Assignment

On
“Some ways of making alternative dispute resolution
(ADR) as a more resorted to method of resolving
business-related disputes in Bangladesh”

Course: BUS518.2 – Business Law & Ethics

Faculty: Md. Rizwanul Islam

Student ID: 5140660

Student Name: Khaled Bin Shahabuddin
Date: 24 August 2019
Alternative Dispute Resolution (ADR) is considered as an alternative method to litigation outside
the courtroom. Globally, it is gaining popularity and acceptance among the masses and legal
personalities due to its many advantages over the legal processes. Courts in many countries are
now requiring parties to resort to ADR before permitting the parties’ cases to be tried. For
example, European Mediation Directive, 2008. In recent years, Bangladesh also gives emphasize
on ADR to avoid the use of contested hearings in the formal litigation.

Bangladesh, one of the most populous countries in the world has a population of 163.05 million
who has more than 3.5 million cases are now pending with the higher and lower courts across the
country. Among them, 1.3 million civil cases are pending at lower courts only. Statistics suggests
that the number will go up to around 5 million by 2020 where there is only 1 judge for around
2,000 cases. In this aspect, we can change this notion of “Justice delayed is justice denied” if we
can make ADR as a method of resolving disputes.

However, Bangladesh is gradually walking towards the right track by adopting ADR in many
cases. For example, The Arbitration Act 2001, the Code of Civil Procedure (Amendment) Act
2003, the Money Loan Court Act (Artha Rin Adalat Ain) 2003, The Income Tax Ordinance,
1984, The Value Added Tax Act, 1991 and the Bangladesh Energy Regulatory Commission Act
2003 are among the important legal reforms already in place for effective ADR practices in
business and commercial disputes. Besides that, our civil procedure code makes it mandatory for
the court to try ADR before proceeding for trial.

Moreover, there is an institution named Bangladesh International Arbitration Centre (BIAC)

working for applying ADR best practices in all possible cases. Recently, its founder chairman
Mahbubur Rahman was appointed as an arbitrator of the China International Economic and
Trade Arbitration Commission (CIETAC) - the first Bangladeshi to have that role. So, we can
say that we already have international standard ADR specialist in Bangladesh.

Furthermore, there are now many law firms who are giving legal services as well as ADR
comprising arbitration, mediation, negotiation, conciliation. For example, Rahman's Chambers.
They give ADR support on construction, banking, power sector etc. business enterprises
disputes. Already, they have filed several execution suits to execute the arbitral awards in the
local court.
So, we have seen many success stories of resolving business-related disputes through ADR in
recent years in Bangladesh. For example, through ADR, Infrastructure Development Company
Limited (IDCOL) able to get recovery of outstanding dues against Bhelabazar Shamaz Unnayan
Sangstha (BSUS) and Kamrul Bio-Gas & Compost Fertilizer Research Development Company
Limited.

Also, the VAT claims by the National Board of Revenue (NBR) to Grameen Danone Foods Ltd
was resolved with the help of facilitator under ADR mechanism of VAT Act 1991. Also, a very
sophisticated dispute was resolved recently with the help of negotiation, the central bank of
Bangladesh was able to recover involving a million dollar dispute of a national payment switch
throughout the country by a Singaporean IT Company.

Hence, we have a lot of opportunities of resolving business-related disputes in Bangladesh

through ADR which will ensure the parties win-win situation; not win-lose situation happened in
the formal legal proceedings. For example, our banking sector is suffering from a huge amount
of non-performing loans amounted total 1,10,873.54 crore BDT. So, to resolve these default
loans, we may use ADR as an alternative method to reduce the number of cases and recover the
dues receivable to a tolerable level.

Moreover, this year we have seen an unprecedented scenario in the raw leather industry i.e. price
fall of raw leather. Because, tanners owe over Tk. 3 billion unpaid bills in last three years to the
rawhide leather merchants. Here, ADR can play a very promising role to resolve disputes
between them.

As Ready Made Garments (RMG) sector contributes country’s more than 80% export revenue,
there are so many business-related disputes arise between the parties which are all foreign. In this
aspect, ADR is an effective method to resolve those disputes in a speedy manner.

Nevertheless, there are some challenges also in the path of ADR. For example, while BTRC’s
audit claim was Grameenphone has Tk. 12,579.95 crore pending, BTRC ruled out any possibility
of arbitration to settle disputes whereas, Grameenphone wanted to resolve the disputed audit
demand through a constructive arbitration process under the Arbitration Act, 2001. Hence, it
shows that both parties need to be positive about ADR to resolve disputes between them. For
this, we need to add this arbitration clause in the contract for any dispute arises.
Another challenge is often people allege that lawyers discourage their clients to resolve disputes
through ADR as they fear it will reduce their income.

However, many law firms, BIAC etc. are working hard to handle business-related disputes to
resolve through ADR mechanism. So, hopefully, if we can successfully make ADR popular, we
will be able to reduce the huge backlogs of commercial cases and also prevent the accumulation
of further backlogs. Most importantly, it will reduce the cost of doing business and legal
uncertainties in Bangladesh which is very important for the growth of our economy.

References:

1. https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+a
nd+events/news/adr_bangladesh
2. https://bdnews24.com/business/2019/08/14/decision-to-allow-rawhide-export-delights-
merchants-disappoints-leather-entrepreneurs
3. https://www.dhakatribune.com/business/banks/2019/06/10/bad-loans-up-by-tk17-000cr-in-
three-months
4. https://www.thedailystar.net/business/alternative-dispute-resolution-can-help-reduce-bad-
loans-1609063
5. http://www.theindependentbd.com/post/206412
6. https://www.thedailystar.net/country/news/more-3582-lakh-cases-now-pending-law-minister-
bangladesh-1758820
7. http://thefinancialexpress.com.bd/views/adr-to-help-ease-the-process-of-legal-framework-
1551543097
8. https://www.thedailystar.net/business/alternative-dispute-resolution-order-the-day-1543198
9. https://en.wikipedia.org/wiki/Alternative_dispute_resolution
10. http://journal.library.du.ac.bd/index.php?journal=DULJ&page=article&op=viewFile&path[]=143
0&path[]=1370
11. https://rahmansc.com/alternative-dispute-resolution/
12. http://www.iosrjournals.org/iosr-jhss/papers/Vol20-issue12/Version-4/F0201244555.pdf
13. http://bdlawdigest.org/adr-and-mediation-in-bangladesh.html
14. https://www.blast.org.bd/content/publications/ADR-Mediation.pdf