy itself.

First, preserve the 28-day payment claim: write to the employer demanding payment of USD 4.6 million within the contractual period, attaching the DAB decision and reserving all rights. Second, do not suspend work without checking the contract's suspension clause and giving any required notice; a wrongful suspension could expose the contractor to termination and damages. Third, monitor the employer's NOD. If the employer does not commence arbitration within the contractual period after the NOD, assert that the DAB decision has become final and binding. If the employer does commence arbitration, consider a counterclaim or defence that the decision remains binding pending the award. Fourth, prepare a summary enforcement application or arbitration demand for the unpaid amount, and consider security. Fifth, assess the non-disclosure issue: the contractor should not rely on the favourable decision without addressing it, because the employer will use it to resist enforcement. Take advice on whether to challenge the member or to support the decision's validity. Finally, document all notices and keep the 30-day timetable under review.