Adjudication

Adjudication (Dispute Adjudication) is a procedure for the out-of-court resolution of disputes between two or more contracting parties, particularly common in common-law jurisdictions. It requires a contractual agreement between the parties, which may already be included in the construction contract. The procedure is conducted by one or more adjudicators forming the Dispute Adjudication Board (DAB).

The parties determine the details of the adjudication procedure and the composition of the DAB, potentially when concluding the construction contract. This allows procedural rules tailored to their needs, provided they meet fundamental due-process requirements.

Dispute Adjudication aims to have disputes concerning the performance of a construction or plant engineering contract decided as quickly as possible by competent experts. This distinguishes it from traditional conciliation, which seeks an amicable settlement and generally gives the conciliator no power to make a binding decision. Adjudication differs from arbitration mainly in the legal nature and binding effect of the DAB’s decision. Depending on the parties’ agreement, it is only provisionally binding and generally subject to review by a state court or arbitral tribunal, although recourse to either is suspended at least for the duration of the adjudication proceedings.