1. What is DRB in Project Finance?

Panel of 1 or 3 independent experts appointed at start of project, visit site regularly (NHAI: at least 6 times a year), familiar with project. Not judge, but technical + financial expert.

Functions:

1. Dispute Avoidance: Informal opinions, warns of risks before formal dispute.
2. Dispute Resolution: Formal referral, binding decision.

FIDIC Evolution:

• FIDIC 1999 Red/Yellow Book: DAB - Dispute Adjudication Board - Clause 20.4. Ad-hoc or standing.
• FIDIC 2017: DAAB - Dispute Avoidance/Adjudication Board - Clause 21. Heavy emphasis on avoidance. Mandatory standing board from outset in Red/Pink Books. Decision binding, must be complied promptly, then challenge via NOD.
• World Bank MDB Pink Book: Standing DAB mandatory for projects >$10m.

NHAI Model (India's largest project finance user):
NHAI has inbuilt resolution: DRB consisting of technical experts, 3-member board constituted who visit project site as and when required or at least six times in a year. Helps in getting firsthand information on site activities and resolving dispute before it escalates to arbitration/court. Plus CCIE - Committee of Chief Engineers.

2. Project Finance Clause Structure - Multi-Tier

Typical Project Finance Common Terms Agreement:

Tier 1: Engineer determination (14 days)
Tier 2: DRB/DAB referral (84 days decision)
Tier 3: Amicable settlement (28 days)
Tier 4: Arbitration (ICC/SIAC)

Process under FIDIC 1999 Sub-Clause 20.4:

1. Either party may refer dispute in writing to DAB after Engineer determination
2. Within 30 days, submit concise written statement + supporting docs: notice, issues, position with facts/law
3. DAB decides within 84 days
4. Decision binding immediately - must comply even if dissatisfied
5. If dissatisfied, issue Notice of Dissatisfaction (NOD) within 28 days, then arbitration

Lender protection: Common Terms Agreement says borrower must comply with DAB decision and continue debt service; lender does not have to wait for arbitration to enforce.