Background
When did the Dispute Board of Construction (Dewan Sengketa/DS Konstruksi) appear in Indonesia?
The Dispute Board of Construction first appeared in the Construction Services Act No.2 Year 2017.
The Dispute Board of Construction is a development of the Dispute Adjudication Board (FIDIC Conditions of Contract 1999 Rainbow Series), Dispute Board (FIDIC Multilateral Harmonised Edition 2006,2010) in line with the Dispute Avoidance and Adjudication Board (FIDIC Conditions of Contract 2017 Reprinted 2022 Rainbow Series).
Government Regulation No. 22 of 2020 (Regulation of Law No. 2 of 2017 on Construction Services) – Chapter IV, Section VII: The Dispute Board of Construction has been specifically regulated and in Article 95 paragraph (2) there is a duration that must be considered in submitting an objection to the decision of the Dispute Board of Construction, where the article states that “In the absence of an objection within 28 (twenty-eight) calendar days, the decision of the Dispute Board of Construction is final and binding on both parties.”
Dispute Board of Construction
The Dispute Board of Construction or Dispute Board is a construction dispute resolution process “at the job site”, generally consisting of three independent/impartial and impartial persons chosen by the contracting parties. Formed by agreement of the parties, since the beginning of the implementation of the construction work contract to prevent and resolve construction disputes with the principles of being fast, cheap, having legal certainty, maintaining good relations, and the case cannot be opened to the public, unless otherwise determined by the parties and/or the court.
The Dispute Board of Construction has the function of both preventing and resolving construction disputes. A significant difference between the Dispute Board of Construction and the average other alternative dispute resolution of construction (and perhaps the reason why the Dispute Board of Construction can be successful) is that the Dispute Board of Construction is appointed at the start of the project before construction disputes arise and, by making regular site visits, is actively involved during the project (every agreed period thereafter).
In its use, the Dispute Board of Construction is selected from the beginning of the engagement until the contract period ends or is terminated, by direct appointment, then the appointment of the Dispute Board of Construction Expert is stipulated in the Tripartite Agreement which is not separate from the Construction Services engagement.
The Dispute Board of Construction becomes part of the project administration and thus can influence, during the contract period, the performance of the parties bound by the contract. DS has ‘real-time’ value.
They will have the main task of preventing disputes between the parties; and resolve disputes through the provision of professional consideration of certain aspects as needed; or resolve construction disputes through the formulation of formal conclusions as set forth in the decision of the Dispute Board of Construction.
By forming the Dispute Board of Construction since the beginning of the project, the members of the Dispute Board of Construction become part of the project team and are considered in a different way and because of their “direct” approach they can be trusted to be fair and impartial, and their advice is respected and accepted more easily than a third party or stranger in the project.
PADSK Commitment:
- Socialization/dissemination of the Dispute Board of Construction as an efficient and effective modality to avoid and resolve construction disputes of construction contracts
- Training and development of Dispute Board of Construction experts
- Preparing a list of Dispute Board of Construction experts
- Support: back up specialists/technical advice, data and information on the assignment of the Dispute Board of Construction
- Drafting guidelines and codes of ethics for Dispute Board of Construction experts