{"id":1482,"date":"2014-09-12T17:30:35","date_gmt":"2014-09-12T21:30:35","guid":{"rendered":"http:\/\/businessconflictmanagement.com\/blog\/?p=1482"},"modified":"2014-09-12T17:30:35","modified_gmt":"2014-09-12T21:30:35","slug":"project-finance-and-adr-the-dispute-review-board","status":"publish","type":"post","link":"https:\/\/www.businessconflictmanagement.com\/blog\/2014\/09\/project-finance-and-adr-the-dispute-review-board\/","title":{"rendered":"Project Finance and ADR: The Dispute Review Board"},"content":{"rendered":"

The second offering of the three-part Symposium on ADR and Commercial Finance at the ABA Business Law Section Annual Meeting addressed disputes arising in long-term, high-budget, tightly-scheduled, deeply interdependent projects — like building an airport — where “divorce is not an option.” \u00a0According to Deborah Mastin<\/a>, the issue is how clients manage unplanned adverse events that occur during projects, mitigate their impact and resolve the issues they present.<\/p>\n

Was the unplanned event discussed with experienced people prior to the project\u2019s beginning?\u00a0 Was there an agreement on how unanticipated events will be handled with a minimum of time?\u00a0 Delay in a construction project like an airport can cost hundreds of thousands of dollars a day, so the response to problems that threaten delay in the work must be timely and the solution must be accepted by everyone.\u00a0<\/p>\n

The Dispute Board is the appropriate engine to facilitate both dispute avoidance and dispute mitigation.\u00a0 Designees to serve on a Dispute Board must know both the industry and the particular project.\u00a0 Lawyers bring less to the table than industry veterans to.\u00a0 So well-recognized are the benefits of a Board that some players won\u2019t bid on a project that doesn’t have a DRB.\u00a0 World Bank has required a DRB since 1995.<\/p>\n

Success depends upon the people and the process.\u00a0 People need to be neutral trained, available, authoritative, and respected.\u00a0 The heart of the process is two contracts \u2013 one between parties and the other between parties and neutrals.\u00a0 The first sets forth both formal and informal expectations.\u00a0 In regular informal periodic meetings, all discussions should be considered confidential settlement negotiations, with no minutes taken, in order to allow frank discussion of problems.\u00a0 The Board facilitates a team approach to addressing the unexpected occurrence.\u00a0 The team meets with each other weekly, and meets with the DRB monthly.<\/p>\n

Members of the team buy into a solution quickly; the added cost of the cure usually is substantially less than the added cost of both cure and argument and delay.\u00a0 In its meetings, the Board is free to raise issues that the parties haven\u2019t raised, if addressing them will save money.\u00a0 The meetings are not restricted to contractually bound parties: Lenders, engineers, tenants, and other stakeholders should be invited to participate in meetings because they are impacted by delay and added costs that may flow from the problem.<\/p>\n

Mastin emphasized that this is not a claims adjudication process; it\u2019s a way for critical players in the project to get informal guidance — or formal decisions \u2013 needed to keep the project on track.\u00a0 The Board can also conduct formal arbitrations, but does so without sworn presentations or cross examinations, and seldom attorney engagement.\u00a0 A binding or nonbinding decision may ensue, depending on what the parties seek. DRBs present a project management process, not an adjudicative process.<\/p>\n

The tantalizing question was then raised by Tom Walsh, of Brown & Walsh in Haverhill, MA:\u00a0 May this approach have application for commercial finance, including real estate finance?\u00a0 Indeed, is this perhaps a model for managing disputes that arise from all sorts of interdependent, long-term enterprises subject to project management, in which all parties will do well as long as the project is not diverted by prolonged adjudication of unanticipated contingencies?<\/p>\n","protected":false},"excerpt":{"rendered":"

Dispute Boards facilitate the avoidance, recognition and early resolution of disputes that pose costly delays in sophisticated long-term projects<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,24],"tags":[8,10,38,23],"class_list":["post-1482","post","type-post","status-publish","format-standard","hentry","category-conflict-resolution","category-systems-design","tag-adr","tag-conflict-management","tag-lawyers","tag-systems-design"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/1482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/comments?post=1482"}],"version-history":[{"count":0,"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/posts\/1482\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/media?parent=1482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/categories?post=1482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessconflictmanagement.com\/blog\/wp-json\/wp\/v2\/tags?post=1482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}