The Construction Dispute Board Rules of the Beijing Arbitration Commission comes into effect since March 1, 2009

　　In order to further apply and promote Dispute Board in the field of construction projects, resolve disputes in a timely manner, ensure smooth work of construction projects, the BAC has started drafting of The Construction Dispute Board Rules of the Beijing Arbitration Commission (hereinafter referred to as “DB Rules”) since 2008. During that period, DB Rules has been gradually modified and refined in line with the suggestions from many seminars and workshops in which experts and competent authorities presented opinions. The final version of DB Rules was reviewed and approved on the Fourth Meeting of the Fifth Session of Beijing Arbitration Commission on January 20, 2009, which comes into effect since March 1, 2009.

　　Dispute Board in construction projects (hereinafter referred to as “DB”) refers to such dispute resolution mode that the independent DB experts, who are selected by the parties concerned, can put forward suggestions or make decisions, whenever the disputes occur at the beginning or in ongoing process. DB is a real-time dispute settlement method featuring “exquisite segmentation” so as to promptly solve disputes, avoid delay, loss and waste in the construction projects due to expanded disputes, and ensure the success of projects.

　　 In 1975, Dispute Review Board was applied in the Eisenhower Tunnel Project in Colorado, USA and achieved a great success. Due to such advantages as professionalism, simplicity, rapidness and low cost, the mode of Dispute Review Board was popularized gradually. Since January 1995, the World Bank has started to set compulsory requirement in its tendering documents that all the projects supported with the loans from World Bank must adopt the mode of Dispute Adjudication Board. In the same year, Fédération Internationale Des Ingénieurs-Conseils (hereinafter referred to as “FIDIC”) put forward the concept of “Dispute Adjudication Board” in Orange Book (i.e., Design-Build and Conditions of Contract for EPC Turkey Project) and introduced “Dispute Adjudication Board” mechanism successively into the conditions of other types of contracts. On September 1, 2004, the International Chamber of Commerce (ICC) issued Dispute Board Rules. Some of Chinese projects with loans from World Bank, e.g., Xiao Langdi Water Conservancy Project on Yellow River, ErTan Hydropower Station, WanJiaZhai Water Conservancy Project, etc, which all adopted Dispute Board and saw prefect effects. On November 1, 2007, nine ministries, including National Development and Reform Commission, Ministry of Construction, Ministry of Information Industry, jointly made and issued Standard Bidding Document for Construction Projects of the People’s Republic of China(hereinafter referred to as “Standard document”). Among which, the system of Dispute Board has been introduced into “General Contract Terms” (hereinafter referred to as “standard contract”), which attempts to apply the mode of Dispute Board in the state-invested construction projects. In order to further apply and promote Dispute Board in the field of construction projects, resolve disputes in a timely manner, ensure smooth work of construction projects, the BAC has developed The Construction Dispute Board Rules of the Beijing Arbitration Commission with reference for standard contracts, ICC Dispute Board Rules as well as relevant regulations for FIDIC’s Contract for Plant and Design-Build and Conditions of Contract for EPC Project.

　　 The formulation of DB Rules is another attempt searching for a multi-dimensional dispute settlement systemafter the enforcement of the BAC Mediation Rules since April 1, 2008. In line with the international experience, Dispute Board mainly targets at large-scale construction projects, which is also an area with large demands, many opportunities and fast development. The BAC has made great efforts to actively explore and research in this field. The BAC not only wishes to broaden the development in the future, but also helps healthy development of construction industry. By the end of 2008, the BAC had already accepted 2826 cases of all kinds of construction projects, with the disputed amount totaling 25.58 billion yuan. In the field of resolving construction project disputes, the BAC has rich experience and trained a large number of excellent arbitration experts. The BAC’s learning and research in the field of construction projects has kept on top of the time and kept path with practice. In May 2004, the BAC and FIDIC-TsingHua University–Training Center of China National Association of Engineering Consultants (FTCTC) jointly held Resolution and Arbitration of Contract Disputes in International Projects Seminar, which introduced international system of Dispute Board to the construction companies. At the beginning of 2007, after learning that the nine ministries were drafting standard document, the BAC started to organize arbitrators, construction project experts to study and draft DB rules. At the beginning of 2008, the BAC drafted the enquiry-version of DB rules, and solicited suggestions from all experts, and then altered such version several times. At the same time, in order to implement DB Rules, the BAC has made regulations on DB experts, name list, agreements and related forms. The BAC also cooperated with the Straus Institute for Dispute Resolution, Law School of Pepperdine University so as to train the experts in one phase and the mediators in two phases. A total of over 120 arbitrators and construction experts took part in the training. In the light of the knowledge, experience and capacity for every DB expert, the BAC Meeting has made decision upon discussion to employ the recommended fifty experts to be Dispute Board Experts of the BAC.

　　 The drafting of DB Rule follows the historical development trend; gathers the wisdom from experts; embodies the spirit of the BAC, i.e., enterprising, opening and innovating, as well as the social responsibilities to protect legal rights of the parties concerned and promote the harmonious development of the whole society. During the period of developing DB Rules, we lacked the practical experience in China. On this point, DB Rules should be tested by the practice. The BAC will modify and improve them in a timely manner whenever problems occur.

Attachments:

The Construction Dispute Board Rules of the Beijing Arbitration Commission and Explanations for Drafting

Construction Dispute Board Fee Schedule of the the BAC

The the BAC Ethical Standards for Construction Dispute Board Experts and Explanations for Drafting

Editor: Jiang Lili