Under the FIDIC Red Book 2017, Clause 21 establishes a standing Dispute Avoidance/Adjudication Board (DAAB) as a default requirement. This is a major evolution from the 1999 edition, where a Dispute Adjudication Board (DAB) could be ad hoc. Therefore, Option C is correct, as the General Conditions clearly provide for a standing DAAB appointed at the outset of the Contract.
Option D is also correct. The appointment procedure for DAAB members requires mutual agreement between the Parties. Even if one Party nominates a member, that nomination must be accepted by the other Party to ensure neutrality, independence, and confidence in the dispute resolution process.
Option A is incorrect because amicable settlement (Clause 21.5) is required after a DAAB decision and before arbitration, not before referring a matter to the DAAB.
Option B is incorrect because DAAB decisions are binding immediately (whether or not final), unless and until revised by arbitration. They are not dependent on prior confirmation by arbitration to be binding.
Option E is incorrect because failure to give a Notice of Dissatisfaction (NoD) relates to a DAAB decision becoming final and binding—not an Engineer’s determination. The statement incorrectly mixes procedural steps.
These provisions reflect FIDIC’s structured multi-tier dispute resolution system, promoting early resolution through DAAB before escalation to arbitration.
