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  • Writer's pictureMark Moseley

Dispute Resolution and Infrastructure – Is There a Better Way?

Updated: Nov 11, 2020

The nature of a major infrastructure project is such that disputes will, almost inevitably, arise between the parties. Sometimes these will involve disagreements between the owners and the contractor, or between the contractor and subcontractors. In the context of Public-Private Partnerships (PPPs), there is an even greater scope for disputes – especially as between the public party (i.e. the government contracting authority that procures the project) and the private party (i.e. the project company) – given the long-term nature of PPPs, which can stretch over decades.

The Dispute Staircase

Typically, PPP contracts between a government procuring authority and a project company have provisions whereby disputes are dealt with in a tiered matter, escalating up a ‘staircase’ of increasingly formal methods:

  • the first step usually involves some form of ‘good faith negotiations’ between the parties, perhaps using very senior representatives of each party with the ability to agree upon a settlement;

  • if that fails, the PPP contract may call for the appointment of a mediator to act as a neutral facilitator of an amicable resolution;

  • alternatively, the contract may provide for the use of a ‘Dispute Board’ or ‘Dispute Resolution Board’, whereby a panel of external experts (usually three in number) are established at the outset of the contract, with a mandate to resolve conflicts and, ideally, work with the parties to identify potential problems before they become full-scale disputes;

  • in situations where the dispute concerns a specific technical issue, such as a valuation of the costs associated with a construction change order or the achievement of ‘substantial completion’ of construction, the PPP contract may provide for the appointment of an ‘independent expert’, ‘independent certifier’ or ‘referee’, to make an expert determination which is meant to be followed by the parties; and

  • ultimately, if none of these techniques achieve a final resolution of the dispute, the contract will usually call for some form of binding arbitration or litigation in a court – both of which are expensive and time-consuming procedures, which frequently lead to a complete breakdown of what was supposed to be a long-term relationship between the parties to the PPP contract.

A good description of these typical provisions is found in Chapter at the 11 of the World Bank Guidance on PPP Contractual Provisions 2019 Edition, available at:

A Call for Change

As noted, one of the key features of a PPP project is that it normally contemplates a long-term relationship between the public and private parties. Maintaining the health of that relationship is, accordingly, of paramount importance if the project is to be successful.

For this reason, a number of commentators have called for more collaborative approaches to be embodied in PPP contracts, including the Dispute Resolution provisions. In June 2019, FIDIC – the International Federation of Consulting Engineers – issued a Briefing Note on Alternative Dispute Resolution (available at:, which made the point that adversarial dispute resolution processes, such as arbitration and litigation, are “usually counterproductive”, especially in complex projects. In FIDIC’s view, such processes increase legal costs, waste resources, and diminish the ability of the parties to function effectively in the future, leading to outcomes which are “detrimental to the parties, in particular, and to society in general”.

On this basis, the FIDIC Briefing Note suggests “the development of Alternative Dispute Resolution procedures”. But this leaves open the question of what specific procedures are best suited for PPP transactions.

A Possible Way Forward

As noted above, one of the available techniques for the informal resolution of disputes is the use of Dispute Resolution Boards (DRB). These have been employed successfully, for many years, in traditional construction contracts. And, arguably, the concept of Dispute Resolution Boards could, with some modifications, be a particularly effective tool for handling – and avoiding – disputes on PPP projects.

As mentioned, a DRB arrangement involves the parties agreeing, at the outset of a contract (when the relationship should be very positive), to appoint a small panel (normally consisting of three individuals) of external experts to monitor the project and help the parties resolve disputes. Typically, there will be periodic visits by the DRB panel members to the project site during the course of construction, so that the DRB panellists can become familiar with the project and how it is progressing. This is what allows the DRB to be able, in many instances, to help the parties avoid disputes, through the early identification of potential future problems.

One of the main criticisms of the DRB approach is that it is expensive, in that the parties have to bear the costs of the DRB panel members whether or not a dispute actually arises. However, in the context of a major PPP infrastructure project – where the total value of the undertaking may well be hundreds of millions of dollars – such costs are relatively trivial.

However, PPP transactions are, as also mentioned above, distinguished by their duration – they can last 20, 30 or more years. Clearly, under the circumstances, it is not practical to have a single team of DRB panellists in place for the entire project (unless they are appointed at a very young age)! Accordingly, a sensible arrangement might be to have one team appointed to cover the initial construction period, with subsequent teams in place for five-year terms during the operation and handback phases – with some overlap in the DRB panel membership, so as to ensure continuity.

It should be a contractual requirement that all decisions of the DRB be will be accepted by the parties as final and binding – except in instances of fraud or similarly exceptional circumstances. In other words, a final decision by a DRB panel should not be treated merely as a ‘way station’ en route to subsequent arbitration or court proceedings.

A great deal of additional useful information concerning the operation of Dispute Resolution Boards can be found at the website of the Dispute Resolution Board Foundation:

A Tango – Not a Boxing Match

It has said that a successful PPPs is like an extended tango. Definitely, it should not be a boxing match. If we can use Dispute Resolution Boards to help maintain the harmony, the dance can be a great experience for both of the parties – and also for the audience who will be able to enjoy what is produced.


This blog is in a series that appears approximately every three or four weeks on this website. It has been written by Mark Moseley, the Principal of Moseley Infrastructure Advisory Services ( Unless otherwise noted, the copyright in this blog is owned by Moseley Infrastructure Advisory Services. The blog is made available for use under a Creative Commons Attribution 3.0 Licence, whereby users are free to copy and redistribute the contents of the blog, if they give credit to the author, and clearly indicate any changes that have been made.

Photo credit: Sides Imagery, available on Pexels

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