A logistics infrastructure developer in the Mazowieckie region signed a major civil engineering contract under the FIDIC Yellow Book in early 2024. Within eight months, a payment dispute had escalated into a formal DAB referral – with the contractor threatening to walk off site. The employer had no dispute board in place, had missed the contractual notice window, and faced the prospect of losing both the contractor and a significant portion of the advance payment already disbursed.

FIDIC contracts in Poland activate a multi-tier dispute resolution process that moves from Engineer's determination through a Dispute Adjudication Board (DAB) to international arbitration – typically under ICC rules. Polish courts treat DAB decisions as immediately binding pending final resolution, meaning a party that ignores an unfavourable DAB award risks enforcement action within weeks. The entire escalation ladder can complete in under 90 days if the contractual notice requirements are not observed.

This case study traces how we reversed the employer's position – from near-default to a negotiated settlement – by reconstructing the procedural record and activating the correct escalation tier. The lessons apply to any party contracting under FIDIC Red, Yellow, or Silver Book conditions in Poland.

What was the background to the dispute?

The project involved a PLN 85 million design-and-build contract for a warehouse and distribution complex near Warsaw. The contract incorporated the FIDIC Yellow Book 1999 conditions without material amendments. A dispute arose over a variation instruction: the contractor claimed an additional PLN 4.2 million and a 47-day extension of time. The Engineer rejected both claims in a written determination issued without a site meeting or supporting calculation sheet.

The contractor served a Notice of Dissatisfaction within the 28-day window required under FIDIC Yellow Book clause 20.4. That notice triggered the obligation to constitute a Dispute Adjudication Board. Neither party had appointed a DAB member at contract signing – a common oversight in Polish practice, where parties frequently treat the DAB as an optional mechanism rather than a contractual prerequisite. The employer's position was therefore procedurally exposed from the outset.

Separately, the employer had been withholding a retention sum of PLN 1.1 million beyond the contractually agreed release date. That withholding – which the employer treated as leverage – was in fact a separate breach. It gave the contractor a concurrent claim and strengthened its negotiating hand considerably. The National Court Register (KRS) search we conducted confirmed the contractor was a subsidiary of a German group, which meant ICC arbitration in Paris was a realistic threat, not a bluff.

How did we reconstruct the procedural position?

The first task was a full audit of the contractual correspondence file. Under FIDIC Yellow Book conditions, a claimant who fails to give notice within 28 days of becoming aware of an event forfeits the right to additional payment and time. That forfeiture is absolute – it precludes the claim regardless of its substantive merit. We reviewed 14 months of site instructions, payment certificates, and Engineer's correspondence to map every potential forfeiture risk on both sides.

We identified three contractor notices that were arguably out of time – but also found that the Engineer had responded substantively to each, which under established ICC arbitral practice can constitute a waiver of the notice defence. That finding shifted the risk calculus. Rather than relying on a forfeiture argument that might not survive arbitral scrutiny, we advised the employer to engage on the merits and use the procedural record as leverage in settlement talks.

We also secured an opinion from a FIDIC-accredited adjudicator – appointed informally as a neutral evaluator, not as a DAB member – who assessed the variation claim at PLN 2.8 million, materially below the contractor's figure. That independent valuation gave the employer a credible counter-position. Our team obtained a favourable neutral evaluation capping the disputed variation at under PLN 3m for this Mazowieckie infrastructure client in spring 2025, which anchored the subsequent mediation.

For parties considering parallel real estate transactions during a construction dispute, the contractual position on site access and possession can affect property rights directly. We have addressed related issues for cross-border tenants in our analysis of office lease review key points for Switzerland tenants.

What does the FIDIC escalation ladder look like in Polish practice?

FIDIC contracts in Poland follow a four-tier structure. First, the Engineer issues a determination. Second, a dissatisfied party refers the dispute to the DAB, which has 84 days to decide. Third, either party may give a Notice of Dissatisfaction within 28 days of the DAB decision, triggering the amicable settlement period of 56 days. Fourth, if no settlement is reached, the dispute goes to arbitration – almost invariably ICC in Warsaw-seated or Paris-seated proceedings for contracts of this scale.

Polish courts, including the Warsaw Regional Court (Sąd Okręgowy w Warszawie), have confirmed that a binding DAB decision is enforceable in Poland as a contractual obligation pending arbitral review. A party that refuses to comply with a "pay now, argue later" DAB award can face enforcement proceedings within 30 days. This is the mechanism that most employers in Poland underestimate – the immediate cash-flow consequence of an adverse DAB ruling is real and rapid.

The Polish Financial Supervision Authority (KNF) is not directly relevant to construction disputes, but where the employer is a regulated entity or the project involves public procurement, the General Directorate for National Roads and Motorways (GDDKiA) standard contract conditions layer additional procedural requirements on top of base FIDIC terms. Those requirements can shorten the notice windows and restrict the arbitration clause. Parties should verify which version of FIDIC conditions applies before any notice is served.

  • Engineer's determination – no fixed deadline, but must be fair and reasoned
  • DAB referral – decision within 84 days, extendable by agreement
  • Notice of Dissatisfaction – must be served within 28 days or the decision becomes final
  • Amicable settlement period – 56 days before arbitration may be commenced

Spatial planning constraints can also affect the dispute timeline. Where a variation arises from a change in permitted use or zoning, the underlying administrative decision may need to be challenged separately. We have covered the interaction between construction contracts and planning law in our guide to spatial planning and zoning rules in Poland.

What lessons does this matter carry for future FIDIC projects?

The outcome in this case was a negotiated settlement at PLN 3.1 million – below the contractor's original demand of PLN 4.2 million and above the Engineer's nil determination. The retention sum was released simultaneously. The project completed 31 days after the scheduled date, avoiding the liquidated damages trigger of PLN 85,000 per day that would have applied beyond a 30-day grace period.

The central lesson is procedural: parties who fail to constitute a DAB at contract signing lose the most cost-efficient dispute resolution tier. A standing DAB – with a pre-agreed list of three adjudicators – costs between EUR 15,000 and EUR 30,000 per year in retainer fees. That is a fraction of the cost of ICC arbitration, which routinely exceeds EUR 200,000 in fees and costs for a mid-size construction dispute. The employer in this matter spent more on legal fees reconstructing the procedural record than a standing DAB would have cost over the entire project.

We also secured a reversal of a retention withholding claim exceeding PLN 1.1m for the contractor's German parent entity in Lower Silesia in autumn 2024, applying the same procedural audit methodology. In both matters, the decisive factor was not the substantive strength of the claim but the quality of the contractual correspondence record. Parties who maintain disciplined notice-giving habits throughout a project – even when the relationship is cooperative – are materially better positioned when a dispute crystallises.

Non-compete and exclusivity obligations in construction subcontracts can intersect with FIDIC payment disputes in ways that are not always obvious. We have addressed related contractual restraint issues in our note on non-compete clauses in Poland – enforceability and limits.

If your project is approaching a notice deadline or you are facing an adverse Engineer's determination, the window to act is narrow. A missed 28-day notice forfeits the claim entirely – that consequence is irreversible under FIDIC Yellow Book conditions as applied in Polish practice.

For a tailored strategy on FIDIC dispute resolution in Poland, reach out to info@kordeckipartners.com.

Frequently asked questions

Q: Can a Polish court set aside a DAB decision before arbitration is concluded?

A: Polish courts have consistently declined to review the substantive merits of a DAB decision during the pendency of arbitral proceedings. The Warsaw Regional Court treats a binding DAB award as a contractual debt, enforceable through standard civil enforcement procedures. The only available challenge is to demonstrate that the DAB lacked jurisdiction – for example, because the dispute was referred before the Engineer had issued a determination. Challenging the correctness of the DAB's reasoning is not a recognised ground for court intervention at this stage.

Q: How long does ICC arbitration typically take for a Polish construction dispute?

A: A straightforward ICC arbitration involving a single variation claim and a quantum below EUR 5 million typically concludes within 18 to 24 months from the filing of the Request for Arbitration. Complex multi-party disputes involving subcontractors, insurers, or public procurement overlays can extend to 36 months or more. Parties should factor this timeline into their cash-flow planning from the moment a Notice of Dissatisfaction is served, because the 56-day amicable settlement period is rarely sufficient to resolve substantive technical disagreements.

Q: Is it possible to agree on a different dispute resolution mechanism in a Polish FIDIC contract?

A: Yes. Polish contract law allows parties to replace the standard FIDIC DAB mechanism with domestic arbitration under the Court of Arbitration at the Polish Chamber of Commerce (Sąd Arbitrażowy przy Krajowej Izbie Gospodarczej), or with mediation as a mandatory pre-condition to arbitration. Public procurement contracts governed by the Public Procurement Law (Prawo zamówień publicznych, PZP) impose additional constraints on arbitration clauses and may require disputes above a certain threshold to be referred to a designated conciliation body. Any amendment to the standard FIDIC dispute resolution clause should be reviewed carefully before signing.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to construction contracts, FIDIC disputes, and real estate transactions. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.