Arbitration Process in Bangladesh

1 · 09 · 24

It is becoming more apparent that arbitration is the technique of dispute resolution that is most suited for business individuals in Bangladesh. The Arbitration Act of 2001 is the primary piece of legislation that governs the arbitration procedure in Bangladesh. Based on the UNCITRAL Model Law, the Act was drafted.

In accordance with the provisions of Section 3(1) of the Arbitration Act 2001, the Act is applicable where the location of the arbitration involves Bangladesh. On the other hand, it is important to point out that the Act of 2001 is not the first Act in Bangladesh that is associated with arbitration. Previously, the Arbitration Act of 1940 was the overarching legal framework that controlled arbitration in Bangladesh.

Arbitration takes place in what manner?

Legislative Prerequisites

Agreement amongst Arbitrators:If the court is satisfied that an arbitration agreement is in place, then it will only let the parties to settle their disagreement via the process of arbitration. It is required that an arbitration agreement be written down, and it might take the form of a separate agreement or an arbitration provision that is included in a contract.

Cases in which an arbitration agreement is invalid: In the event that the court determines that the arbitration agreement is invalid, ineffective, or incapable of being resolved by arbitration, then it will not submit the parties to the arbitration process. The following is an example of what an arbitration provision should look like: “Any and all claims and disputes that arise under or in relation to this Agreement shall be settled by arbitration.”

Breaking up the arbitration deal or clause: In the case that the court concludes that the arbitration agreement is invalid, ineffective, or incapable of being addressed via arbitration, then it will not submit the parties to the process of arbitration so that the dispute may be resolved by arbitration. As an illustration of what an arbitration clause ought to look like, consider the following: Any and all claims and disputes that arise under or in relation to this Agreement shall be settled by arbitration.

Needs for procedures

General rules for how to do things

When you get notice, the arbitration process begins: In the event that a dispute develops that is subject to arbitration in accordance with the arbitration agreement and if a party has received an arbitration notification from the other party, the arbitral procedures will be considered to have been initiated.

Concerning the arbitral tribunal’s authority: During the course of the practice, it is often seen that the parties do not include a provision or agreement about arbitration that is unequivocal and clear.

As an instance, if the parties to the agreement state that “a dispute’may’ be resolved by arbitration” rather than “a dispute’shall’ be resolved by arbitration,” then it is possible that objections will be made about the jurisdiction of the arbitral tribunal.

It is possible to determine the answer to this issue by submitting the case to the High Court Division. Upon the request of any of the parties to the arbitration agreement, the High Court Division has the authority to decide any dispute regarding the jurisdiction of the arbitral tribunal. This authorization is granted only after the notice has been sent to all of the other parties.

Sending in facts to back up claim: Within the time frame that has been established by the tribunal, the claimant is required to provide the facts that support his claim, the issues that are in dispute, and the relief or remedy that is being sought.

On the other hand, the respondent is required to present his defense in regard to these particulars, unless the parties have agreed to anything else.

Guidelines for the process of choosing and putting together judges

Freedom to pick your own arbitrators: When it comes to the determination of the members of the arbitral tribunal, the parties have a considerable lot of leeway. According to subsection 11(1) of the Arbitration Act of 2001, they have the authority to decide the number of arbitrators at their disposal.

Not only that, but the parties are not obligated to adhere to a predetermined process when it comes to the appointment of the arbitrators. The parties are free to come to an agreement about the process that will be used to choose the arbitrator or arbitrators.

Choosing a referee by the district judge: If the parties cannot agree on arbitration within 30 days of one party requesting it from the other, the District Judge will appoint the arbitrator at a party’s request.

In addition, if a party fails to act as required under an appointment procedure agreed upon by the parties, the parties, or the arbitrators fail to reach an agreement under the same procedure, or a person or third party fails to perform any function assigned to him under that procedure, a party may take other measures to secure the appointment.

Objecting to the choice of an arbitrator: An arbitrator may be challenged on specific grounds. If an arbitrator lacks the parties’ agreed-upon credentials or raises reasonable questions about his independence or impartiality, he may be challenged.

Recognizing and following through on a court award

  1. A final and binding arbitral award: An arbitral tribunal’s award under an arbitration agreement is final and binding on the parties and any claimants.
  2. Challenge the arbitral decision: Certain actions may be taken against an arbitral decision. A party may apply to the Court within 60 days of receiving the award to set it aside. Numerous reasons exist for overturning an arbitral ruling. An arbitration award may be thrown aside if a party was incapacitated. Challenges to arbitral awards must be filed within 60 days. If this time limit expires or the application is denied, the award will be enforced under the Code of Civil Procedure as a Court decision. Thus, the arbitral judgment is binding like a court ruling.

Acceptance and enforcement of a foreign arbitration award

Upon the application being made to it by any party, a foreign arbitral award shall be enforced by execution by the Court in the same way as if it were a decree of the Court. This action shall be taken after the application has been made. Since this is the case, a foreign arbitral award is recognized in Bangladesh in the same manner as a national arbitral award.

In what papers must they be presented: In order to be considered for the execution of a foreign arbitral award, an application must be accompanied by the original or a copy of the arbitral award, the original or a certified copy of the arbitration agreement, and any documentation that may be required to demonstrate that the award is a foreign award.

Reasons why praise should not be given: A foreign arbitral award may be rejected by the court for a variety of reasons, depending on the circumstances described. In the event that the arbitration agreement is not legal according to the legislation that the parties have submitted it to, for instance, the award that was rendered by the arbitrator could not be recognized.

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