Mr. Le The Hung and Mr. Tran Pham Hoang Tung participated in the International Conference on Dispute Avoidance/Adjudication Board in Indonesia – CNC

Within the two days of 18 and 19, July 2024, Mr. Le The Hung and Mr. Tran Pham Hoang Tung had participated in the International Conference on Dispute Avoidance/Adjudication Board in Indonesia.

The topic of this Conference is “Synchronizing the application of FIDIC Contracts with specific related project country’s regulation to avoid disputes”, jointly held by PADSK and the Society of Construction Law Indonesia (SCLI), along with the assistance of DRBF and the University of Pekalongan.

The conference is joined by many credible experts in the field of construction from South East Asia as well as Japan, England, Sweden, UEA, Australia,.. and speakers of regional or international renown, including:

Professor Sarwono Hardjomujadi, President of SCL Indonesia, DRBF Region 2 Board of Directors, FIDIC Ambassador.
Peter Scott Caldwell, DRBF Region 2 Board of Directors
Professor Toshihiko Omoto, Adjunct Professor at Kyoto University, Japan
Professor Zhang Suibo, Dean of the School of International Engineering Management, Tianjin University, China.
Aisha Nadar, President of DRBF Region 2, DRBF Representative for Sweden
Castro Salvador, DRBF Region 2 Board of Directors, DRBF representative for Philippine
Jeremy Glover, Partner at Fenwick Elliot, President of DRBF in England.

Professor Sarwono Hardjomujadi, President of SCL Indonesia, DRBF Region 2 Board of Directors, FIDIC Ambassador

Peter Scott Caldwell, DRBF Region 2 Board of Directors

Mrs. Aisha Nadar, President of DRBF Region 2, Sweden

Professor Toshihiko Omoto, Adjunct Professor at Kyoto University, Japan

Through 10 discussion sessions over the 02 days of the Conference, the speakers and participants partook in passionate and in-depth exchanges on aspects of construction dispute avoidance/adjudication in accordance with FIDIC, including the amplification and encouragement of the application of Dispute Avoidance/Adjudication Board (DAAB/DAB) as an efficient means of contract management that could prevent and promptly resolve any arising dispute.

Accordingly, beneficial information and multifaceted perspectives on practical experience and solutions for construction disputes are given in highly practical topics, namely:

Regulations on dispute resolution in Asian countries;
Stories on successes of DAAB;
Practical application of DAAB in FIDIC 2017 and DAB in FIDIC 1999/2010;
Importance of Particular Conditions in dispute avoidance;
Alternative dispute resolution methods via mediation, arbitration, and DAAB;
Overview and dilemmas of the application of DAAB in Asian countries;
“Dispute avoidance” function of DAAB;
And many other interesting topics.

In the spirit of exchange and study experience from all over the world, the 03 presentations from the Society of Construction Law – Vietnam (Vietnam) were also highly appreciated by other participants of the Conference:

Practical application of Dispute Avoidance/Adjudication Board in Vietnam – Mr. Le The Hung, Vice Chairman of SCLVN, Managing Partner of CNC Law Firm.
Regulation on Dispute Resolution in Vietnam– Dr. Nguyen Thi Hoa, Member of the Standing Committee of SCLVN, Lecturer at the Faculty of International Law of Ho Chi Minh City University of Law.
The case of Vietnam from state management perspective – Mr Bui Thai Binh, Senior Specialist, Investment and Construction Contracts Division, Department of Construction Economics, Ministry of Construction.

Regarding his presentation, Mr. Le The Hung referred to the many practical applications of the Dispute Avoidance/Adjudication Board.

Mr. Le The Hung and other speakers discussed the practical application of the Dispute Avoidance/Adjudication Board in Indonesia

The most common, simple, and convenient choice is to “not apply” the Dispute Avoidance/Adjudication Board mechanism. Accordingly, Parties tend to “delete” any provision relevant to the Dispute Avoidance/Adjudication Board in Construction Contracts based on FIDIC Contracts.

If not, then, after comprehending the purpose and value of the Dispute Avoidance/Adjudication Board, Parties might start adjusting the provisions of the Contract accordingly.

According to Mr. Hung, the change from the empowerment given to the Engineer to serve the role of the Dispute Avoidance/Adjudication Board to the adjustments of specific provisions on Dispute Avoidance/Adjudication in each Contract is a great leap forward in the practical application in Vietnam

Based on the given examples, Mr. Le The Hung listed the 5 general features of the application of the Dispute Avoidance/Adjudication Board mechanism in Vietnam, namely:

Dispute Avoidance/Adjudication Board is not popular.
Most private projects choose to not apply the Dispute Avoidance/Adjudication Board
Public-funded projects are more likely to apply the Dispute Avoidance/Adjudication Board mechanism.
In some cases, the Mediation mechanism is applied instead of the Dispute Avoidance/Adjudication Board mechanism.
The “dispute avoidance” function of the Dispute Avoidance/Adjudication Board is mostly infeasible.

The above features point out the challenges in the application of the Dispute Avoidance/Adjudication Board in Vietnam. Mr. Hung also opined that the 5 major challenges in the practical application of DAAB in Vietnam would often be relevant to the following issues:

Cost
The ability of Parties to perform reviews on members of the Dispute Avoidance/Adjudication Board.
Legal frame
Enforcement
Complex procedure

Regarding Cost, Mr. Hung shared the difficulties encountered by Parties in the acquisition of approval from the authorities on the payment for Members of the Dispute Avoidance/Adjudication Board. In many projects, it would take up to 12 months for approval on the payment for Members of the Dispute Avoidance/Adjudication Board

Moreover, payment for Members of the Dispute Avoidance/Adjudication Board has yet to be considered as part of project management cost, instead, it is currently deemed legal fees for dispute resolution. This would mean payment for Members of the Dispute Avoidance/Adjudication Board would not be included in the cost estimation of projects.

Similarly, the current legal frame of Vietnam has yet to provide for the Dispute Avoidance/Adjudication Board. This shortcoming poses many challenges to the Parties in relation to the criteria for candidates, procedure and operation of the Dispute Avoidance/ Adjudication Board, recognition and enforcement of Decisions given by the Dispute Avoidance/Adjudication Board.

Therefore, Mr. Le The Hung concluded that only when the 5 challenges above are addressed would the application of the Dispute Avoidance, Adjudication Board become more popular, which would prevent or resolve the dispute at its inception, thereby mitigating the cost incurred by parties in the process of achieving the common goal of the Project.

In the spirit of favoring collaborations, international exchanges, and proactive contributions to credible conferences within the region, CNC has once again demonstrated its commitment to the constant improvement of expertise, professionalism, and ability so as to uphold its position as the leading law firm for legal services in the field of construction, real estate – infrastructure, and dispute resolution.