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

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.

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Dante Figueroa, (2017). Dispute Boards for Infrastructure Projects in Latin America : A New Kid on the Block , Dispute Resolution International, October 2017, p151 to p174,