The Engineer’s determination arrives on a Thursday. It rejects most of a claim the Contractor has spent five months building. The commercial manager is on leave, the project director wants to protect the relationship, and nobody puts the 28 days in the diary.
On day 29 the determination is final and binding. The merits of the claim no longer matter.
That is how many infrastructure disputes are really settled: not by a tribunal weighing evidence, but by a missed step on the procedural ladder. The FIDIC 2017 Red, Yellow and Silver Books made that ladder clearer than the 1999 editions did. They also made it less forgiving. This article walks through each rung, the time bar attached to it, and what changes when the project is financed by a multilateral development bank (MDB).
Claims and Disputes are now different things
The 2017 suite separates the two. Clause 20 covers Claims, meaning requests for an entitlement under the Contract, and applies the same rules to Employer and Contractor. Clause 21 covers Disputes, which arise only once a Claim has been rejected or left unanswered and the process has moved on. The structural split is deliberate: a Claim is something to be administered, a Dispute is something to be decided.
The bridge between them is the Engineer’s agreement or determination under Sub-Clause 3.7. Under Sub-Clause 3.7.4 a determination binds both Parties, but it remains open to challenge through a Notice of Dissatisfaction (NOD). If no NOD is given within 28 days, the agreement or determination, or any part of it not covered by an NOD, becomes final and conclusive.
The ladder, step by step
| Step | Sub-Clause | Time limit | If you miss it |
|---|---|---|---|
| Notice of Claim | 20.2.1 | 28 days after awareness of the event | Claim at risk of being time-barred |
| Fully detailed Claim | 20.2.4 | 84 days after awareness (or as agreed) | Claim liable to be barred if the legal basis is not stated |
| Engineer’s consultation and determination | 3.7 | 42 days to agree, then 42 days to determine | For a Claim, deemed rejection (Sub-Clause 3.7.3) |
| NOD against the determination | 3.7.5 | 28 days after the determination | Determination becomes final and binding |
| Reference to the DAAB | 21.4.1 | 42 days after the NOD | NOD lapses; determination becomes final and binding |
| DAAB decision | 21.4.3 | 84 days after the reference (or as agreed) | Binding immediately; comply promptly |
| NOD against the DAAB decision | 21.4.4 | 28 days after the decision | Decision becomes final and binding |
| Amicable settlement | 21.5 | 28 days after the NOD | Arbitration may start on or after day 28 |
| Arbitration | 21.6 | ICC Rules unless agreed otherwise | Final resolution |
Two changes from 1999 deserve attention. The amicable settlement window has been cut from 56 days to 28. And the reference to the DAAB now carries its own 42-day time bar. Under the 1999 forms a dispute could be referred at any time after the NOD; under 2017, a party that waits too long loses the NOD and is left with the Engineer’s determination as the final and binding outcome.
Four traps that decide cases before the merits
- The silent 28 days. Parties often treat a determination as an opening offer and keep negotiating. Negotiation does not stop the clock. If talks are continuing, serve the NOD anyway and keep talking.
- The forgotten 42 days. An NOD on its own achieves nothing if the Dispute is not referred to the DAAB in time. This is the newest time bar in the chain and the one site teams know least.
- The narrow NOD. A party can give an NOD on part of a DAAB decision. That part is treated as severable, and the rest becomes final and binding. An NOD drafted around the headline sum can quietly concede the EOT, the interest or the valuation method.
- Refusing to pay a decision you dislike. A DAAB decision binds the Parties, who must comply promptly whether or not an NOD is given. Under Sub-Clause 21.7 the other side can take the failure to comply straight to arbitration, without a further DAAB reference or amicable settlement period.
The fourth point has a history. Under the 1999 wording it was unclear how to enforce a decision that was binding but not yet final. In PT Perusahaan Gas Negara (Persero) v CRW Joint Operation [2015] SGCA 30, a split Singapore Court of Appeal held that the paying party’s failure to comply could itself go directly to arbitration. The 2017 drafting writes that position into the contract. Whether a resulting award is enforced quickly still depends on the seat and on local law.
The DAAB only works if it exists
FIDIC 2017 makes the DAAB a standing board across all three main books. Unless the Contract states otherwise, the Parties must appoint it within 28 days after the Contractor receives the Letter of Acceptance, and FIDIC is the default appointing official if they fail to agree.
The avoidance role under Sub-Clause 21.3 is where a standing board earns its fees. If both Parties agree, they can jointly ask the DAAB for informal assistance on an issue before it becomes a Dispute. The process is voluntary, and neither the Parties nor the DAAB are bound by what is said. In practice, as the Chartered Institute of Arbitrators has observed, a board may find it hard to depart from its earlier views without new evidence. That is a reason to prepare for an informal session as seriously as for a referral.
A DAAB that is named in the Contract Data but never constituted gives neither party this benefit. Where no DAAB is in place, Sub-Clause 21.8 allows the Dispute to go to arbitration, which is usually the slowest and most expensive outcome available.
What changes on MDB-financed projects
The World Bank’s Standard Procurement Documents for works using FIDIC General Conditions treat the DAAB as standard. The Bank requires three members for contracts estimated above US$50 million, allows one or three between US$20 million and US$50 million, and recommends a sole member below US$20 million.
The Bank has also given the DAAB a role beyond time and money. On projects assessed as high-risk for sexual exploitation, abuse and harassment, the DAAB decides whether the Contractor has complied with its SEA/SH contractual obligations. The Borrower notifies the Bank of the decision, and a finding of non-compliance can lead to a two-year disqualification from Bank-financed contracts unless an emergency arbitrator rules for the Contractor. For a contractor, that is a DAAB referral with consequences well beyond the project.
Other MDBs and their borrowers amend Clause 21 in their own ways, including the seat, the rules and the appointing authority. Many projects in Türkiye, Central Asia and the Middle East are governed by civil law, where the treatment of time bars and the enforcement of DAAB decisions and arbitral awards can differ from the common-law cases most commentary relies on. Check those points with local counsel before relying on them.
How long the ladder really is
Add up the default periods, assuming every party uses its full allowance: 84 days for the detailed Claim, 84 for the Engineer, 28 for the NOD, 42 to refer, 84 for the DAAB, 28 for the second NOD and 28 for amicable settlement. On my arithmetic that is about 378 days, a little over a year from the event to the earliest Request for Arbitration. Arbitration then starts its own clock.
Industry data points the same way. Arcadis’s 2025 disputes report put the average North American construction dispute at around 12.5 months and US$60.1 million, and listed failing to understand or comply with contractual obligations among the most common causes. Most disputes are lost or won in contract administration long before anyone reaches a hearing.
What contractors should do
- Run a time-bar register. Log every determination, DAAB decision and NOD with its deadline, owner and escalation date. Review it weekly, not monthly.
- Pre-approve the NOD decision. Agree in advance who can sign an NOD and on what threshold, so a holiday or a board meeting cannot cost you a claim.
- Draft every NOD wide. Identify each element of the determination or decision you dispute, including time, quantum, interest and method, and state the reasons.
- Push for a constituted DAAB. If the Employer delays the appointment, use Sub-Clause 21.2 rather than waiting for the first dispute.
- Comply, then challenge. Pay or perform a DAAB decision you disagree with and pursue it through the NOD route. Non-compliance hands the other side a fast-track remedy and weakens your position.
What Employers and Engineers should do
- Appoint the DAAB at the start. Budget its retainer as a project cost. The fees are small compared with a single arbitration.
- Give reasoned determinations on time. A determination that is late or thinly reasoned invites an NOD and rarely survives a DAAB review.
- Use Sub-Clause 21.3 early. Bring recurring disagreements, such as measurement rules or programme acceptance, to the DAAB informally before positions harden.
- Do not use time bars as a strategy. Relying on a missed deadline may win the point, but on MDB-financed projects it can damage the relationship with the financier and the contractor market you will need for the next package.
How to measure it
- Time-bar breaches in the register (target: zero).
- Days from Letter of Acceptance to a signed DAAB Agreement (target: within the contractual period).
- Share of determinations issued within the 42-day limit.
- Number of issues taken to informal DAAB assistance compared with formal referrals.
- Percentage of DAAB decisions complied with within 28 days.
The bottom line
Dispute settlement under FIDIC 2017 is a sequence of short, unforgiving deadlines followed by one long, expensive process. Parties that keep a standing DAAB, use it informally and treat every 28-day and 42-day limit as fixed tend to settle on the merits. Parties that do not often lose on procedure, and only find out a year later.
If you are facing a determination, preparing a DAAB referral or setting up dispute procedures for a new contract and want an independent view, get in touch at amirmehdi@amasghari.com.
This article is general information, not legal advice. Dispute procedures and time limits depend on the Particular Conditions, the financier’s documents and the governing law of each contract. Check your contract and take specific advice before acting.
Sources
- Gowling WLG, A guide to dispute resolution under FIDIC (2024)
- CMS, New FIDIC Second Editions: revamped claims and dispute resolution provisions
- Fenwick Elliott, The 2017 FIDIC dispute resolution procedure: Part 1
- Pinsent Masons Out-Law, FIDIC Red Book: enforcing dispute adjudication board decisions
- Shoosmiths via Mondaq, Dispute Resolution Under FIDIC 2017 (January 2018)
- Fenwick Elliott, The Court of Appeal in Persero II
- CIArb, Dispute Avoidance: FIDIC 2017 (July 2018)
- World Bank, Strengthening Prevention of GBV: Contractor Accountability and Disqualification
- Aceris Law, FIDIC Dispute Resolution Mechanism
- Building, All change in the FIDIC forms
- ENR, Zero Disputes and Stronger Relationships (citing the Arcadis 2025 Construction Disputes Report)