COMMITTEE ON DISPUTE PREVENTION AND SOLUTIONS

Dispute Boards

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About the Dispute Board

The dispute board is a dispute settlement mechanism that seeks to solve conflicts in the corporate area, especially in relation to long-term contracts such as civil construction contracts.

It is formed by a committee, composed of one or more independent professionals, who periodically follow the progress of the contract. In this way, the dispute board provides a sort of management that prevents the intensification of divergences and conflicts arising from the natural wear of the relations between the parties involved.

The adoption of this method is especially advisable in addition to the civil construction sector, in relations arising from franchise agreements, intellectual property issues and cases of judicial reorganization of companies. This is because they are long-term agreements, often with a lot of related and derivative contracts, which justifies the application of the dispute board.

The mechanism can be used in three modalities: the dispute review board (DRB), which advises parties with suggestions only; the dispute adjucation board (DAB), in which the committee plays a decisive role, imposing the solutions; and the combined dispute board (CDB), which can either issue non-binding recommendations or make binding decisions.

The efficiency of the dispute board, both in terms of obtaining solutions and in the speed of the process, has been evidently proven. Data from the Dispute Resolution Board Foundation indicate that 99% of disputes using dispute boards are closed in less than 90 days, and that 98% of disputes are resolved by the mechanism.

In addition to being effective, the dispute boards are also an important element of transparency, which ensures the proper execution of the contracts and the smooth running of the projects. In this way, the mechanism ends up contributing to the reputation of the parties involved in the corporate environment, giving them intangible advantages in the market.

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