Blockchain and Smart Contracts for Avoiding and Resolving Construction Disputes and Enforcing Dispute Adjudication Board Decisions

Abstract

This article explores how blockchain and smart contracts can revolutionize dispute resolution in the construction industry, particularly by addressing enforceability issues seen in traditional mechanisms such as The Federation Internationale des Ingenieurs-Conseil’s (FIDIC) dispute adjudication board (DAB). While FIDIC’s DAB decisions are binding but not final, leading to enforcement challenges, blockchain-based solutions offer more immediate and efficient alternatives. Following doctrinal, normative and partially comparative qualitative legal research methodologies, this study examines the potential of smart contracts to automate contract performance and payment, manage task performance and resolve disputes. Promising developments in blockchain-based smart contracts enable secure, performance-based payments and incorporate an escrow mechanism to minimize disputes. Despite these advancements, risks related to noncompliance remain. This article proposes improvements, including private blockchains, escrow mechanisms, and expert pools and transposing a standardized contracting on-chain for dispute resolution to enhance compliance and reliability. By integrating blockchain with traditional systems, this article suggests that stakeholders such as FIDIC can formalize procedures and provide clearer, enforceable outcomes, addressing existing gaps in enforcement and improving access to justice in construction disputes.