Transport Infrastructure Contract (TIC) - Dispute Resolution Board (DRB) Roles and Responsibilities

Overview of the TIC Dispute Resolution Process

Issues Resolution Advisors (IRAs) and DRB Members play an important role in resolving disputes under the TIC. 

As shown above, by the time a dispute is referred to a DRB, it has usually been the subject of extensive discussions between the Principal, Contractor and the Administrator. The parties will refer a dispute to the DRB because they seek independent and timely assistance to avoid or resolve such a dispute.

This page summarises key features of the DRB process. Please refer to the IRA page for more information on the IRA process. Capitalised terms, which are not otherwise defined, have the meaning given in the TIC General Conditions of Contract (General Conditions) and the Dispute Resolution Board Agreement (DRB Agreement), current at the time of publication.

Overview of the DRB procedure

The above flowchart summarises the essential process in Clause 15 of the DRB Agreement. The timing between the steps described is to be inserted by the parties before executing each DRB Agreement. The DRB process is expected to be conducted efficiently (as confirmed by the template DRB Agreement’s reference to ‘business days’ and ‘weeks’ for the performance of the steps that it sets out, and its statement that the parties should ‘endeavour to meet or better’ that indicative timetable). The DRB’s recommendation is expected to be provided within a reasonable time of referral of a dispute to the DRB, to allow the parties either to accept it (resolving the dispute) or reject it and move to the next stage of the dispute resolution process.

Under Clauses 48.5 and 48.6 of the General Conditions, the DRB comprises 3 Members:

1. one nominated by the Principal
2. one nominated by the Contractor, and
3. one nominated by the 2 Members above and approved by the Principal and the Contractor (or if no agreement can be reached, by the Resolution Institute).

Each DRB Member must act neutrally and impartially in accordance with the Contract and the DRB Agreement (Clause 48.4 of the General Conditions and Clauses 3.1 to 3.4 of the DRB Agreement).

Eligibility

Under Clause 48.4(c) of the General Conditions, a person is prohibited from being appointed as a DRB Member if that person (which includes the person’s employer: see Clause 48.4(b) of the General Conditions and Clause 7 of the DRB Agreement):

1. has an ownership interest in any entity involved in the Contract, or a financial interest in the Work Under the Contract except for payment for services on the DRB
2. was previously employed by, or had financial ties to, any party involved in the Work Under the Contract within a period of 2 years prior to award of the Contract, except for fee-based consulting services on other projects
3. has had a professional or personal relationship with any key member of any entity involved in the Work Under the Contract which, in the opinion of the Principal or Contractor, could suggest partiality
4. has had prior involvement in the Work Under the Contract of a nature which, in the opinion of either party, could suggest partiality
5. is employed or engaged by any entity involved in the Work Under the Contract unless the written approval of both parties is given, or
6. discusses during the term of the Contract employment or engagement by any entity involved in the Work Under the Contract after the Work Under the Contract is completed.

Further, to be eligible, a DRB Member must be experienced in works similar to the Works, interpretation of Contract documents and resolution of construction disputes (see Clause 48.4(a) of the General Conditions).

Duty of Disclosure

A proposed DRB Member is required to provide a Disclosure Statement. The Disclosure Statement must:

1. contain a resume of experience
2. contain a declaration:

1. describing all past, present, anticipated and planned future relationships, including indirect relationships through the nominated DRB Member’s primary or full-time employer, to the project and with all parties involved in the Contract, including Subcontractors, design professionals and consultants, and
2. disclosing close professional or personal relationships with all key members of parties to the project.

DRB Process

The DRB’s role is to provide independent assistance in technical and administration aspects of the Contract in order to assist the Principal and the Contractor in firstly attempting to avoid or prevent and, if unable to avoid or prevent, to determine disputes under the Contract and the DRB Agreement in a timely manner (see Section 10 of the Principles of Process in the DRB Agreement).

Clause 48.8 of the General Conditions requires the parties to hold the first DRB meeting at a place nominated by the Principal. During the meeting, the parties are to confirm the Principles of Process and other procedures required by the DRB and the parties to consider the dispute(s), including any Site visits.

Clause 48.9 of the General Conditions requires the DRB to consider the dispute(s) referred to it in accordance with the Principles of Process included in the DRB Agreement. The Principles of Process are intended to be broad to reflect the parties’ ability to tailor the process to their needs in consultation with the DRB. 

Clause 48.8 of the General Conditions acknowledges that the DRB procedures must be adaptable to changing situations and modified procedures may be required during the course of the process.

Form of recommendation

Clause 48.9 of the General Conditions requires the DRB to provide its recommendation to the parties in writing. It is to contain the reasons for the recommendation.  Clause 48.10 of the General Conditions provides that a recommendation includes a recommendation of at least 2 of the DRB Members. Where the recommendation is not unanimous, it shall include the recommendations of the majority and the minority of the DRB Members.

The Principles of Process in the DRB Agreement anticipate that the parties may request the DRB for an ‘Advisory Opinion’ throughout the course of a dispute to assist them in negotiations. The Advisory Opinion is not a recommendation.

It is expected that the DRB’s recommendation will take the form of a written report which explains in reasonable detail the DRB’s reasoning in a manner that enables the parties to understand how the DRB arrived at its conclusions.

The contractual framework is expected to form the primary basis for the DRB’s report containing its recommendation. The DRB may consider the parties’ submissions, discussions during Site visits (if any) and other documents provided to it by the parties to inform its recommendation(s) as to contractual entitlement to claims. Any other calculations, assumptions, documents or reasoning, including expert opinions obtained in accordance with the Principles of Process, should be referred to in the recommendation.

Case Studies

The below case studies have been anonymised (with certain details changed) and are provided for illustrative purposes.

Case Study 1 – Disputes not avoided

Throughout the course of the Project, the DRB was involved in meetings for the purpose of its dispute avoidance function.

Despite the DRB’s involvement, a multitude of disputes arose between the parties over a period of time and the DRB was unable to establish a process to resolve the disputes. As the DRB was unable to assist the parties to resolve the disputes, the parties elected to change contract models during the Project.

It is critical that DRBs proactively work with the parties to avoid disputes or where disputes cannot be avoided, resolve them in a timely manner.

Case Study 2 – Dispute not decided in accordance with Contract

The Contractor advanced global claims when not permitted to do so under the contract (that is, the Contractor cited various clauses and a significant quantum of loss but did not attribute specific parts of its quantum to particular heads of claim or otherwise provide substantiation of cause and effect). The DRB proceeded to determine the Contractor’s claim, but its ultimate findings were difficult to understand because of the global nature of the underlying claim.

The DRB’s role is to work with the parties so that disputes can be avoided or determined with clarity by the DRB.

Case Study 3 – Dispute not decided in a timely manner

A DRB was appointed mid-Project to assist the parties with escalating claims made by the Contractor for latent conditions.

The DRB did not agree to a process to resolve the whole of the dispute at the outset but instead elected to determine entitlement issues before it would separately determine quantum (if required) on the basis that this would be more efficient.  The DRB did not deliver its report on entitlement until one year after the dispute was referred to it.

Disputes are expected to be determined within a reasonable time. While what is reasonable will depend on the dispute, DRBs are expected to offer an efficient alternative to arbitration or litigation.

Who to contact

For further information on this fact sheet, please contact [email protected].