A valid arbitration agreement in Bangladesh is the foundation of any arbitration proceeding. Under Section 7 of the Arbitration Act 2001, an arbitration agreement must be in writing and must clearly express the parties’ intention to submit their disputes to arbitration. Without a valid arbitration agreement, there can be no arbitration — the courts will have jurisdiction over the dispute instead.
Legal Requirements for an Arbitration Agreement in Bangladesh
Section 7 of the Arbitration Act 2001 defines an arbitration agreement as an agreement by the parties to submit to arbitration all or certain disputes which have arisen or may arise between them. The agreement must be in writing — it may be contained in a contract, a separate agreement, or an exchange of letters, telexes, telegrams, or other means of telecommunication. An oral arbitration agreement is not valid under Bangladesh law.
Types of Arbitration Agreements in Bangladesh
Arbitration Clause in a Contract
The most common form of arbitration agreement in Bangladesh is an arbitration clause in a commercial contract — a provision that requires the parties to submit any disputes arising from the contract to arbitration. The clause is typically included in the dispute resolution section of the contract.
Submission Agreement
A submission agreement is a separate arbitration agreement entered into after a dispute has arisen. It is used when the original contract did not contain an arbitration clause, or when the parties want to modify the arbitration mechanism specified in the original contract.
Key Elements of an Effective Arbitration Agreement in Bangladesh
An effective arbitration agreement in Bangladesh should include: a clear statement of the parties’ intention to arbitrate; the scope of disputes covered; the arbitral institution and rules; the seat of arbitration; the number of arbitrators; and the language of the arbitration. A well-drafted arbitration agreement avoids ambiguity and prevents disputes about the arbitration process itself.
TRW Law Firm: Arbitration Agreement Drafting in Bangladesh
TRW Law Firm advises clients on drafting and reviewing arbitration agreements for all types of commercial contracts in Bangladesh. Contact TRW at tahmidurrahman.com or visit lawfirm.com.bd.
Frequently Asked Questions
Can I add an arbitration agreement to a contract after signing in Bangladesh?
Yes. The parties can enter into a submission agreement after a dispute arises, even if the original contract did not contain an arbitration clause.
Is a standard form arbitration clause sufficient in Bangladesh?
Standard form clauses from BIAC or BIArb are generally sufficient for most commercial contracts. However, for complex or high-value contracts, it is advisable to have a lawyer review and customise the clause to ensure it is appropriate for the specific contract.
What happens if the arbitration agreement is invalid in Bangladesh?
If the arbitration agreement is invalid, the court will have jurisdiction over the dispute. The parties will need to resolve their dispute through court litigation instead of arbitration.
Related articles: Alternative Dispute Resolution in Bangladesh | Arbitration Lawyer in Bangladesh | Commercial Arbitration in Bangladesh
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Contact TRW Law Firm
If you need expert legal advice on this matter, contact TRW Law Firm — one of Bangladesh’s leading law firms specialising in ADR, arbitration, and commercial litigation. Visit tahmidurrahman.com or lawfirm.com.bd to speak with a specialist today.
