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H
24,4
Enforcement of foreign arbitral
awards concerning commercial
disputes in Bangladesh
274 A brief overview
Nour Mohammad
BGC Trust University Bangladesh Chittagong, Chittagong, Bangladesh, and
Rakiba Nabi
Faculty of Law, University of Chittagong, Chittagong, Bangladesh
Abstract
Purpose – The purpose of this paper is to focus on some of the issues and problem of
implementation of foreign arbitral awards in Bangladesh.
Design/methodology/approach – Based upon theoretical sources and empirical data, the legal
provision concerning the enforcement of foreign arbitral awards was studied and the case-law
invoking the Arbitration Act 2001 discussed.
Findings – The finding of this research is to present the new framework of arbitration law in
Bangladesh which came into force 10 April 2001 and discuss the legislative provision in the face of
increasing foreign investment in Bangladesh in various sector.
Research limitations/implications – The principal objectives were to study the general context of
the arbitration mechanism in international commercial disputes.
Practical implications – The rationale for arbitration in international commercial disputes and the
imperatives for resorting to arbitration as a tool for alternative dispute resolution are discussed.
Originality/value – This paper is an attempt to analyze how a foreign arbitral award is enforceable
in Bangladesh and to what extent the recent legal development is effective in resolving international
commercial disputes.
Keywords Bangladesh, Contract law, Legal arbitration, International trade
Paper type Case study

1. Introduction
A state often enters into various types of contractual relations with foreign private
parties such as oil and mineral concessions, joint ventures, production-sharing
contracts, contracts of works, technical assistance contracts, agricultural and
manufacturing concessions, transfer of technology, licensing contracts etc. It is the
usual phenomenon that both the parties will perform their obligations as per the terms
of contract. Again, it is also typical that dispute may arise out of breach of contract.
Parties in that case may agree to refer the dispute to arbitration. The validity of
arbitration proceedings originates from either the contractual agreement covering an
arbitration clause or a separate dispute settlement agreement to that matter.
An arbitration award is a determination on the merits by an arbitration tribunal in an
arbitration proceeding, and is analogous to a judgment in a court of law.
Although arbitration awards are characteristically an award of damages against a
party, tribunals usually have a range of remedies that can form a part of the award.The
tribunal may order the payment of a sum of money (conventional damages), make a
Humanomics
Vol. 24 No. 4, 2008
pp. 274-284 The authors wish to thank Dr Imtiaz Omar, Professor of Law, University of New England,
# Emerald Group Publishing Limited
0828-8666
Australia and Dr Abdullah Al Faruque, Associate Professor, Department of Law of Chittagong
DOI 10.1108/08288660810917150 University for suggesting the topic and valuable comments.
declaration, order injunctive relief, specific performance of a contract, the rectification, Enforcement of
setting aside or cancellation of a deed etc. If it is a foreign arbitral award or where there foreign arbitral
is involvement of two states or foreign nationals or companies, the question arises how
it will be enforced? Whether domestic court in this regard is the machinery of awards
implementation and how enforcement mechanism is governed is the main determining
factor to be considered. The principal purpose of this paper is to present the new
framework of arbitration law in Bangladesh in a historical, analytical and critical way.
The focus will be on how a foreign arbitral award is enforceable in Bangladesh and to
275
what extent the recent legal development is effective in resolving international
commercial disputes.
The first part of the paper reviews the general context of the arbitration mechanism
in international commercial disputes. This is followed by a discussion on the rationale
for arbitration in international commercial disputes, and the imperatives for resorting
to arbitration as a tool for alternative dispute resolution (ADR). Following these parts
of the paper, the legal framework in Bangladesh relating to enforcement of foreign
arbitral awards is presented in detail. In this backdrop, case-law invoking provisions of
the Arbitration Act 2001 is discussed and analyzed. The problems and issues of
implementation of foreign arbitral awards are mooted in the succeeding part of the
paper. The concluding part of the paper dwells upon the impact of the Arbitration Act
2001, and the need for development in this regard.

2. Enforcement of foreign arbitral award- a conceptual analysis

The increase and reliance on international arbitration to resolve commercial disputes
has become a significant innovation in the dispute resolution process world-wide.
Usually, it is the court of a particular country, which enforces a foreign arbitral award.
The guiding principles for such enforcement derive either from some international
conventions, statutes etc., or from the country’s national law. On the same token,
certain mandatory rules are necessarily applicable where the parties have failed to
settle the choice of law to that matter. Available international conventions are adopted
by the State-parties to receive the advantage of arbitration i.e. the enforceability of the
award, e.g. Convention on the Recognition and Enforcement of Foreign Arbitral
Awards, 1958 (New York Convention), International Center for Settlement of
Investment Disputes (ICSID) Rules of Procedure for Arbitration Proceedings, 1966,
UNCITRAL Arbitration Rules, 1976, WIPO Arbitration Rules, 1966 etc.
About 129 countries subscribe to the New York Convention[1]. The Convention
requires courts in subscribing countries to enforce arbitration awards as if the awards
were made in that country, subject to limited grounds on which enforcement may be
refused. As with the enforcement of the arbitration provision, it may be anticipated
that recognition or enforcement of the award may become necessary as the result of
relationships, commercial or otherwise, with parties who were strangers to the
arbitration proceedings. The New York Convention applies if three basic requirements
are met[2]:
(1) The award arises out of a legal relationship.
(2) The relationship is commercial in nature.
(3) The award arises out of a relationship not entirely domestic in scope.
When drafting the arbitration clause, one of the most fundamental questions is
selection of the situations to ensure enforcement of the award. The award should
H indicate the existence of the arbitration agreement, which, under the New York
24,4 Convention, must be in writing. Although only the tribunal has authority to decide the
dispute and its award is final and binding, only the courts have the compulsory power
to enforce the arbitral award under the Convention. In particular, once the award is
made, the tribunal making it no longer exists. The courts then have primary
jurisdiction to complete the recognition and enforcement process or to set aside the
award. Under the New York Convention, a foreign award is recognized and enforced in
276 any state signatory. The ICSID Convention also provides for the recognition and
enforcement of foreign arbitral awards[3].
Direct applicability of these Conventions depends on whether the parties ratify these
instruments and agree to choose the applicable law. No clause apparently or indirectly
laid down in contract concluded by both sides recognizes an applicable law. The
parties consent to choose a definite foreign substantive law as an applicable law as
governing the contract concluded between the parties concerned. So, it depends on the
autonomy of the party. Thus, the parties may select the national law of the host state,
the general principles of law, international law of contract, the lex mercatoria, public
international law or a combination of these sources of law. The problem of ascertaining
the proper law is more complex in the case of contracts than in any other case. In the
case of a contract, there may be a multiplicity of inter-connected factors: These may be
identified as follows:
. the place where a contract is entered into;
. the place of its performance;
. the domicile, nationality or business place of the parties; and
. the subject matter of the contract, and other related factors (Cheshire et al., 1970,
p. 198).
In deciding on the choice of law, the national courts proceed through two stages:
. the court will apply the law of the forum (lex fori) to all procedural matters
(including, self-evidently, the choice of law rules); and
. relevant states applies the laws that have the greatest connection, e.g. the law of
nationality (lex patriae) or domicile (lex domicilii) will define legal status and
capacity, the law of the state in which land is situated (lex situs) will be applied to
determine all questions of title, the law of the place where a transaction
physically takes place or of the occurrence that gave rise to the litigation (lex loci
actus) will often be the controlling law selected when the matter is substantive,
but the proper law has become a more common choice.

3. Rationale and imperatives for arbitration in international commercial

disputes
Litigation in the courts of one’s own country is expensive, lengthy and unpredictable;
litigation in foreign courts is commonly more so. Domestic courts may not readily
enforce judgments from foreign courts. It is natural that parties to international
contracts will suspect the national courts of the other contracting party, dislike the
costs and delays associated with litigation and lament the breakdown in business
relationships. The arbitral process is generally less coercive and invasive than
litigation, since comparatively little discovery and pre-hearing proceedings are
involved. It is usually more flexible and adaptable to the needs of the parties and the
individual dispute. Arbitral proceedings and awards are confidential. The parties Enforcement of
themselves can make a selection of knowledgeable neutrals. Delay and cost to the
parties are less. The principle advantages of arbitration, one of the modes of ADR in
foreign arbitral
commercial disputes, are: awards
. A significant reduction in cost.
. A reduction in delays.
. The preservation of existing commercial relationships and market reputation.
277
. A greater range of settlement solutions than those offered by litigation.
. More efficient use of judicial resources (Mahbub, 2005, p. 65).
In the context of Bangladesh, judicial system is blocked by a huge backlog of suits and
cases. The backlog of cases causes wearying delays in the adjudicative process, and
over-burdens the Bangladesh judiciary (Alam, 2000).
The present rate of disposal of cases is a bit alarming, and is not at all conducive to
meet the ends of justice. It is prejudicial to the rule of law and is damaging the
economic growth of the country. Commercial cases involving tens of crores of taka are
pending in different courts across Bangladesh (Mahbub, 2005, p. 16).
These cases are pending for years together due to various problems associated with
the complicated legal system, delay in disposing of such cases. It has been the
government’s plan to introduce an arbitration mechanism to resolve all money suits to
reduce the time of resolving such cases from 10/12 years to 6/9 months to the greater
benefit of parties concerned, and for boosting the national economy (Mahbub, 2005, p. 16).
So, at present there is no option for the Bangladesh judiciary to resolve the problems
currently, it faces but to make institutional arrangement for the availability of the
system of arbitration procedure in addition to the formal dispute resolution system.
Commercial arbitration is an expeditious and harmonious method by which one or
more individuals familiar with the trade practices resolve the disputes. This device
works very well in business disputes where a continuing relationship exists between
the parties and the parties want the matter to be dealt with privately.

4. Legal provisions relating to enforcement of foreign arbitral award

In Bangladesh, the new arbitration law, the Arbitration Act 2001, came into force on 10
April 2001. This new Act repealed the previous Arbitration (Protocol and Convention)
Act 1937, and the Arbitration Act, 1940. The new Act was amended in 2004 in certain
respects and supplementary legislative provisions were included in the face of
increasing foreign investment in Bangladesh in various sectors, especially in natural
gas and power, and the growing international export trade.
The Arbitration Act 2001 of Bangladesh is principally based on UNCITRAL Model
Law, supplemented with some unique provisions derived from the Arbitration and
Conciliation Act, 1996 (India) and some from the Arbitration Act, 1996 (UK)[4].The
Arbitration Act is equally applicable to international commercial arbitration, foreign
arbitral award and the domestic arbitration as well. It thus creates a distinct and
unified legal regime for arbitration in Bangladesh. This legislative innovation has
modernized the commercial dispute resolution process in Bangladesh, and has made it
an attractive place for foreign investment, and domestic industrial and commercial
activities.
In the Arbitration Act 2001, Chapter (X), comprising sections 45, 46 and 47,
incorporate very important provisions relating to recognition and enforcement of
H foreign arbitration awards. According to these provisions, any foreign award shall be
24,4 binding upon the parties, and may be relied upon by any of the contractual parties in
any legal proceedings in Bangladesh by way of defense or set off. Some limitations are
however recognized here. According to the Act, upon an application made to the Court
of the District Judge, Dhaka, by any party, a foreign arbitration award is to be executed
in accordance with the relevant provisions of the Code of Civil Procedure 1908 as if it
278 were a Decree of the Court[5].
The speed at which an arbitral tribunal may be set up for the resolution of
commercial disputes in Bangladesh depends on the rules chosen by the parties. If the
parties have not agreed to a set of rules, the default rules under the 2001 Act apply.
Under these rules, and where an international commercial arbitration is concerned,
there are two possible courses of action[6]:
(1) If the arbitration is before a sole arbitrator and parties cannot agree on the
arbitrator within thirty days of the notice of arbitration then upon request by
one of the parties, the appointment will be made by the Chief Justice.
(2) If the arbitration is before the three arbitrators, each party selects one
arbitrator and the two arbitrators select the third. If the two arbitrators cannot
agree on the third arbitrator within 30 days of their appointment, then, upon
request by one of the parties, the Chief Justice will make the appointment.
Refusal to recognize or to enforce a foreign arbitration award may be made on any of
the grounds (procedural defects)[7]:
. that a party to the arbitration agreement was under some legal incapacity; or
. that the arbitration agreement was not valid under the law; or
. that the party was not given any notice of appointment of the arbitrator or of the
arbitral proceedings and was unable to present his case; or
. that the decisions of the award are on inseparable matters beyond the scope of
the arbitral reference; or
. that the composition of arbitration tribunal was not in accordance with
arbitration agreement or law of the country where the arbitration took place; or
. that the award is suspended or set-aside by the competent authority of the
country where the award was made; and
. that the dispute is not capable of settlement by arbitration under the law or is
opposed to the public policy in Bangladesh.
Under the provisions of the Arbitration Act 2001, the Government of Bangladesh may,
by Gazette Notification, declare a state to be specified state so as to exclude the
applicability of the provisions of recognition and enforcement with regard to the
foreign award made in the territory of such specified state. The Arbitration Act, (2001).
In addition, if the aggrieved party in the arbitration proceedings is dissatisfied with the
award, section 48 of the Act provides for appeal only to the High Court Division (HCD)
of the Supreme Court of Bangladesh. The appeal lies against certain specific orders
passed by the Court of District Judge, including award refusing to recognize or enforce
any foreign arbitral award. The HCD has been vested the ultimate power to oversee the
enforcement of foreign arbitral award.
5. Two case studies in enforcement of foreign arbitral award Enforcement of
Before the adoption of the Arbitration Act 2001, arbitration cases in Bangladesh have
been few and far between. This position seems to have changed since the coming into
foreign arbitral
force of the new Act. Two significant decisions of the HCD in Bangladesh are awards
illustrative of the new growth of commercial arbitration in Bangladesh. These are the
decisions in Bangladesh Oil, Gas and Mineral Corporation (Petrobangla) v. Saipem SPA
(Petrobangla case)[8] and Uzbekistan Airways and Another v. Air Spain Ltd[9].
279
5.1 The Petrobangla case
In the Petrobangla case, the petitioner, Petrobangla, entered into a contract with the
respondent for installation of a pipeline of about 205 km under the Second Gas
Development Project of the government of Bangladesh. The agreement provided for
arbitration clause under the Rules of Arbitration and Conciliation of the International
Chamber of Commerce (ICC). The clause required that the arbitration be held at Dhaka
and that Bangladesh Law would govern the arbitration. In the course of execution of
the contract, dispute arose between the Petrobangla and Saipem, resulting in the
initiation of arbitration proceedings.
Before the Arbitration Tribunal, the petitioner contested claims of sums of money
totaling 7,421,234.50 and Taka 121,958,483.00 under the various heads. This becomes
the subject of controversy, but the petitioner’s objections were overruled by the
Arbitration Tribunal. The petitioner also made a plea for cross-examining a witness of
the respondent. This request was denied; instead a written statement was admitted
into evidence by the Arbitration Tribunal.
The petitioner then filed a miscellaneous arbitration case in the Sub-Judge Court,
Dhaka. In due course, the court, by its order and judgment, allowed the case and
revoked the authority of the Tribunal to proceed with the case then pending before it.
Petrobangla had also prayed for temporary and ad-interim injunction to restrain the
respondent from proceeding with the ICC arbitration case but the trial court refused the
prayer of injunction. The petitioner then preferred an appeal before HCD. The HCD
allowed the appeal and also issued an order of injunction restraining the respondent
from proceeding with said case.
The award was made in disregard of the ruling of the HCD. Lawyer for the
petitioner submitted that the award was not maintainable in law inasmuch as no
opportunity was given to the petitioner to present its case and the petitioner was
denied a written transcript of the proceeding despite its repeated requests. It was also
submitted that the Arbitration Tribunal appeared to have abused its discretion and
indulged in illegality and impropriety in giving the award against the petitioner
without directing the respondent to provide the information regarding insurance and
ignoring the effect of such insurance payments in calculating the amounts under the
award. The award was therefore not an award in the eye of law and thus a non est. A
non-existent award could neither be set aside nor could it be enforced.
The Petrobangla case was not directly related with the enforcement of foreign
award in Bangladesh. But it raised some crucial issues that can be characterized as
significant dimensions of arbitration law, both national and international. As the ICC
Arbitration Tribunal refused to accept certain documents of Petrobangla, prevented to
present their case and denied a written transcript of the same, they filed a petition to
the HCD for injunction connected with stay of proceedings. Both parties had agreed
that the place of arbitration would be at Dhaka and settled that Bangladeshi law would
be the legal framework for arbitration. The question that arose was whether HCD had
H jurisdiction to stop international arbitral proceedings. The answer is that within the
24,4 ambit of section 7 (a)(1) of the 2001 Act, the HCD has been vested with the power to
issue ad interim injunction during the continuance of the proceedings under section 44
or 45 in case of international commercial arbitration.
Another pertinent point for consideration was that whether HCD by its order or
judgment was empowered to revoke the authority of the tribunal. Under section 20 of
the Arbitration Act 2001, the HCD does have the power upon an application made by
280 any party under arbitration agreement to decide disputes as to the jurisdiction of
arbitration tribunal. The arbitration tribunal may continue its proceedings and make
the award in spite of the fact that an application is pending before HCD.
It may be argued that there are certain anomalies with regard to the jurisdiction of
arbitration tribunal, and the authority to decide the same under national law in the
process of settling disputes. The other anomaly seems to be that an arbitral tribunal
also itself decides on an objection relating to jurisdiction, and scope of its authority. It
can proceed to make an award if it decides to reject a plea in terms of section 19[10].
Also if both the arbitral tribunal and the HCD are invested with parallel jurisdiction
over the same matter, the arbitral tribunal can continue the proceedings despite the
application against the controversy of jurisdiction pending before HCD. How can then
this apparent conflicting position be reconciled? This inconsistent position sections 19
and 20 may be resolved by bringing appropriate amendment of the law.

5.2 The Uzbekistan airways case

In Uzbekistan Airways and Another v. Air Spain Ltd (Uzbekistan Airways case), the
respondent, as plaintiff, instituted a title suit in the Court of the Joint District Judge,
Dhaka claiming compensation against the defendants-appellants. The respondent was
the general passengers sales agent (hereinafter the GSA) of the appellants, Uzbekistan
Airways (Bangladesh) Ltd. The GSA agreement came to an end in due course, and it
was not renewed by the appellants.
In the course of a dispute between the parties over a claim of money, the respondent
filed the suit claiming an amount of taka 2,78,88,553.13 as compensation. In a counter-
move, the appellants served a notice upon the respondent for initiation of an arbitration
proceeding pursuant to clause 17 of the GSA agreement. However, before the initiation
of the arbitration proceeding in Uzbekistan, the title suit was already filed and pending
decision. The appellants filed an application under section 10 of arbitration Act 2001
for staying all proceedings of the suit, and to direct the respondent to refer the matter to
arbitration. The respondent opposed the application by filing a written objection where
it was contended that the section 10 application was misconceived inasmuch as that
section has no application in the facts and circumstances of the suit since the place of
arbitration was Uzbekistan. The further case of the respondent was that, pursuant to
the provisions of section 3 (2) of the Arbitration Act 2001, only sections 45-47 applied in
respect of a foreign arbitral award; section 10 of the Act thus had no because it related
to foreign arbitration proceedings. After hearing the parties, the Trial Court rejected
the application filed by the appellants under section10 of the Act.
It appears that in the Uzbekistan Airways case the Trial Court rejected the
application merely on technical grounds. Any party to the legal proceedings must seek
to enforce the arbitration agreement before filing a written statement. The court in
which the suit is instituted has the power to stay the proceedings of the suit[11]. The
interpretation of section 10 reveals that it is applicable only to arbitral proceedings.
Non-application of the provision of section 10 to foreign arbitral award appears to be Enforcement of
an inadequacy of current law. There are other problems that need to be overcome as
highlighted in the next section
foreign arbitral
awards
6. Problems of implementation of foreign arbitral award in Bangladesh
Traditionally, international commercial arbitration, and more specifically for the
purposes of this paper, arbitration in Bangladesh has been beset with many problems.
These relate to institutional, legal infrastructural, mainly cultural and educational
281
factors. Despite recent positive response to the global movement towards
modernization and internationalization of arbitration in Asia, there still persist many
difficulties in Bangladesh that need to be urgently addressed. Dispute settlement and
enforcement of arbitral award in many Asian countries including Bangladesh still
remain a grave cause of concern for foreign investors. The reticence in this regard may
be attributed to various factors, such as:
. tendency of non-cooperation and anti-arbitration bias of local courts;
. ineptitude of local courts to appreciate the ethos of international private dispute
settlement;
. inefficiency of local courts in handling private dispute settlement matters;
. serious lack of understanding of international arbitration rules and conventions
including the New York Convention;
. local protectionism;
. corruption at various levels; and
. manipulation of the system by local disputing parties (Maniruzzaman, n.d.a).
Most, if not all of these problems are manifest in Bangladesh. The problem lies also
with legal policy-making.
The Arbitration Act 2001 adopted in Bangladesh is a significant step in the right
direction. But some shortcomings of the new Act need to be addressed. As alluded to
before, the Arbitration Act 2001 authorizes the HCD to set-aside any arbitral award
made in an international commercial arbitration held in Bangladesh. The recognition
and enforcement of foreign arbitral awards is however entrusted to the District Judge’s
Court, exercising the jurisdiction within the district of Dhaka. This latter provision
seems to have downplayed the importance of international arbitration for which so
much effort has been given to modernize the arbitration law in Bangladesh.
Another point, which requires consideration within the scheme of the Arbitration
Act 2001 is, does the nationality of the party in fact influence the outcome? While local
protectionism is widely acknowledged to be a problem, to what extent is it a bar to
recovery as opposed to merely an obstacle? Is location a factor? Arguably, one would
expect local protectionism to be less of a factor in major cities where the courts are
more professional and foreign investment plays a large role in the local economy.
Moreover, despite the existence of local protectionism, there may be tendency in some
cases to favour the foreign party. The government provides great importance on
attracting foreign investment and has initiated to provide foreign investors additional
benefits and protection not afforded domestic companies.
In addition to the domestic legislative framework offered by the Arbitration Act
2001 in Bangladesh, the international conventions and treaties in this field need also be
considered. Many international agreements, treaties and conventions facilitate the use
H of arbitration as a method for resolving dispute e.g. United Nations Commission on
24,4 International Trade Law (UNCITRAL), the New York Convention on the Recognition
and Enforcement of Foreign Arbitral Awards 1958 etc. These instruments set out rules
of international standard for settling commercial disputes. Although Bangladesh has
acceded to the New York Convention, it had not passed implementing legislation. The
New York Convention cannot therefore be relied upon to enforce a foreign award in
282 Bangladesh.
Quite apart from the national and international legal frameworks discussed above, a
significant problem besetting the dispute resolution scene in the corporate sector in
Bangladesh is the serious lack of arbitration expertise in the community of lawyers and
the various levels of the judiciary. This is glaring when compared to the availability of
similar expertise amongst development partners of the Asia-Pacific region such as the
United States of America, Australia, Hong Kong and Canada (Maniruzzaman, n.d.b). It
is not denied that international commercial arbitration is an intricate matter. It requires
expertise in Public International Law, Private International Law and sound knowledge
of international commerce, law and practice. However, for the development of trade
and commerce in Bangladesh, this expertise must be acquired. District Court Judges
should be well equipped with sufficient knowledge, expertise and training to handle
foreign arbitral awards that may very often involve complicated legal issues. This
should be a normal expectation from them. Perhaps appellate judges of the HCD may
be in a better position to deal with responsibility for enforcement of foreign arbitral
awards with their specialized knowledge and legal skills.
Part of the problems arises from Bangladesh’s outdated law education curriculum at
the tertiary level. The archaic law program at university level is an obstacle to new
trends of thoughts about law and the legal culture. Also, sufficient initiatives have not
yet taken to educate and train the professionals in the field of arbitration with a view to
creating a viable and innovative environment for international commercial arbitration.
The efficacy of the Arbitration Act 2001 depends, to a great extent, on the approach
of the lower and appellate judiciary. It also depends on progressive judicial techniques
in interpreting the new Act. It must be realized that Bangladesh must conform to the
new trends of dispute-settlement processes arbitration. It must be appreciated that this
is a global phenomenon and Bangladesh cannot afford to lag behind this progress. The
legal professionals too must come of age and change their traditional approaches to
dispute settlement in the corporate arena.
In order to attain the objectives of the new arbitration culture, more arbitration
centers should be set up, and arrangements should be made for national or regional
training programs to imbue professionals and judges with the latest developments in
this area. Regrettably, many Asian countries including Bangladesh are still lagging
behind in these respects. In the mid-2004s, the Federation of Bangladesh Chambers of
Commerce and Industry (FBCCI) introduced the Bangladesh Council for Arbitration
(BCA) as an arbitral body. As it is still new, there is little experience of arbitration being
conducted under its Rules. BCA maintains a panel of arbitrators to provide a simple,
cost-effective and speedy process of dispute resolution[12]. The Rules of BCA
incorporate 42 Rules and three Schedules. Although the Center has not yet started its
activities, the proper application of the Rules of BCA is foundational of a prompt and
universal dispute-resolution scheme. Under the Rules, party autonomy is paramount
and the parties have the benefit of a total freedom of choice under certain guiding
principles.
7. Conclusion Enforcement of
It is not enough to enact a piece of legislation on arbitration in terms of modernization
of arbitration law. The government, lawyers and judicial officers must embrace the
foreign arbitral
culture of arbitration in Bangladesh to address commercial disputes. Judges and awards
lawyers must be aware of the value of arbitration when the courts are heavily
overburdened with caseloads. They must actively promote arbitration and ADR.
There is a pressing need to create a specialist arbitration bench in the HCD arise for
the purpose of dealing with international arbitration matters more effectively and 283
professionally. Such a specialist Bench may be constituted by having a roll of lawyers
with appropriate expertise and background in the field of arbitration to appear before
the HCD. This may even mean a relaxing the requisite qualifications and experience for
the appointment of judges in order to attract suitable people for the positions. The
constitution of a specialist bench in HCD would be indicative of the government’s
seriousness in promoting international arbitration. Such an arrangement would
generate confidence in the international business community and instill faith in
prospective parties to settle their dispute in Bangladesh, and to enforce any foreign
arbitral awards there. The government has to consider these matters seriously
economic growth and prosperity of the nation.
In conclusion, it must be remembered that arbitration proceedings have developed
to supplement formal adjudication. The adversarial system inherent in the formal
adjudicatory process has failed to keep pace with the changing demands of the
commercial dealings. The Arbitration Act 2001[13][14] would not be optimally effective
in the absence of a modern and efficient arbitration center with appropriate rules to
materialize the objectives of the Act. In fact, law cannot automatically translate into
remedial measures unless of the full mechanism and institutional framework
envisaged by the law is established. The same is true of the new Arbitration Act in
Bangladesh. In every country, the apex trade body usually involved in dealing such
framework. At the initial stage, it is very natural to face these teething problems.
Gradually, these hurdles have to be overcome and a strong foundation of arbitration
culture must be established. Based on institutional support, development of expertise
in resolving commercial disputes, creation of a knowledge-based society with
flourishing integrity, reliability and uprightness and the growth of a arbitration center
would lead the country in resolving commercial disputes more efficiently, honestly,
economically and timely. The days when Bangladesh will have a equal footing with the
global economy in resolving international commercial disputes must not be far away.

Notes
1. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York,
1958), see. www.lexmercatoria.org.
2. Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York,
1958), see. www.lexmercatoria.org.
3. Articles 53 and 54 of (ICSID, 1966).
4. The Mainstream Law Reports (2005).
5. Section 45 of the Arbitration Act, 2001.
6. Section 46 of the Arbitration Act, 2001.
7. Section 47 of the Arbitration Act, 2001.
8. 10 BLC (2005) 245.
9. 10 BLC (2005) 614.
H 10. Section 19 of the Arbitration Act, 2001.
24,4 11. Section 10 of the Arbitration Act, 2001.
12. Rules of Arbitration of The Bangladesh Council of Arbitration (BCA), published in
2005.
13. Section 12 of the Arbitration Act, 2001.
14. Section 10 of the Arbitration Act provides that where any legal proceedings are
284 commenced at the instance of one party in respect of the matter covered by the
arbitration agreement, the other party before filing written statement can apply to the
court to make an arbitral reference to arbitration tribunal and stay the further
proceedings of the suit. Unless the court finds the arbitration agreement void,
inoperative or incapable of determination by arbitration it shall refer the matter to
arbitration and stay the legal proceedings.

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Problems and Prospects, available at: www.gasandoil.com/ogel/samples/freearticles/
article_52.htm
Maniruzzaman, A.F.M., (n.d.b) Developing Arbitration Culture in Asia, available at: http://
thedailystar.net/law/2005/08/04/index.htm

Further reading
www.lexmercatoria.org (n.d.), Website available at: www.lexmercatoria.org

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