'Section III. The arbitration agreement and the nature of the issues of jurisdiction

15. The Contract incorporated the Conditions of Contract for Electrical and Mechanical Works and for Building and Engineering Works designed by the Contractor, published by Fédération Internationale Des Ingénieurs-Conseils ("FIDIC"), First Edition 1999. A contract in this form and incorporating these Conditions is commonly known as the "Yellow Book".

16. Clause 20 of the Conditions legislates for the resolution of disputes and contains the arbitration agreement. It is necessary to set Sub-Clauses 20.2 to 20.8 verbatim.

20.2 Appointment of the Dispute Adjudication Board

Disputes shall be adjudicated by a DAB in accordance with Sub-Clause 20.4

[Obtaining Dispute Adjudication Board's Decision]. The Parties shall jointly appoint a DAB by the date 28 days after a Party gives notice to the other Party of its intention to refer a dispute to a DAB in accordance with Sub-Clause 20.4.

The DAB shall comprise, as stated in the Appendix to Tender, either one or three suitably qualified persons ("the members"). If the number is not so stated and the Parties do not agree otherwise, the DAB shall comprise three persons.

If the DAB is to comprise three persons, each Party shall nominate one member for the approval of the other Party. The Parties shall consult both these members and shall agree upon the third member, who shall be appointed to act as chairman.

However, if a list of potential members is included in the Contract, the members shall be selected from those on the list, other than anyone who is unable or unwilling to accept appointment to the DAB.

The agreement between the Parties and either the sole member ("adjudicator") or each of the three members shall incorporate by reference the General Conditions of Dispute Adjudication Agreement contained in the Appendix to these General Conditions, with such amendments as are agreed between them.

The terms of the remuneration of either the sole member or each of the three members shall be mutually agreed upon by the Parties when agreeing the terms of appointment. Each Party shall be responsible for paying one-half of this remuneration.

If at any time the Parties so agree, they may appoint a suitably qualified person or persons to replace any one or more members of the DAB. Unless the Parties agree otherwise, the appointment will come into effect if a member declines to act or is unable to act as a result of death, disability, resignation or termination of appointment. The replacement shall be appointed in the same manner as the replaced person was required to have been nominated or agreed upon, as described in this Sub-Clause.

The appointment of any member may be terminated by mutual agreement of both Parties, but not by the Employer or the Contractor acting alone. Unless otherwise agreed by both Parties, the appointment of the DAB (including each member) shall expire when the DAB has given its decision on the dispute referred to it under Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Decision], unless other disputes have been referred to the DAB by that time under Sub-Clause 20.4, in which event the relevant date shall be when the DAB has also given decisions on those disputes.

20.3 Failure to Agree Dispute Adjudication Board

If any of the following conditions apply, namely:

(a) the Parties fail to agree upon the appointment of the sole member of the DAB by the date stated in the first paragraph of Sub-Clause 20.2 [Appointment of the Dispute Adjudication Board],

(b) either Party fails to nominate a member (for approval by the other Party) of a DAB of three persons by such date,

(c) the Parties fail to agree upon the appointment of the third member (to act as chairman) of the DAB by such date, or

(d) the Parties fail to agree upon the appointment of a replacement person within 42 days after the date on which the sole member or one of the three members declines to act or is unable to act as a result of death, disability, resignation or termination of appointment,

then the appointing entity or official named in the Appendix to Tender shall, upon the request of either or both of the Parties and after due consultation with both Parties, appoint this member of the DAB. This appointment shall be final and conclusive. Each Party shall be responsible for paying one-half of the remuneration of the appointing entity or official.

20.4 Obtaining Dispute Adjudication Board's Decision

If a dispute (of any kind whatsoever) arises between the Parties in connection with, or arising out of, the Contract or the execution of the Works, including any dispute as to any certificate, determination, instruction, opinion or valuation of the Engineer, then after a DAB has been appointed pursuant to Sub-Clauses 20.2 [Appointment of the Dispute Adjudication Board] and 20.3 [Failure to Agree Dispute Adjudication Board] either Party may refer the dispute in writing to the DAB for its decision, with copies to the other Party and the Engineer. Such reference shall state that it is given under this Sub-Clause.

For a DAB of three persons, the DAB shall be deemed to have received such reference on the date when it is received by the chairman of the DAB.

Both Parties shall promptly make available to the DAB all information, access to the Site, and appropriate facilities, as the DAB may require for the purposes of making a decision on such dispute. The DAB shall be deemed to be not acting as arbitrators.

Within 84 days after receiving such reference, or the advance payment referred to in Clause 6 of the Appendix - General Conditions of Dispute Adjudication Agreement, whichever date is later, or within such other period as may be proposed by the DAB and approved by both Parties, the DAB shall give its decision, which shall be reasoned and shall state that it is given under this Sub­Clause. However, if neither of the Parties has paid in full the invoices submitted by each member pursuant to Clause 6 of the Appendix, the DAB shall not be obliged to give its decision until such invoices have been paid in full. The decision shall be binding on both Parties, who shall promptly give effect to it unless and until it shall be revised in an amicable settlement or an arbitral award as described below. Unless the Contract has already been abandoned, repudiated or terminated, the Contractor shall continue to proceed with the Works in accordance with the Contract.

If either Party is dissatisfied with the DAB's decision, then either Party may, within 28 days after receiving the decision, give notice to the other Party of its dissatisfaction. If the DAB fails to give its decision within the period of 84 days (or as otherwise approved) after receiving such reference or such payment, then either Party may, within 28 days after this period has expired, give notice to the other Party of its dissatisfaction.

In either event, this notice of dissatisfaction shall state that it is given under this Sub-Clause, and shall set out the matter in dispute and the reason(s) for dissatisfaction. Except as stated in Sub-Clause 20.7 [Failure to Comply with Dispute Adjudication Board's Decision] and Sub-Clause 20.8 [Expiry of Dispute Adjudication Board's Appointment], neither Party shall be entitled to commence arbitration of a dispute unless a notice of dissatisfaction has been given in accordance with this Sub-Clause.

If the DAB has given its decision as to a matter in dispute to both Parties, and no notice of dissatisfaction has been given by either Party within 28 days after it received the DAB's decision, then the decision shall become final and binding upon both Parties.

20.5 Amicable Settlement

Where notice of dissatisfaction has been given under Sub-Clause 20.4 above, both Parties shall attempt to settle the dispute amicably before the commencement of arbitration. However, unless both Parties agree otherwise, arbitration may be commenced on or after fifty-sixth day after the day on which notice of dissatisfaction was given, even if no attempt at amicable settlement has been made.

20.6 Arbitration

Unless settled amicably, any dispute in respect of which the DAB' s decision (if any) has not become final and binding shall be finally settled by international arbitration. Unless otherwise agreed by both Parties:

(a) the dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce,

(b) the dispute shall be settled by three arbitrators appointed in accordance with these Rules, and

(c) the arbitration shall be conducted in the language for communications defined.in Sub-Clause 1.4 [Law and Language].

The arbitrator(s) shall have full power to open up, review and revise any certificate, determination, instruction, opinion or valuation of the Engineer, and any decision of the DAB, relevant to the dispute. Nothing shall disqualify the Engineer from being called as a witness and giving evidence before the arbitrator(s) on any matter whatsoever relevant to the dispute.

Neither Party shall be limited in the proceedings before the arbitrator(s) to the evidence or arguments previously put before the DAB to obtain its decision, or to the reasons for dissatisfaction given in its notice of dissatisfaction. Any decision of the DAB shall be admissible in evidence in the arbitration.

Arbitration may be commenced prior to or after completion of the Works. The obligations of the Parties, the Engineer and the DAB shall not be altered by reason of any arbitration being conducted during the progress of the Works.

20.7 Failure to Comply with Dispute Adjudication Board's Decision

In the event that:

(a) neither Party has given notice of dissatisfaction within the period stated in Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Decision],

(b) the DAB's related decision (if any) has become final and binding, and

(c) a Party fails to comply with this decision, then the other Party may, without prejudice to any other rights it may have, refer the failure itself to arbitration under Sub-Clause 20.6 [Arbitration], Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Decision] and Sub-Clause 20.5 [Amicable Settlement] shall not apply to this reference.

20.8 Expiry of Dispute Adjudication Board's Appointment

If a dispute arises between the Parties in connection with, or arising out of, the Contract or the execution of the Works and there is no DAB in place whether by reason of the expiry of the DAB's appointment or otherwise:

(a) Sub-Clause 20.4 [Obtaining Dispute Adjudication Board's Decision] and Sub-Clause 20.5 [Amicable Settlement] shall not apply, and

(b) the dispute may be referred directly to arbitration under Sub-Clause 20.6 [Arbitration].

The Arbitral Tribunal notes that this clause is the standard Yellow Book provision.

17. Clause 20.2 refers to the General Conditions of Dispute Adjudication Agreement to be found in the Appendix to the General Conditions. In that Appendix, the terms Employer and Contractor have the same meaning as expressed in the FIDIC Conditions. The term "Member" is defined in the Dispute Adjudication Agreement as being:

(i) the sole member of the DAB (or "adjudicator") and, where this is the case, all references to the "Other Member" do not apply.

or

(ii) one of the three persons who are jointly called "the DAB" (or "dispute adjudication board") and, where this is the case, the other two persons are called the "Other Members".

18. The Dispute Adjudication Agreement is to be a tripartite agreement between the Employer, the Contractor and the Member. Clause 2 of the General Conditions of the Dispute Adjudication Agreement provides:

The Dispute Adjudication Agreement shall take effect when the Employer, the Contractor and each of the Members (or Member) have respectively each signed a dispute adjudication agreement.

When the Dispute Adjudication Agreement has taken effect, the Employer and the Contractor shall each give notice to the Member accordingly. If the Member does not receive either notice within six months after entering the Dispute Adjudication Agreement, it shall be void and ineffective.

The employment of the Member is a personal appointment. No assignment or subcontracting of the Dispute Adjudication Agreement is permitted without the prior written agreement of all the parties to it and of the Other Members (if any).

Counsel for the Claimant also drew attention to Clause 4(e) of the General Conditions of the Dispute Adjudication Agreement which requires the Member to comply with annexed procedural rules and with Sub-Clause 20.4 of the Conditions of Contract. Those rules comprise 6 paragraphs and (inter alia) require the DAB to act fairly and impartially and empower the DAB to establish the procedure to be applied in determining the dispute.

19. The parties to this reference and published sources generally distinguish between a permanent DAB and an ad hoc DAB. The Arbitral Tribunal should explain its own understanding of these terms. Some decades ago, FIDIC concluded that there was great merit in setting up a scheme where an entity, truly independent of the parties, was in place to determine in the course of the execution of major projects, disputes arising between the parties. The decision on any dispute would be interim in the sense that, subject to notices being given within time limits, the dispute would be reheard in all its aspects in arbitration. The benefit of the scheme was to give the parties a swift and relatively inexpensive means of resolving differences and, if the resolution of the DAB were acceptable, the very considerable cost of an arbitration would be avoided. In earlier editions of the FIDIC Forms of Contract and Conditions, particularly that known as the Red Book, provision was made for the DAB to be "in place" at the time of the making of the parties' contract and to retain jurisdiction over disputes throughout the performance of the Works. Such a provision is for a standing or permanent DAB. As a later variant, the scheme provided for the appointment of a DAB if and when a dispute arose: hence the expression an "ad hoc" DAB. The potential, if not the actual, advantage of the latter was further economy. Clause 20 of the Conditions of Contract in the present case, in particular by Sub-Clauses 20.2 and 20.3, contemplate the appointment of an ad hoc DAB, which is the scheme adopted in the Yellow Book.

20. However, while the parties are agreed on the meaning to be given to the expressions standing or permanent DAB, on the one hand, and ad hoc DAB on the other, and that agreement is consistent with the Arbitral Tribunal's understanding as set out above, there is debate between them as to what sort of DAB this Contract calls for. At a late stage, namely in the Respondents' further pleading on jurisdiction …, the contention was advanced that the parties had agreed to amend the Yellow Book standard form so as to replace the ad hoc scheme with a Red Book form of DAB Agreement. It is accepted, on behalf of the Respondents, that no amendments were made to Clause 20 of the General Conditions but pointed out that Annex 2 to the Conditions of Particular Application is inconsistent with that Clause. Annex 2 …contains the statement:

The Conditions of Dispute Adjudication Agreement comprise of the General Conditions of Dispute Adjudication which is appended to the General Conditions for Construction, First Edition 1999 …

being a reference to the Red Book. The Respondents submit that, since by Clause 1.5 of the Conditions of Contract, Particular Conditions prevail over General Conditions, the inconsistency must be resolved in favour of the Red Book with the result that the parties intended that disputes be first resolved by a permanent DAB.

21. The nature of the issue about jurisdiction can be simply stated. It is the Claimant's case that, on two grounds, there was no DAB in place at the time of the reference to arbitration and the Request for Arbitration. The Respondents dispute that: they argue that (a) at the time of the Request for Arbitration there was a DAB in place, namely [Mr D], (b) that, even if (a) be wrong, there is a contractual obligation to appoint a DAB and obtain a DAB decision on the dispute before any reference to arbitration. The Claimant says it is within the exceptions legislated for in Sub-Clause 20.8; the Respondents say Sub-Clause 20.8 does not apply.

22. It appears to be common ground between the parties that the arguments on jurisdiction can be resolved whichever way the debate over the alleged inconsistency in the contract be resolved. At paragraph 5 of the Skeleton Argument provided on behalf of the Claimant, we find this:

The new suggestion that the DAB was intended to be standing is in fact irrelevant because whatever form of DAB Agreement was or should have been used Clause 20.8 of the Conditions provides that if there is no DAB in place a dispute may be referred directly to arbitration.

At slide 32 of the Respondents' Counsels' "powerpoint" presentation, there is the comment:

Sub-Clause 20.8 does not excuse the Contractor's failure to follow the DAB process …

Same result obtains whether ambiguity in Contract is resolved in favour of a permanent or ad hoc DAB.

23. Nevertheless, the Arbitral Tribunal thinks that it should determine the debate over this point. For the Claimant, it was submitted that, on the proper construction and interpretation of the Contract, the dispute resolution process provided for references to an ad hoc DAB. Alternatively, if that submission should fail, it was argued that the Respondents were, having regard to the history of the reference of disputes to an ad hoc DAB, estopped by convention from contesting the construction of the Contract for which the Claimant contends.

24. It is clear that Clause 20.2 contemplates the use of ad hoc DABs. The agreement in the Appendix referred to is, to quote Counsel, "... the normal Yellow Book form of general conditions that are for an ad hoc DAB". The last paragraph of the Sub-Clause provides for the termination of the appointment when the decision of the dispute referred to the DAB under Clause 20.4 is given, subject to other disputes which have been referred to the DAB by then. Contrary to what we understand to have been said by the Respondents' counsel, the parties did not amend the Yellow Book form of Appendix to Tender to reflect the Red Book form. The Dispute Adjudication Agreement annexed to the Contract … is the form for use with an ad hoc DAB and provides for a daily fee rather than a retainer.

25. It is certainly true that Annex 2 to the Conditions of Particular Application is a document containing terms for the appointment of a one-member DAB to act under the Dispute Adjudication Agreement found in the Red Book. But the only reference to Annex 2 in the body of the Conditions of Particular Application is in the context of Clause 1.6 of the General Conditions. In the General Conditions, Clause 1.6 provides:

The Parties shall enter into a Contract Agreement within 28 days after the Contractor received the Letter of Acceptance, unless they agree otherwise. The Contract Agreement shall be based upon the form annexed to the Particular Conditions. The costs of stamp duties and similar charges (if any) imposed by law in connection with entry into the Contract Agreement shall be borne by the Employer.

The Conditions of Particular Application require the deletion of the second sentence and the substitution of:

The Form of Agreement should be worded in accordance of [sic] the sample Form of Agreement included as Annex 2 to those Conditions of Particular Application.

The Tribunal agrees with Counsel for the Claimant: the reference to Annex 2 is an obvious error. The reference should have been to Annex 1 which is the standard form of agreement. As a matter of construction, the necessary corrections will be made.

26. The Tribunal must read all the contract documents together to ascertain the intention of the parties. Such is an elementary rule and is enshrined in the opening words of Clause 1.5 which states that the documents forming the Contract are to be taken as mutually explanatory of one another. Further, the language of the contractual terms is to be given its ordinary and natural meaning and the documents are to be interpreted accordingly. Such is the guiding principle of all common law jurisdictions and there has been no suggestion that the [African country whose law was applicable and in which the arbitration was seated and the contract performed] has departed from it. The Arbitral Tribunal considers and concludes that these parties intended that disputes should be referred in the first instance to the decision of an ad hoc DAB.

27. Having reached that conclusion, it is unnecessary to go on and consider the application of the rules governing estoppels by convention. The Tribunal thinks it would only serve to overburden this Award to do so.

………

Section V. Summary of the parties' contentions

43. For the Respondents, the principal submissions are:

(i) that the language of the Contract shows that the DAB process is not optional, rather the reference of all disputes to the DAB is a condition precedent to any references to arbitration;

(ii) that, if the condition precedent is not fulfilled, an Arbitral Tribunal to whom a dispute is referred has no jurisdiction;

(iii) that Sub-Clause 20.8 does not, on the proper construction of the Contract, override the mandatory nature of the DAB process;

(iv) that, in any event, Sub-Clause 20.8 has no application to the facts of the present case since, by 22 April 2009, a DAB had been appointed and was "... in place...";

(v) If a DAB was not "... in place...", the parties were obliged, on a proper construction of the Contract to appoint one, either by agreement or through the appointing entity or official under Sub-Clause 20.3;

(vi) The Claimant, on the facts, referred claims and disputes for decision by a DAB, although, on the basis of the arguments now advanced, there was no DAB in place. Having elected to submit the first seven disputes to a DAB, the Claimant is bound to follow the same process in respect of the claim referred to arbitration on 22 April 2009.

The Respondents did not pursue a separate argument that, if the Arbitral Tribunal had jurisdiction, the Claimant's claim was nevertheless inadmissible.

44. The Claimant's primary submissions are:

(i) as at 22 April 2009, there was no DAB in place because no agreement similar to or in the form of the Dispute Adjudication Agreement was ever made between [Mr D] and the parties. Mr [C] had withdrawn before any such agreement had been concluded and the appointment of Mr [A] had expired. This submission is said

to provide the simplest answer to whether there was a DAB in place; and

(ii) alternatively, if [Mr D] had been appointed - contrary to the submission summarised at (i) - that appointment was void for want of the required consultation between the parties.

45. In reply to the Respondents' arguments, the Claimant says:

(a) the contention that, if there was no DAB in place, there was an obligation to appoint one, ignored the clear words used in Sub-Clause 20.8 and was wrong;

(b) it was wrong both in fact and in law for the Respondent to say that the Claimant could not rely on the absence of an executed Dispute Adjudication Agreement because to do so would be to take advantage of the Claimant's own breach;

(c) that the doctrine of election applies where a party makes a choice between inconsistent rights and no such choice had been made. Since there was no DAB in place after the expiry of Mr [A]'s appointment, the Claimant was entitled to go to arbitration without a reference to a DAB.

46. In reply to the Claimant's principal arguments, the Respondents say:

(a) the conclusion of a Dispute Adjudication Agreement between the parties and the Member (i.e. the adjudicator) is not required to effect the appointment;

(b) there had been more than sufficient consultation between [the appointing authority] and the parties prior to the appointment of [Mr D].

Section VI. The Arbitral Tribunal's reasoning and decision

47. It is clear that this Contract provides for all disputes and differences to be referred to and decided by a DAB. The opening sentence of Sub-Clause 20.2 of the Conditions is in mandatory terms. The Claimant accepts, rightly, that the submission of a dispute to the DAB and, in the event of a party being dissatisfied with the DAB's decision, a notice of dissatisfaction are conditions which must be satisfied before there can be a reference to arbitration, subject only to the operation of Sub-Clause 20.8. The Arbitral Tribunal considers that acceptance of a reference to a DAB being generally a condition precedent to arbitration is evident from the argument at the hearing. …

The Arbitral Tribunal considers that acceptance of the proposition that generally the submission of a dispute to a DAB is a condition precedent to arbitration is also implicit in … the Claimant's Skeleton Argument.

48. Counsel for the Respondents have emphasized that, in the contemporary correspondence, the Claimant appears to have accepted the appointment of both [Mr C] and [Mr D] even though, in neither case, had a Dispute Adjudication Agreement been concluded. While the comment on these documents is accurate, the Arbitral Tribunal considers that the Claimant's argument that there is no Sub-Clause 20.3 appointment until a Dispute Adjudication Agreement is made to be based upon a submission as to the correct interpretation of the Contract. In reaching its conclusion on this point of construction, the Tribunal thinks that the conduct of the parties post-Contract is irrelevant.

49. However, there is nothing in Sub-Clause 20.3 to govern the form of the appointment of the DAB by the appointing entity following a request from either or both of the parties. The appointment, once made, is final and conclusive. At the moment of a (valid) appointment, the role of the appointing entity is discharged. It is the parties and the DAB who then proceed to negotiate and agree terms: the appointing entity has nothing to do with that process.

50. If the parties to this Contract had intended to provide that there could be no appointment of a DAB under Clause 20.3 unless and until (a) the appointing entity had nominated a Member and (b) the nominated Member and the parties had reached terms, that intention could have been expressed. It was not expressed. In the opinion of the Tribunal, the words "... in place..." in Sub-Clause 20.8 means validly appointed; those words do not require that the dispute adjudication agreement between the parties of the DAB has been executed.

51. Accordingly, the Arbitral Tribunal is against the Claimant on the first of its principal submissions.

52. The second argument concerns the alleged lack of consultation. Following the withdrawal of Mr [C], the only possible appointee under Sub-Clause 20.3 is [Mr D]. On the language of that Sub-Clause, the consultation between the appointing entity and the parties must precede the appointment. If the requirements of consultation are not fulfilled, it is submitted by the Claimant that a purported appointment is invalid. For that proposition, the Claimant relies on Sumukan Ltd v. Commonwealth Secretariat [2007] EWCA 1148. That was a decision of the Court of Appeal in England. …

The Respondents did not challenge the Claimant's submission as to the persuasive authority of English case law nor the submission about the reasoning of the Court of Appeal in Sumukan. That case is certainly a strong one since the tribunal appointed, invalidly, had already conducted a hearing on the merits. The Arbitral Tribunal accepts both points. However, Sumukan was a decision on very different facts: there, there had been no consultation whatsoever, as required by the relevant legislation, whereas, in the present case, the parties had had an opportunity of explaining the nature of the claims (i.e. Claims No. 6 and No. 7) giving rise to the disputes and of indicating to [the appointing authority] the experience which, they considered, should be looked for in a candidate for appointment as the DAB. …

53. In the final analysis, the Claimant's submission that there was a failure to consult the parties before the appointment of [Mr D] with the result that the purported appointment of [Mr D] on 20 March 2009 was void rests on two points. The first is that the [appointing authority] did not, in contrast to the publicly promulgated procedure published by FIDIC, inform the parties that it was considering the appointment of [Mr D] and invite comments before confirming, or otherwise, that appointment. The second is that [the appointing authority] did not raise with the parties, before the appointment, the fact that the [appointing authority] was considering the appointment of a … national [of the same country of origin as the Respondents].

54. The Tribunal, in deliberating on these two points, recalled the factual history. The disputes over which the [appointing authority] was first asked to appoint a DAB were disputes over Claims 6 and 7 described by the Claimant as being of a legal and contractual nature. Details of those claims, of the arguments in support of them and contemporary documents were sent to the [appointing authority] on 9 October 2008. These were the same disputes over which the [appointing authority] was asked to make a further appointment, as a matter of urgency, when Mr [C] was obliged to withdraw. By then, the Claimant had made clear its concerns over the experience of the DAB … and we accept that the [appointing authority] had carefully considered the Claimant's observations.

55. The facts do not, however, help on the Claimant's first point. The question is this: is the appointing entity obliged to raise with the parties the identity of those being considered for appointment under Sub-Clause 20.3. [Claimant] says:

They [the Respondents] contend that there was no obligation to consult as to the identity of the individual to be appointed. This cannot be correct because the words of Clause 20.3 are "… after due consultation with both parties appoint this member of the DAB". Moreover, the [appointing authority]'s appointment function only comes into force because the parties cannot agree on the member; the identity of the member is the focus of the [appointing authority]'s job and it is difficult to see what else they are supposed to consult about.

… the Arbitral Tribunal does not read Sub-Clause 20.3 as indicating an express expectation that the "appointing entity" will discuss with the parties the identity of the possible appointees. The words "... this member of the DAB" is clearly a reference back to sub-paragraphs (a) to (d) inclusive which list a series of contingencies the occurrence of which would prevent either a sole member or, where appropriate, a third member of a DAB being nominated. In the opinion of this Tribunal and notwithstanding the practice adopted by FIDIC, it would be wrong to limit the discretion of the appointing entity by requiring the identification of possible candidates in the absence of express language. To do so would provide yet another opportunity for a party to engage in tactical manoeuvres.

56. It seems to us that the "... focus of the [appointing authority]'s job ..." in the present case was to appoint as DAB a person whose experience, discipline and qualifications, were appropriate to allow that person to determine the notified disputes. On the facts, there is no doubt that, between October 2005 and March 2009, the [appointing authority] had received from the Claimant more than sufficient information to enable it to exercise proper judgment over the selection of a suitable candidate, which it did, on 20 March, by appointing [Mr D]. It is, of course, true that [Mr D] is a … national [of the same country as the Respondents] and that, in 2008, the Claimant had suggested to the [appointing authority] that the interests of both parties would best be served by the appointment of an adjudicator from a neutral third country. The [appointing authority], no doubt, had that consideration in mind when appointing Mr [C]. However, it is obviously not always possible to find a suitable candidate from a neutral country. After the withdrawal of Mr [C] but before 20 March 2009 when [Mr D] was appointed, the Claimant had stressed that the DAB should be impartial and independent but did not repeat its earlier stated preference for a DAB who was neither [from the Respondents' country] nor [from the Claimant's country]. [Mr D] gave a statement of independence on 19 March 2009 by letter to [the appointing authority]. He was appointed as DAB the next day.

57. The Tribunal is satisfied that there was sufficient consultation with the parties for the purpose of Sub-Clause 20.3 before [Mr D]' s appointment as DAB in respect of Claim No. 6 and Claim No. 7.

58. For the above reasons, the Arbitral Tribunal finds that there was a DAB in place when the Claimant filed the Request for Arbitration on 22 April 2009. It follows from the Tribunal's conclusion that Sub-Clause 20.4 applied, that a reference to the DAB was a condition precedent to arbitration and that, since that condition precedent has not been satisfied, the Arbitral Tribunal has no jurisdiction. It follows from the Arbitral Tribunal's opinion that a reference of a dispute to a DAB is mandatory and a condition precedent to arbitration … that, absent such reference, there is no jurisdiction save only where Sub-Clause 20.8 applies. In the present case, Sub-Clause 20.8 does not apply.

59. The conclusion that, on 22 April 2009, there was a DAB in place and that Sub-Clause 20.8 does not apply means that it is not necessary to decide the alternative arguments raised by the Respondents.

60. The relief sought by the Respondents from the Tribunal in this Partial Award is set out at paragraph 42 of their skeleton submissions. That paragraph includes a claim for a declaration that the Claimant commenced the arbitration "... in breach of the contractually­agreed dispute resolution clause …" and a declaration that the Respondents are entitled to damages for that breach in an amount to be determined by the Tribunal following further submissions. The Tribunal wishes to make it clear that those claims for relief are reserved for further argument and further award. Since the Arbitral Tribunal declines jurisdiction over the claim made in the Request for Arbitration (that is for the return of the Performance Security), neither the Respondents' contingent claims … nor the Claimant's supplemental claims … arise for further consideration. In any event, the Arbitral Tribunal would lack jurisdiction over claims arising from the termination for the same reason as it lacks jurisdiction over the claims about the Performance Security. The claims for relief by the Respondents which are reserved are not necessarily in that category.

Section VII. Dispositive Award

61. All issues of costs, including responsibility for all or part of the deposits paid to the ICC, are reserved for further submissions and further award.

62. The Arbitral Tribunal makes a Partial Award declaring that it has no jurisdiction over the claims filed by the Claimant in the Request for Arbitration ...

63. The Respondents' claim for damages against the Claimant for alleged breach by starting these proceedings without a prior reference to a DAB is reserved for further argument and award.'