🔍 EPC Dispute under the FIDIC Silver Book
In a notable arbitration dispute under the FIDIC Silver Book, the claimants initiated proceedings at VIAC without completing the mandatory dispute resolution steps: Dispute Adjudication Board (DAB) and amicable settlement. The respondent argued that this omission violated the dispute resolution clause, while the claimants highlighted the respondent’s letter dated May 29, 2019, which stated: “The parties are awaiting VIAC’s decision.” This, according to the claimants, reflected the respondent’s intent to arbitrate.

⚖️ Respondent’s Position
The respondent asserted that:
1. Non-compliance with procedural prerequisites:
* The claimants bypassed the agreed DAB and amicable settlement stages, which were mandatory under the contract.
* The arbitral tribunal lacked jurisdiction because these steps were conditions precedent to arbitration.
2. Ambiguity in the arbitration agreement:
* The respondent contended that the agreement failed to specify a particular arbitral institution, making VIAC’s jurisdiction questionable.
3. Good faith negotiation required:
* The respondent insisted that bypassing the DAB and settlement process undermined the principle of good faith inherent in the dispute resolution process.

⚖️ The Court’s View
The Hanoi People’s Court ruled in favor of the claimants, holding that:
* The arbitration agreement was valid, enforceable, and designated VIAC as the arbitral institution.
* Given the extensive, unresolved correspondence between the parties from 2016 to 2019, returning to the DAB and settlement stages would be impractical and merely delay the resolution.
* Skipping these steps did not contravene the parties’ agreement or render the arbitration invalid.

🏛️ Final Decision
The Court upheld the jurisdiction of the VIAC Arbitral Tribunal, affirming that the claimants were entitled to initiate arbitration directly at VIAC.

💡 Insights and Reflections
This case underscores the critical importance of unambiguous dispute resolution clauses to avoid jurisdictional challenges. Should the FIDIC Silver Book be re-evaluated to streamline dispute resolution mechanisms?
One potential improvement is the integration of a standing Dispute Avoidance and Adjudication Board (DAAB), which would actively monitor and address disputes as they arise. Such mechanisms could foster trust and encourage goodwill from the outset, reducing the need for adversarial proceedings. However, their practical implementation and alignment with the parties’ intent for early and efficient dispute resolution require careful consideration.

Link PDF: https://drive.google.com/file/QD02

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