Arbitration is one of the most common ways of settling a dispute between parties without having to recourse the time consuming, costly and complicated procedure of litigation. It is an excellent tool to facilitate trade and investment as it allows a speedy and cost-friendly way to settle cross-border disputes. In the early days after independence, arbitrations in Bangladesh were governed by Arbitration Act 1940. In order to rectify its shortcomings, Bangladesh enacted the Arbitration Act 2001. Under the Act of 2001, the place of arbitration is a decisive factor as to whether interim remedies ordered by national courts are available to a party or not. This Act also distinguishes between international and domestic arbitration. If one of the parties to a dispute is a foreign entity, the arbitration in question would be treated as an international commercial arbitration. On the other hand, if the disputing parties originate from Bangladesh, the arbitration in question would be treated as domestic arbitration. Section 2(c) of the Arbitration Act defines an international commercial arbitration as an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in Bangladesh, and where at least one of the parties is:

  • an individual who is a national of or habitually resident in any country other than Bangladesh;
  • a body corporate that is incorporated in any country other than Bangladesh;
  • a company, or an association or a body of individuals whose central management and control is exercised in any country other than Bangladesh; or
  • the government of a foreign country.

There is no specialist arbitration tribunal available under the Bangladeshi legal system to adjudicate commercial arbitration cases. Most of the time parties form private arbitral tribunals comprising retired justices of the Appellate Division and the High Court Division to resolve their disputes provided there is an arbitration clause in their agreement. Once an arbitral tribunal passes an award, the aggrieved party has the option to initiate proceedings to set aside the award. One or two single benches of the High Court Division are provided with the jurisdiction to try international commercial arbitration cases filed under the provisions of the Arbitration Act.

Our expert team members has dealt a lot of arbitration matters on behalf of our client.