Empowering Mediators in the MENA Region

Construction projects are inherently complex and structured, often involving diverse parties, tight timelines, and substantial budgets. In today’s high-stakes construction projects, disputes are inevitable; however, how they are handled can determine the success or failure of multi-million-dollar ventures. To manage inevitable conflicts, the FIDIC (Fédération Internationale des Ingénieurs-Conseils) agreements have evolved dramatically, from litigation towards collaborative processes like adjudication and finally toward mediation. This shift reflects a growing emphasis on resolving disputes efficiently, maintaining project momentum, and preserving long-term relationships. Below, we trace this evolution, presenting Sub-Clause 21 in its entirety, before demonstrating how mediation naturally integrates into the FIDIC framework.

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To understand how mediation emerged, it is essential to revisit the early mechanisms of disputes management. Historically, under the 1999 FIDIC editions, a Dispute Adjudication Board (DAB) was introduced to deliver fast, interim decisions during project execution, reducing obstruction and reliance on costly arbitration. These boards often encouraged settlement before formal rulings, introducing a conciliation-like element informally into proceedings.

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By 2017, the Dispute Adjudication Board became a Dispute Avoidance/Adjudication Board (DAAB). The DAAB role was explicitly expanded to include helping parties avoid disputes. This shift signified FIDIC’s intention to proactively manage differences through dialogue, creating space for structured collaboration—like mediation—before matters escalate. The 2017 amendments introduced, through the Clause21, a structured reference for dispute resolution procedures, creating a clear pathway from notice to adjudication, “amicable settlement”, and ultimately arbitration.

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The text of Sub-Clause 21.3 and Sub-Clause 21.4 (summarized for clarity) reads as follows:

Sub-Clause21.3 [Dispute Avoidance/Adjudication Board]: The DAAB shall be in place from the beginning of the contract. Its role is not limited to adjudication but also includes dispute avoidance. The DAAB may invite the Parties to attempt to resolve issues amicably before rendering a decision.

Sub-Clause21.4 [Amicable Settlement]: If a Party is dissatisfied with the DAAB’s decision, it may issue a Notice of Dissatisfaction. In such case, the Parties shall attempt to settle the dispute amicably before referring it to arbitration.

In summary, Clause 21 of the FIDIC 2017 Red Book sets out a comprehensive Ulti-tiered approach to dispute resolution. It begins with the notification of claims, followed by the proactive role of the Dispute Avoidance/Adjudication Board (DAAB) to either prevent disputes from arising or to adjudicate them swiftly when they do. If disagreements persist, the clause insists on a phase of amicable settlement before moving forward to arbitration. This layered structure reflects FIDIC’s philosophy of balancing efficiency with fairness, ensuring that disputes are addressed early and constructively.

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Here lies the missing link: while Sub-Clause 21.3 introduces the DAAB’s facilitative and preventive role, Sub-Clause 21.4 institutionalizes the obligation for the parties to attempt “amicable settlement.” Although FIDIC does not explicitly name mediation, this structured and confidential process where a neutral third party facilitates dialogue, and negotiation serves as the perfect entry point for resolving disputes. This amicable settlement phase essentially acts as a mandatory cooling-off period, requiring parties to attempt resolution before escalation.

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By agreeing to appoint a neutral mediator within the amicable settlement window (commonly 28 to 56 days), parties can structure the process, fulfill their obligation and maximize the chance of resolving the dispute without escalation. In this sense, Sub-Clause 21.4 provides legal grounding to mediation within the FIDIC hierarchy, turning what could otherwise be a passive obligation into an active and results-oriented procedure.

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When carefully examined, Sub-Clause 21.3 represents more than a procedural step; it is a subtle but deliberate gateway to consensual dispute resolution. The DAAB role is to issue a decision that is binding but not final, which means parties must comply immediately, yet they retain the right to challenge the outcome. This creates an intermediate space between compliance and final resolution, a space that is uniquely suited for mediation.

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Together, Sub-Clause 21.3 and 21.4 form a continuum: the DAAB first encourages resolution through dialogue, and if its decision is contested, the “amicable settlement” obligation seamlessly opens the door to mediation as the natural next step.

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In practice, this structured approach often prevents disputes from escalating unnecessarily. A party dissatisfied with a DAAB decision may hesitate to move directly to arbitration because of its costs, length, and adversarial nature. In this context, mediation emerges as a pragmatic alternative, allowing parties to reassess their positions, preserve confidentiality, and negotiate a mutually beneficial solution without jeopardizing the project timeline.

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For example, consider a dispute where a contractor claims additional costs due to unforeseen ground conditions. The DAAB might issue a binding but not final decision awarding part of the claim. The employer, dissatisfied, issues a Notice of Dissatisfaction under Sub-Clause 21.4. Rather than rushing to arbitration, both parties agree to mediation. In just few sessions, they reach a creative settlement covering payment terms and project adjustments, preserving the project’s timeline and saving millions in arbitration costs. This example illustrates how mediation gives real substance to the “amicable settlement” requirement and is increasingly recognized as best practice in large-scale international projects.

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This is particularly relevant in international construction projects, where disputes often revolve around variations, delays, or unforeseen site conditions. Instead of litigating technical disagreements through formal channels, parties can move toward a facilitated dialogue with the DAAB’s encouragement. Many practitioners now view this sub-clause as the hinge that operationalizes mediation within the FIDIC framework, making it an essential feature of modern project dispute management and not an optional accessory.

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The insertion of mediation in the FIDIC dispute resolution ladder is not merely symbolic; it produces tangible value for all stakeholders. First and foremost, mediation helps preserve commercial and contractual relationships, restores trust and fosters cooperative problem-solving, which is indispensable when contractors and employers must continue working together until project completion.

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Mediation also significantly reduces costs and delays compared to arbitration or litigation. By resolving disagreements in weeks rather than years, parties avoid project stagnation and financial drain. This efficiency is fully aligned with FIDIC’s philosophy of ensuring that disputes do not derail the works.

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Moreover, mediation enhances the legitimacy of outcomes. Unlike arbitral awards, which impose a solution, mediated agreements are co-created by the parties themselves. This voluntary character increases compliance rates and reduces the risk of future disputes over the same issues. Within the FIDIC structure, mediation complement the DAAB’s preventive and adjudicative roles rather than competing with them.

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Ultimately, by embracing mediation at the stage opened by Sub-Clause 21.3 and solidified by Sub-Clause 21.4, FIDIC users are not simply following a procedure; they are adopting a culture of proactive dispute management. This represents a decisive step toward a more collaborative and sustainable future in the global construction industry.

The evolution from litigation and arbitration to negotiation, adjudication, and ultimately mediation reflects a broader shift in the construction industry: one toward collaboration, efficiency, and dispute prevention. Clause 21, particularly through the interplay of Sub-Clauses 21.3 and 21.4, serves as the pivotal mechanism enabling this transformation. By understanding and leveraging the DAAB and the mediation pathway, project stakeholders can not only resolve disputes effectively while fostering long-term relationships and project success. FIDIC’s approach demonstrates that the future of dispute resolution lies not in adversarial battles, but in structured, cooperative, and creative problem-solving. In this way, FIDIC not only manages disputes, but it also redefines them. The journey from dispute boards to mediation shows that in construction, collaboration is no longer just a choice; it is the new standard for success.

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One of the most challenging yet crucial tools in mediation is the questioning technique. I like to refer to it as the art of questioning because it truly reflects the skill and wisdom of a mediator. In the mediation process, the ability to ask the right questions is not just a skill but an art form that can significantly influence the outcome. Mediators play a vital role in guiding conflicting parties toward resolution, and effective questioning is at the heart of this process.

Open questions, which invite expansive responses, are instrumental in uncovering underlying interests and feelings. For instance, asking, “What concerns do you have about this situation?” encourages parties to express their thoughts and emotions freely. This exploration fosters understanding and empathy, both of which are essential components in resolving disputes.

Conversely, closed questions serve a different purpose. They help clarify facts or confirm specific details. A question like, “Did you agree on the terms of the contract?” quickly establishes a focal point for discussion. Both types of questions are essential, as they enable the mediator to navigate the dialogue effectively.

Additionally, the techniques of “chunking up” and “chunking in” can enhance questioning strategies. Chunking up involves asking broader questions to help parties see the bigger picture, while chunking in focuses on specific details to clarify misunderstandings. Together, these techniques equip mediators to facilitate meaningful conversations that lead to genuine resolutions.

In summary, mastering the art of questioning empowers mediators to create a safe space for dialogue, allowing conflicting parties to move from confrontation to cooperation. Embracing this skill not only enhances the mediation process but also cultivates a culture of understanding and collaboration.

A dispute emerged between a government body and a private education technology provider over the interpretation of a Call-Off Contract for a national pool of teachers. The government believed its termination notice ended the agreement with no further financial obligations, while the supplier insisted that six months’ notice had to be given before the next renewal date, entitling it to a full year’s fees. What began as a disagreement over contract terms quickly grew into a conflict that threatened litigation, unpaid fees, reputational harm, and a breakdown in cooperation.

To resolve this impasse, the parties agreed to mediation. Conducted online over a single day, both sides were represented by legal and commercial teams. Wolf von Kumberg, the mediator, guided the process with a facilitative and evaluative style. A joint session clarified the issues, followed by private caucuses where shuttle diplomacy allowed him to test proposals, reframe positions, and redirect the focus from legal arguments to business solutions.

Key tools played a decisive role. Issue mapping broke the dispute into manageable topics — from termination terms and payment to reputation and future relationships — revealing areas of overlap. Through option development, the parties explored creative settlement packages with different payment structures and contract scenarios. Reframing helped shift the narrative away from “who was right on the contract” toward “how to preserve value and manage risk going forward.” Positioning any payment as an act of goodwill, rather than an admission of liability, also made it possible for both sides to save face.

By the end of the day, the dispute transformed into a constructive agreement. The parties decided to terminate the existing contract from the date of the government’s notice, with a lump-sum payment equivalent to several months of licence fees. At the same time, they signed a new agreement covering a smaller number of authorities, with flexibility to expand later. A clear exit plan and data governance measures ensured compliance with GDPR and a smooth transition. Importantly, they issued a joint public statement framing the outcome as a policy shift, not a platform failure, protecting reputations on both sides.

The result was a win-win: the supplier secured guaranteed payment and preserved a valuable relationship, while the government capped its financial exposure, avoided litigation risk, and ensured continuity of service. This case demonstrates how structured negotiation, option-building, and skilled mediation can turn a contentious contractual dispute into a pragmatic, forward-looking settlement.

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A major dispute arose between a South Asian manufacturer of home appliances and a Middle Eastern distributor. The two companies had signed a contract worth USD 13.4 million for the shipment of 100,000 units. After only 30% of the order was completed, the relationship deteriorated. The distributor raised concerns about delays in the first shipments and claimed that certain units showed quality inconsistencies. On the other hand, the manufacturer accused the distributor of withholding the second installment of payment, which was clearly outlined in the contract. The disagreement escalated quickly, with both sides threatening to terminate the contract and pursue legal action, putting years of cooperation and trust at serious risk.

How the Mediation Process Was Conducted I was invited to intervene as a mediator to help prevent the collapse of the deal. My first step was to conduct separate intake meetings with both parties, during which I explained the principles of confidentiality, neutrality, and the process we would follow. Each party submitted a written statement summarizing their grievances. These initial discussions revealed the true underlying interests: the distributor was deeply concerned about its reputation in the Middle Eastern retail market if it delivered products with quality issues, while the manufacturer’s priority was ensuring steady cash flow to sustain production and avoid factory disruptions.

When the first joint session began, the distributor expressed frustration about the shipment delays and the risk of damaged credibility with its retail clients. The manufacturer responded strongly, highlighting the significant costs already incurred and the financial pressure from the withheld payment. Both sides initially used accusatory language such as unreliable and bad faith. My role was to reframe these terms into neutral and constructive concerns, translating unreliable partner into need for reliability, and bad faith into need for assurance of commitment. This shift in language helped lower tensions and allowed us to set a clear agenda around three key issues: the release of pending payments, the quality assurance process, and the timeline for completing the remaining shipments.

In the following caucus sessions, I met privately with each party. Using BATNA and WATNA analysis, I guided them through the consequences of litigation compared with negotiated settlement. Both sides realized that going to court would not only drain resources but could also jeopardize their positions in their respective markets. With this understanding, they became more open to negotiation.

During the extended joint negotiation, I introduced tools to facilitate clarity and constructive problem-solving. We developed a shared timeline map that illustrated production, delivery dates, inspection reports, and payment obligations. This visual removed much of the ambiguity that had fueled mistrust. We also used an option-generation matrix to explore different settlement structures, such as staged payments tied to third-party inspection results and revised shipment schedules. At critical moments, I employed structured silence, giving the parties space to process proposals without reacting defensively. This encouraged deeper reflection and made them more willing to explore compromise.

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Tools and Strategies That Proved Helpful:

● Reframing accusatory language into constructive needs.

● BATNA and WATNA analysis to highlight the risks of litigation versus settlement.

● Shared timeline maps to visualize obligations and deadlines.

● Option-generation matrix for structured solutions.

● Strategic use of silence to allow reflection.

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Outcome and Settlement Ultimately, the mediation produced a comprehensive settlement:

● The distributor agreed to release 50% of the pending payment, amounting to USD 2 million, within ten days.

● The manufacturer committed to replacing any defective units verifi ed by a neutral inspection agency.

● A new shipment plan was established, with 20% of the total order delivered every two months, each batch cleared through the inspection agency before payment release.

● A joint review committee, consisting of one representative from each company and an independent auditor, was created to meet quarterly.

● Both sides agreed not to make public statements about the dispute, protecting their reputations and maintaining confidence in both markets.

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The mediation concluded with the signing of a binding settlement agreement. Instead of entering a costly and uncertain legal battle, both sides preserved a lucrative business relationship. Six months later, the shipment schedule was back on track, payments were being made on time, and the distributor extended new purchase orders beyond the original contract. What began as a dispute threatening to destroy trust ultimately became an opportunity to strengthen cooperation through structured mediation.

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