Adjudication (Dispute Board) Rules: Public Consultations

Adolph von Menzel

Counselor reads falsified papers, 1887

Adjudication (Dispute Board) Rules: Public Consultations

We are delighted to present a draft of the Adjudication (Dispute Board) Rules. As part of our commitment to ensuring these rules are comprehensive and effective, we invite you to participate in the Public Consultations. We will highly and wholeheartedly appreciate your involvement and feedback.

For clarity, the terms “Adjudication” and “Dispute Board procedure” in the Rules are interchangeable, as the actions taken within these procedures and the consequences thereof are substantively similar.

Under these Rules, Adjudication is a method of preventing and resolving disagreements and disputes, where one or several experts (Dispute Board) accompany the progress of the entire contract or project and, at the request of the Parties or on their own initiative, deal with the issues related to it. Since the Dispute Board is usually established at the beginning of the project, the adjudication process allows the Parties to prevent potential conflicts early on. The Dispute Board then monitors the project and identifies potential problems, assisting the Parties to avoid costs associated with arbitration or litigation. If, after all, the dispute arises, the Dispute Board considers it in a timely manner, already having knowledge about Parties’ relationships, and issues a Conclusion that is binding on the Parties, similar to a contractual obligation, the terms of which are defined by a third party – the Dispute Board. Any Party may disagree with the Conclusion in due course, and the dispute may be considered de novo in arbitration or litigation. In some instances, an unsatisfied Party may be bound to comply with the Conclusion to ensure the uninterrupted course of the project.  If neither Party objects to the Conclusion, any dispute related to its non-compliance may be referred to arbitration or court.

If there is no need for a permanent Dispute Board, then Ad Hoc Dispute Board, which is established solely for the resolution of a specific dispute and may consist of exclusively technical experts (if the Parties agree), may be more preferable. The purpose of creating such Dispute Board is quick and efficient resolution of disagreements by experts trusted by all the Parties. It is worth mentioning that UNCITRAL Working Group II emphasized the prospects of this dispute resolution method by developing a model clause on adjudication. As the RAC is an Observer of the Working Group II, we closely followed the deliberations on this issue to offer regulations that are consistent with the world’s finest standards.

RAC Adjudication (Dispute Board) Rules aim to establish a clear framework for the creation and operation of Dispute Boards. The RAC will provide organisational support for adjudication carried out by the permanent Dispute Boards and Ad Hoc Dispute Boards in accordance with the RAC Adjudication Rules and the agreement of the Parties. The RAC may also assist Parties in adjudication even if they agree that other set of Adjudication (Dispute Board) Rules is applicable. In such a case, the Parties should submit a request to the RAC identifying the functions they would like the RAC to perform.

Generally, Adjudication can be relevant both for long-term and technically complex projects and for projects that need to be implemented in a short time (for example, startups), where the Parties do not want any delays in the implementation of the project and seek to avoid lengthy litigation or arbitration proceedings. We see that Adjudication can be a solution to many problems that businesses face, and we will be glad if you share your opinion on this matter.

With that in mind, we publish the draft of the Adjudication (Dispute Board) Rules and launch the Public Consultations. You can send your observations in any form convenient for you to the email address rules@centerarbitr.ru. We will keep confidential all the observations and suggestions received from you.

You can find the Adjudication (Dispute Board) Rules and Recommended Clauses below.