Dispute review boards in the context of Malaysian construction industry

Abstract

Every project may bound to have disagreement. The construction industry has been on the forefront of the alternative dispute resolution movement. The current trend is to look for methods of resolving disputes other than traditional processes (such as litigation, arbitration and mediation), which typically begin after the conflict has escalated and the parties' positions have hardened. One of these methods is Dispute Review Board (DRB). DRB and Dispute Adjudication Boards (DAB) have distinct advantages when properly structured and mandated. The DRB is most popular alternative dispute resolution (ADR) mechanism in US therefore the operational basis of the DRB adheres to the legislation and operation in US. Despite its success in global application, DRB is not much heard of in Malaysia. Since DRB is new in Malaysia, therefore the aim of the research is to determine the legislation of DRB operations in order to possibility of implementing DRB in Malaysia construction industry. This research was based on the existing DRB models such as World Bank, The American Arbitration Association (AAA), FIDIC and International Chamber of Commerce (ICC). The issues on DRB model have been highlighted and the framework was developed to help Owner and Contractor to draft DRB provisions when they decided to utilize DRB for their project. Structure interviews have been conducted and the positive reaction from interviewees on possibility of implementing DRB in the Malaysian construction industry have been gathered. The interviews data shown that there are four (4) mechanisms to consider when implementing DRB which are (1) Current practice of application of DRB mechanism in Malaysia (2) Relevant issues of the DRB on Construction Projects (3) Barriers to implementation of DRB (4) Required conditions for adapting the DRB in Malaysia. Despite those findings, the experts agreed that DRB process point to its near perfect track record of avoiding litigation or arbitration on projects where it is used.