Arbitration & ADR

সালিস ও বিকল্প বিরোধ নিস্পত্তি

Law firm in Dhaka

BDLP is a top arbitration law firm in Dhaka and has some of the best arbitration lawyers. Barrister Shajib Mahmood, a member of Chartered Institute of Arbitrators (UK) and the team has been praised for their skills as arbitration lawyers in Dhaka and Bangladesh. Many of the firms lawyers are members of Bangladesh International Arbitration Centre, BIAC. The firm provides arbitration representation, arrangement and enforcement of awards. We have represented clients in complex arbitrations successfully in cost effective manner. We do not charge fees to discuss potential matters and offer competitive legal fees in local and international arbitrations. Navigating commercial disputes requires a delicate balance between preserving business relationships and securing enforceable outcomes. In Bangladesh, the cornerstone of this alternative dispute resolution mechanism is the Arbitration Act, 2001. Enacted to modernize the legal landscape, the Act consolidates the frameworks governing international commercial arbitration, domestic arbitration, and the recognition of foreign arbitral awards. 

The foundational rule of the Arbitration Act, 2001 lies in its territorial scope. The provisions of the Act apply strictly when the place (or seat) of arbitration is located within Bangladesh. However, the legislature carved out a crucial exception for cross-border commercial disputes. Even if the place of arbitration is outside Bangladesh, the rules regarding the recognition and enforcement of foreign arbitral awards—specifically Sections 45, 46, and 47—still apply. This ensures that Bangladeshi courts can facilitate the execution of international awards against domestic assets. For a dispute to qualify as an "International Commercial Arbitration," it must arise out of a legal relationship considered commercial under Bangladeshi law, and at least one party must be a foreign national, a foreign corporate body, a company centrally managed abroad, or a foreign government.

Courts in Bangladesh will only recognize a mutual intent to arbitrate if it meets strict formal requirements.

• An arbitration agreement must be documented in writing.

• It can take the form of an arbitration clause embedded within a broader contract or exist as an entirely separate agreement.

• The writing requirement is satisfied if the document is signed by both parties.

• Alternatively, an exchange of letters, faxes, telegrams, emails, or other telecommunications that leave a record of the agreement also constitutes a valid written contract.

• Even an exchange of a statement of claim and a defense where one party alleges the agreement's existence and the other does not deny it validates the arbitration clause.

If a party initiates traditional litigation in court over a matter covered by a valid arbitration agreement, the opposing party can intervene. Before filing a written statement, they may apply to the court to stay the proceedings, compelling the judicial authority to refer the matter to arbitration.

Autonomy is the defining feature of tribunal formation. Parties are entirely free to determine the number of arbitrators.

• If the parties fail to specify a number, the default tribunal consists of three arbitrators.

• When parties appoint an even number of arbitrators, those appointees must jointly select an additional arbitrator to act as the tribunal's chairman.

• Unless restricted by the parties' agreement, a person of any nationality can serve as an arbitrator.

When the appointment process hits a deadlock, the courts step in to prevent the arbitration from stalling. For domestic disputes, a party can request the District Judge to make the appointment. In cases of international commercial arbitration, the Chief Justice of Bangladesh or a designated Supreme Court Judge holds the authority to appoint the arbitrator.

Arbitrators in Bangladesh operate with significant procedural flexibility. The tribunal is not bound by the rigid strictures of the Code of Civil Procedure, 1908, or the Evidence Act, 1872. Instead, the tribunal and the parties can tailor the rules of procedure, evidential matters, and the language of the proceedings to fit the specific needs of their commercial reality.

Despite this autonomy, parties frequently require urgent protective measures before a tribunal is fully constituted or during the hearings. Section 7A grants the courts the power to issue interim orders. Upon a party's application, the court (the High Court Division for international cases and the District Court for domestic ones) can issue ad-interim injunctions, appoint receivers, or order the interim custody and sale of disputed goods.

Meanwhile, the arbitral tribunal itself embodies the principle of Kompetenz-Kompetenz. Unless agreed otherwise, the tribunal has the authority to rule on its own jurisdiction, including assessing the existence or validity of the arbitration agreement.

To conclude the proceedings, the tribunal issues its final decision.

• The arbitral award must be in writing and signed by the arbitrators.

• For a multi-member tribunal, the signatures of the majority are sufficient, provided the reason for any missing signature is noted.

• The award is deemed final and binding on both the disputing parties and anyone claiming through them.

A dissatisfied party has very narrow avenues to challenge the decision. To set aside an award, an application must be filed within sixty days of receiving it. The grounds for annulment are strictly limited and include the incapacity of a party, an invalid arbitration agreement, a lack of proper notice regarding the proceedings, or the award dealing with matters outside the scope of the submission. Crucially, the court can also set aside an award if its enforcement would conflict with the public policy of Bangladesh or if it was induced by fraud or corruption.

Once the timeframe to challenge the award expires, or if a challenge is dismissed, the award transitions into an enforceable instrument. A domestic award is executed under the Code of Civil Procedure in the exact same manner as a decree of the civil court. Similarly, a foreign arbitral award is recognized as binding and will be enforced by the court as a decree, provided the applicant submits the original authenticated award and the underlying arbitration agreement.

Part of BDLP is a commercial law firm and specialise in commercial disputes and arbitration. Apart from this we also arrange and take part in private mediations in business and family disputes.

Most recently, the firm successfully represented its client in an arbitration at the Bangladesh Ministry of Commerce. The firm represented Bangladesh Association of International Recruiting Agencies (BAIRA) which is one of the biggest licensed trade organizations in Bangladesh.

We are mostly experienced in:

• Commercial Arbitration
• Full Arbitration Setup and proceedings
• International Arbitration award enforcement in Bangladesh
• Mediation in business related transactions
• Negotiations
• Family mediations (regarding divorces, child custody etc)
• Representing in Arbitrations
• Industrial Arbitrations

Interesting Judgment

The High Court Division was right in holding that the 3rd arbitrator was neither consulted nor given an opportunity by the Chairman to deliberate and express his views on the issues before making and signing the award in question.

It is a well settled principle of law that no allowance can be made for damages, which are remotely connected with the wrongful act complained of. Law makes allowance only for the direct consequences and refuses to consider any damage remotely resulting from the wrongful act.

It was incumbent upon the arbitrators to make it manifest that there was discussion between the arbitrators before the award was made but from the plain reading of the proceedings it appears that one of the arbitrators was excluded totally from the process of deliberation before the award was made.

[2010 30 BLD APPELLATE DIVISION 269]

Please contact us directly for more information on how ADR can help you in your particular situation.