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Home > Journal > Advance publication

Dispute Boards for Infrastructure Projects in Latin America: A New Kid on the Block

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D. Figueroa
D. Figueroa

Published 28 June 2019

Introduction

(This paper is available in English and Spanish - combined in the same document)

The use of Dispute Boards (DBs) as a variant of the conventional alternative dispute resolution mechanisms of mediation and arbitration is increasing in prevalence in Latin America. This is in response to the criticism that arbitration has adopted the selfsame qualities of judicial disputes that it was created to avoid, becoming very cost- and time-inefficient. The shortcomings of arbitration are especially apparent in construction projects, particularly large-scale infrastructure undertakings, wherein the many moving parts and parties, unforeseen circumstances and time constraints necessitate quick and efficient decision-making that anticipates problems, rather than just reacts to them.

Dispute Boards are increasingly being viewed as a solution. That perspective is grounded in data demonstrating that, in between 72 per cent and 85 per cent of the cases, the parties accept the decisions of DBs without resorting to arbitration.

The structure of DBs contributes to their success, as they are designed to be responsive, convenient, and amicable. In Latin America, DBs are not born of legislation, but rather are contractual entities agreed upon by both parties. Dispute Boards are typically seen as the preliminary stage to arbitration, or as a mechanism used to avoid it altogether. Unlike arbitration, DBs - which are generally composed of one to three subject matter experts - are tasked with monitoring the progress of a project, and engaging in regular and unsolicited dialogue, identifying and resolving issues before they become true disputes between parties.

Examination of case studies of various countries in Latin America paints a picture of inconsistent adoption of DBs across the region, but also of a general trend towards their greater adoption. The leaders of this trend are countries like Peru, Chile, and Brazil which have, to greater or lesser degrees, enshrined DBs into their local and national law, and have experienced success in utilising them in important infrastructure projects. There is an expectation that DBs will continue to play an important role in the region, motivated by a need for large-scale public works projects, cost limitations, and previous success.

"Dispute Boards for Infrastructure Projects in Latin America: A New Kid on the Block" first appeared in the October 2017 issue of Dispute Resolution International (Vol 11 No 2 October 2017), and is reproduced by kind permission of the International Bar Association, London, UK. © International Bar Association.

Dispute Boards para proyectos de infraestructura en Latinoamérica: ¿Un advenedizo en el barrio?

Introducción

El uso de Dispute Boards (DBs) como una variante de los mecanismos alternativos convencionales de solución de disputas consistentes en la mediación y el arbitraje está siendo utilizado con más frecuencia en Latinoamérica. Este fenómeno está acaeciendo como respuesta a la crítica que se efectúa al arbitraje en cuanto ha adoptado las mismas características de las disputas judiciales que había tratado de evitar, transformándose en costosa e ineficiente. Los defectos del arbitraje son especialmente aparentes en proyectos de construcción, particularmente en aquellos que involucran infraestructura de larga escala, en los cuales los muchos participantes, las circunstancias imprevistas, y las restricciones de tiempo necesitan de un proceso de toma de decisión rápido y eficiente que anticipe los problemas, en lugar de simplemente reaccionar ante los mismos. 

Las Dispute Boards están siendo consideradas cada vez más como una solución a estos problemas. Esta perspectiva se basa en información que demuestra que en más del 80% de los casos, las partes aceptan las decisiones de las DBs sin recurrir al arbitraje. 

La estructura de las Dispute Boards contribuyen a su éxito, en cuanto están designadas para servir como un método racional, conveniente y amigable de solución de disputas. En Latinoamérica, las DBs no están contempladas generalmente en la legislación, sino que más bien son concebidas como entidades contractuales creadas por las partes. 

Las Dispute Boards son vistas típicamente como la etapa preliminar al arbitraje, o como un mecanismo para precisamente evitar el arbitraje. A diferencia del arbitraje, las DBs —que están normalmente compuestas de uno a tres expertos en la materia de que se trata— poseen la tarea de monitorear el progreso de un proyecto, y de involucrarse en un diálogo regular y no solicitado, identificando y resolviendo temas antes de que se transformen en verdaderas disputas entre las partes. 

Un examen de casos específicos en algunos países de Latino américa muestra una pintura variopinta de adopción inconsistente de DBs en la región, pero también exhiben una tendencia general hacia una adopción más completa de las mismas. Los países líderes de esta tendencia como Perú, Chile, y Brasil —que han consagrado, en un menor o mayor grado, las DBs en sus sistemas jurídicos locales y nacionales— han experimentado éxitos en su uso para proyectos de infraestructura importantes. Existe la expectativa de que las DBs continuarán jugando un rol importante en la región, motivadas por una necesidad de proyectos de carácter público de gran envergadura, limitaciones de costos, y experiencias previas positivas.

El artículo "Dispute Boards para proyectos de infraestructura en Latinoamerica: ¿Un advenedizo en el barrio?" fue publicado originalmente en Colombia a través de ejemplares impresos y mediante publicación electrónica, en el mes de abril del 2019, al interior de la revista internacional Foro de Derecho Mercantil, Editorial Legis, edición 63, p.27 a 60.

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Suggested Citation

D. Figueroa (2019, forthcoming) "Dispute Boards for Infrastructure Projects in Latin America: A New Kid on the Block"
(TDM, ISSN 1875-4120) June 2019, www.transnational-dispute-management.com

"Advance publication" is the name given to material that is published ahead of its appearance in a regular structured issue of our Journal. It is also possible to monitor this via RSS. Subscribers will receive update alerts via e-mail of the published articles as soon as they have been added to the website.

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