Construction and Infrastructure Business in Bangladesh in 2023
While planning to build a house, we recall terms such as real estate, developer, and construction, among others, but we are unsure of their precise rules and regulatory requirements. In this post we will talk about Construction and Infrastructure Business in Bangladesh and the Empowering way of doing construction in Bangladesh by following relevant laws and regulations.
What is meant by the term Construction?
The art and science of adding structures to land areas, sometimes known as construction.
What is the difference between construction and real estate?
Real estate businesses used to purchase and own properties in order to generate profits. On the contrary, the buildings are constructed by construction companies. In addition, a construction company provides financing for a building company to complete a housing project on behalf of a real estate company or company.
In terms of infrastructure, construction, and high-rise building, Dhaka, the capital of Bangladesh with a population of 20 million, is one of the fastest-growing cities in the world. Following are the top ten names of the best building construction businesses in Dhaka, Bangladesh.
Bangladesh is well on its path to becoming a middle-income country by 2021, which will require yearly investments of $24 billion in the country's infrastructure sector. As the nation modernizes and improves its capacity to manage systems for major infrastructure projects such as energy, telecommunications, transportation, water, and sanitation, the government intends to enlist the assistance of the private sector.
As a result of the Asian Infrastructure Investment Bank (AIIB) and the Asian Development Bank (ADB) identifying Bangladesh as a country with significant opportunities for infrastructure investment, numerous infrastructure projects have been initiated throughout the country and will have a significant impact on the country's economy in the coming years.
The increase in development activities and megaprojects has been supported by a rise in government spending and a solid economic expansion. There are now more than ten megaprojects in development, including the Dhaka Mass Rapid Transit (MRT) and the Padma bridge. ADB has agreed to offer a loan of 33.36 million US dollars for the MRT, while the remaining 11.32 million US dollars would be funded by the Bangladeshi government.
Both infrastructure and civil engineering sector development projects have been completed in 2019, resulting in a turning point for the country's largest construction firms. In addition, international rivalry has generated a robust construction market.
As Bangladesh takes significant steps towards urbanization and ensures a rise in public spending, large infrastructure projects and the housing industry have both experienced an increase in private funding. According to the Development Update released by the World Bank in October of the fiscal year, the construction industry expanded by 9.6% in 2019.
Foreign investors urge for Construction Management similar to that of the United Kingdom or the United States, whereas local construction firms utilizing labor-intensive, less expensive technologies think they can contribute more to the GDP growth of Bangladesh.
Joint ventures can be used to enhance the number of large construction firms engaged in international construction projects. In addition, construction firms now employ laborers, architects, and engineers with international and local experience, which is a tremendous boon for the sector.
The Creation and Infrastructure industry include the construction of infrastructure by individuals or businesses, as well as infrastructures within the Public Sector.
The Public Sector Infrastructure consists of the construction of roads and highways, flyovers, bridges, power plants, LNG terminals, railways, dams, seaport, and river port, among others; and such projects are either fully funded and regulated by the Government/Government agencies under the public procurement Act 2006, the Public Procurement Rules 2008, or via the Public Private Partnership agreement under the Public Private Partnership (PPP) Act 2015 whereby the Government has permitted private companies to participate in the construction of the Public Sector Infrastructure
REGISTRATION AND LICENSING PROCEDURE for Construction and Infrastructure Business in Bangladesh
Since 1990, the construction industry has contributed significantly to the rise of Bangladesh's gross domestic product, which has attracted both domestic and foreign investors. Interested investors who intend to launch a firm in this industry must first form a legal corporation. How do we proceed? They may choose to form a limited liability company, a branch office, a single proprietorship, or a partnership, each of which is detailed in more detail below.
Construction Company incorporation in Bangladesh:
The procedure of incorporating a company begins with the obtaining of a Name Clearance certificate from the Company House, Registrar of Joint Stock and Companies (RJSC) as well as the preparation of the Articles and Memorandum of Association of the Company as well as Form XII (Director's particulars) and Form IX (Director's Consent), both of which must be by the shareholders.
The executed MOA and AOA, along with the aforementioned paperwork and costs, must be delivered to the RJSC. The RJSC will provide a certificate of incorporation, together with RJSC-certified memorandum and articles of association, confirming that the business has been lawfully incorporated, providing all documents are correct and authentic. If a foreign stakeholder is involved, the process is slightly different.
As BIDA has certain standards for the establishment of a branch office in Bangladesh, a Branch office is incorporated under the Bangladesh Investment Development Authority (BIDA) by submitting an online application along with the necessary paperwork. A Branch office in Bangladesh does not establish a separate legal business organization in Bangladesh, despite being fundamentally distinct from the Parent Company. Typically, foreign investors with a short-term project in Bangladesh open a branch office to conduct business.
Partnership business in Bangladesh:
By executing a partnership deed and registering the partnership with the Registrar of Joint Stock Companies and Firms, a partnership firm can be formed (RJSC).
This sort of business company is founded by a single person and has no partners. To conduct business through such a company, one must get a trade license, a personal TIN, and a VAT certificate, and only a Bangladeshi citizen may establish one.
The TIN certificate and the Value Added Tax (VAT) Certificate must be obtained from the online portal of the National Board of Revenue (NBR) in order to start a business, while the trade license must be obtained from the municipal corporation/local government office.
Before and after establishing a corporation, branch office, sole proprietorship, or partnership in Bangladesh, legal counsel is essential. When incorporating Construction and Infrastructure Business in Bangladesh, branch office, sole proprietorship, or partnership, it is imperative that all original signed documents and related forms be presented to the appropriate government authority; otherwise, the incorporation application will fail without a doubt. In 2019, a new rule regarding company incorporation stipulates that the name clearance is valid for only one month and must be renewed each month until the firm is properly incorporated. A requirement for annual renewal is also considered mandatory for Trade License.
Compliance requirements for Infrastructure Construction by Individuals/Companies and Public Sector Infrastructure are fundamentally distinct.
Partnership between the government and the private sector:
On the other hand, government-funded infrastructure projects must adhere to the Public Procurement Act of 2006 and the Public Procurement Rules of 2008. The public private partnership (PPP)Act 2015, which mandates the execution of a PPP contract between the contracting agency and the private investor, must be strictly adhered to in the building, construction, and upgrading of large infrastructure projects involving a partnership between the government and the private sector.
In the era of globalization, Bangladesh has failed to provide construction site laborers with a safe working environment. In recent years, unfortunate events have resulted in hefty fines, which have in turn compelled employers to comply with the health, safety, and welfare provisions of Bangladesh's labor laws.
Aside from that, every employee at the construction company, regardless of nationality, must execute a letter of appointment with the company. Many foreign workers are employed in Bangladesh to design and execute building projects, and they must be employed in accordance with Bangladesh's labor and immigration rules. According to immigration laws, each foreign worker must possess a legitimate employment visa and a valid work permit.
TAHMIDUR RAHMAN Remura Wahid TRW ASSOCIATES AND ITS SERVICES:
Since its founding, TAHMIDUR RAHMAN Remura Wahid TRW Associates, an international legal company, has faithfully served both national and international customers alongside for Construction and Infrastructure Business in Bangladesh. The devoted team of attorneys and barristers has amassed exceptional experience and knowledge to handle difficulties arising from this area of the construction industry.
TAHMIDUR RAHMAN Remura Wahid TRW may also aid with the incorporation of a company like Construction and Infrastructure Business in Bangladesh, beginning with the preparation of the AOA and MOA, as well as all other essential forms, and ending with the name clearance and submission of all documents to RJSC.
TAHMIDUR RAHMAN Remura Wahid TRW's immigration law team can assist the Company in obtaining the E-visa (employment visa) recommendation letter and work permit on behalf of the foreign employee, as well as the extension of the work permit and the E visa for the foreign employee. The service shall include drafting the necessary application and documents, collecting the relevant documents from the foreign employee and the company, submitting the application and documents to the appropriate government authorities, and liaising with them to obtain the required work permit and visa extension.
TAHMIDUR RAHMAN Remura Wahid TRW has assisted businesses with the development and review of PPP contracts between the government and private investor. They have also aided landowners and construction companies in reviewing or drafting agreements that adhere to the BNBC 2006 for building and home construction projects.
Due to their years of experience in company and employment law, TAHMIDUR RAHMAN Remura Wahid TRW's legal team is adept in drafting and reviewing employment agreements for companies, and they are also able to defend both employers and employees in the Labour Courts in the event of an industrial dispute.
Force Majure in Construction Company in Bangladesh:
Any PPP contracts or contracts executed between the parties with a Force Majeure clause shall either be halted, allowing an extension for completion with no penalties placed on the party tasked with delivering the deliverables, or shall be cancelled due to frustration. As a result, the anticipated timeframe for such projects has been pushed back, and the completion period will be pushed back much more, increasing costs, lowering GDP growth for the following quarter, and, most importantly, slowing the momentum promised during the past several years.
The current general tax rate in Bangladesh is 32.5 percent, as stipulated by its legal code. The required withholding rate for services provided under this category is 7.5% at source. Locally formed limited liability companies are required to submit a number of reports to the National Board of Revenue (NBR), such as a Tax Identification Number (TIN) application, a monthly tax deduction statement, a half-yearly withholding tax statement, a yearly statement related to the tax return submission of its employees, and a yearly statement related to the salary paid by the company to its employees. Advance quarterly tax deposits, Submission of annual tax returns and attendance at appeal/hearing sessions as required on behalf of the business. Monthly VAT filings, etc.
TAHMIDUR RAHMAN Remura Wahid TRW is able to provide guidance and assistance to ensure that all regulatory compliances are met, allowing the business to operate smoothly and without incident.
Traditionally, under the infrastructure of the public sector, works must be acquired from contractors or suppliers through a competitive bidding process. For earlier infrastructure projects, the procurement and planning techniques for building projects in the Public Sector Infrastructure were scrutinized, prompting the establishment of an electronic procurement system for this industry, which still leaves opportunity for proper procurement routes.
The price increase of raw materials is a result of the rising demand for these commodities and the oversaturation of the market by suppliers, which is still dominated by huge corporations that are expanding into new sectors among the raw material suppliers.
Despite this, it is anticipated that the construction industry would experience major growth as new infrastructure developments in power production, highways, bridges, buildings, and telecommunications are implemented. The completion dates for several of these projects extend well beyond 2020; the construction industry is likely to maintain its momentum.
Investment in Bangladesh and Construction and Infrastructure Business in Bangladesh
In this age of globalization, Bangladesh has contributed to the rise in GDP by investing in significant infrastructure projects such as gas, energy, telecommunications, transportation, power plant water and sanitation facilities, hence Construction and Infrastructure Business in Bangladesh is also bound to make an impact. This has not only impacted the country's economic progress, but it has also created employment possibilities in the sector and contributed to Bangladesh's goal of eradicating poverty.
In addition, foreign competition has generated a thriving market in the sector. the building and infrastructures industry includes both private and public infrastructure projects. Public Sector Infrastructure consists of the building of roads and highways, flyovers, bridges, power plants, LNG terminals, railways, dams, seaports, river ports, etc.
Initially, the public sector was the primary contributor to large infrastructure projects; however, when their investment alone was unable to generate adequate investment for infrastructure facilities, the government joined forces with the private sector to reduce the deficit in the construction of infrastructures by establishing private sector participation in infrastructure development through Private Public Partnership agreements.
If a construction company desires to begin operations in Bangladesh, it must form a company/branch office/partnership by submitting all the required documents and fees to the RJSC or BIDA office and obtaining all the necessary operating permits from the appropriate government agency. However, sole proprietors are not required to register with any government agency, and obtaining a company license, VAT certificate, and tax identification number is sufficient for starting a firm.
The international law firm TAHMIDUR RAHMAN Remura Wahid TRW Associates is regarded as one of the greatest law companies in Bangladesh. In the construction industry, they have supported a number of clients in establishing a company and getting all necessary permits from the relevant authority.
Are you planning to register a Construction and Infrastructure Business in Bangladesh?
Company formation and registration at Tahmidur Rahman Remura: TRW: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman, The Law Firm in BangladeshRemura: TRW, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:
As time passes, Bangladeshi alongside, the world experiences development in all sectors. Development leads to urbanization, reflecting economic growth, which brings upon infrastructure development and construction. Bangladesh's economic growth is reflected by an acceleration in urban development, with the construction of houses, apartment blocks, mad infrastructures and public facilities. The country's increasing urbanization has stimulated the building materials sector and has generated considerable needs for cement. Cement is a major component in this chain.
So, Cement industry in any country plays a major role in the growth of the nation and economy. Bangladesh is the 40th largest producer of cement. It is one of the fastest growing, intensely competitive sectors of economy in our country. Due to boost in various infrastructure projects, housing facilities and road networks, the cement industry in Bangladesh is currently growing at an enviable pace. By this way Cement industry is leading Bangladesh from the respect of infrastructure development.
Several multibillion dollar infrastructural development projects, such as Padma Bridge, Dohazari-Bazar Cox's Gundum Rail Line, Rooppur Nuclear Power Plant, Matarbari Power Plant, Metro Rail and Payra sea port etc., are being undertaken by the government in Bangladesh, along with an increase in urbanization, real estate business, and other private construction. Bangladesh's cement industry is currently the fortieth largest market in the world and is included among the government's megaprojects. Bangladesh's most important export item is now cement. Numerous cement businesses export their products internationally and have established a strong place in the global market competition.
Since the 1980s and early 1990s, the country has witnessed the creation of private cement factories. Prior to that, about 95% of the country's construction supplies, including cement, were imported. Beginning in the twenty-first century, there was a tremendous demand for construction materials, especially cement, throughout the nation. Bangladesh's cement market has been ranked as the fortieth largest in the world. The cement industry contributes significantly to the economy of a country. Cement as a business can be successful, as the threat of new entrants is significant due to the enormous investment required. Although the government is the primary purchaser of cement. Bangladesh's cement sector can so develop further with government assistance and International Investors.
To establish a factory in this lucrative market i.e to open a Cement Company in Bangladesh, a number of procedures must be followed, including the formation of a legal entity i. e and the acquisition of general and special licenses and approvals, such as a TIN, VAT, Trade License, BSTI certification, IRC and ERC, and factory approval, among others. As the preeminent law company in Bangladesh, Tahmidur Rahman Remura Wahid Associates is able to assist its customer in launching a business in this industry as well as with legal matters.
The firm's seasoned attorneys provide comprehensive legal services to its clients, beginning with entity registration and the acquisition of various licenses and approvals and extending to legal opinion, litigation, and other legal services as requested by the client. Nonetheless, it is anticipated that once the epidemic begins to subside, business will return, and with the aid of the government's stated financial package, this sector will continue its steady expansion within a short period of time.
Registration and License process:
In Bangladesh, it is possible to establish a cement manufacturing factory through the formation of a limited liability corporation.
PRIVATE LIMITED COMPANY in Bangladesh:
Method for company formation:
The steps involved in establishing a company are as follows:
Step 1: Name Clearance Certificate
Obtain the Name Clearance Certificate from the RJSC as the first step.
Step two: Drafting-
involves drafting and signing the necessary documents.
Receive an encashment certificate from the bank for the remittance of foreign shareholders to the company's capital (not required for local shareholders).
Step 5: Government Costs Submission
Submit the needed paperwork as well as the encashment certificate (if required) and the government costs.
Step 6: RJSC certificate
The RJSC will evaluate the documents and issue the Certificate of Incorporation.
The following list of documents is required:
Copies of National Identity Card (NID) and Tax Identification Number (TIN) and Photos (Passport size) of all the directors and shareholders; in the case of international directors and shareholders, only copies of their Passport and Photos (Passport size) are required.
Bank Encashment Certificate for each foreign shareholder/shareholders.
Memorandum of Association and Articles of Association for the proposed business, both signed;
Forms IX and XII completed; General Licenses: TIN certificate - After the company has been properly created, an online application must be submitted to get the certificate. Additionally, a local phone number and registered office address are required to complete the application. Trade License - The application must be submitted to the relevant city corporation office, along with the appropriate government fees, company documents, and the lease/rent deed for the company's office space. Entities that will operate in the commercial sector must apply for a commercial trade license, while those that will operate in the industrial sector must apply for an industrial trade license. The application for a VAT certificate must be submitted via an internet portal, together with company documentation. Specific licenses/approvals
Procedure for factory license and registration for a cement company in Bangladesh:
The Department of Inspection for Factories and Establishments (DIFE) is the single institution in Bangladesh responsible for approving and registering factories. To obtain a license for a cement factory, one must complete the online application method for factory licenses. Prior to applying for a license, it is required to submit an application for Factory Layout Plan approval using the same site. The list of required documents for the Factory Layout Plan application is as follows:
Trade license (where applies).
Lease agreement (where applies).
Copy of the owner/managing director/CEO/national manager's ID card
Soil test report (where applies).
Design/drawing of the structure by a registered engineer or certified engineering firm (where applies).
Certificate of Load Bearing Capacity from a licensed engineer or certified engineering organization (where applies).
Certificate of building construction issued by a licensed engineer or an accredited engineering organization (where applies) The copy of the Building Plan Approval issued by the local government. The following documents are necessary for the factory license application:
Copy of Commercial License (where applies).
Lease agreement (where applies).
Copy of the owner/managing director/CEO/national manager's ID card
Demand electricity bill (where applies).
Memorandum of article/partnership agreement (where applies).
Factory Layout Approval Copy (where applies). The copy of the Building Plan Approval issued by the local government. Principal copy of the Treasury Challan. Copy of Primary License (where applies). List of industrial or establishment's laborers or employees (where applies).
Certificates of Export Registration (ERC) and Import Registration (IRC) (IRC) It is necessary to acquire IRC Form from the Office of Chief Controller of Import and Export and submit the relevant papers to the Office of CCI&E in order to receive an IRC or ERC.
Trade License for Cement Company in Bangladesh - Membership Certificate from a recognized Chamber of Commerce/Trade Association; - Tax Identification Number; - Bank Certificate; - Memorandum and Articles of Association and Certificate of Incorporation (in case of Limited Company).
Fire License for cement company in Bangladesh :
A fire license is required for all commercial establishments. The Bangladeshi Fire Service and Civil Defense (FSCD) authority under the Ministry of Home Affairs issues the fire license. The following documents must be provided in order to receive a fire license: Deposit slip/treasury challan.
Annul General Compliances of the Organizations- Entities are required to comply with annual filing requirements, such as updating trade license at the respective city corporation, renewing chamber membership, renewing IRC & ERC, filing taxes, updating annual filings at the RJSC for limited liability companies, and renewing branch office permission at BIDA.
The businesses in this sector must maintain a large number of dealers in order to conduct business and advertise their products on the local market. They also require a large number of vendors that supply them with various goods and services, such as suppliers of raw materials and transport agencies. When selling items to dealers or receiving goods and/or services from vendors, there should be a dealership and vendor agreement in place. In the event of a dispute, the agreement, in addition to the applicable laws, plays a crucial part in resolving the dispute; therefore, it is crucial to protect one's interests when drafting agreements.
Requirements Labour regulations - Entities must guarantee that their relationships with employees comply with Bangladesh's labour laws. Employees must have a letter of appointment that specifies their job title, job description, remuneration, benefits and welfare, applicable working hours and leaves, etc. It should be highlighted that an employer cannot, via contract or appointment letter, supply less than what the labor laws require. It is also the responsibility of the employer to ensure a safe and healthy work environment.
Foreign Exchange regulations in regards of opening a Cement Company in Bangladesh–
Green category industries and projects receive environmental clearance through a relatively straightforward procedure. Orange-A, Orange-B, and Red Category industries and projects are required to obtain Site Clearance, then EIA permission, and ultimately Environmental Clearance.
After three (03) years for Green category and one (1) year for Orange-A, Orange-B, and Red category industries, the Environment Clearance must be renewed. The procedure to receive the Environment Clearance Certificate is as follows:
Step 1: Submit an application (Form-3) for the Cement Company in Bangladeshtogether with supporting documentation and costs. Step 2: Department of Environment verification of application and accompanying materials. After the verification of all reports and papers, the authorized officer will conduct a third inspection. [Thereafter, make a determination on clearance (Only Green and Orange-A)] Step 4: Environmental Clearance Committee Meeting (for Orange-B and Red Category) Step 5: Choice
Report on the Initial Environmental Examination (IEE) pertaining to the industrial unit or project, as well as the terms of reference (ToR) for the Environmental Impact Assessment (EIA) of the industrial unit or project and its Process Flow Diagram; or Environmental Impact Assessment (EIA) report prepared on the basis of terms of reference previously approved by the Department of Environment, along with the Layout Plan (showing location of Effluent Treatment Plant), Process Flow Diagram, and Layout Plan (showing location of E
Report on the Environmental Management Plan (EMP) for the industrial unit or project, as well as the Process Flow Diagram, Layout Plan (showing location of Effluent Treatment Plant), design, and information about the unit's or project's Effluent Treatment Plan's effectiveness (applicable only to existing industrial units or projects); Certificate of no objection (Prescribed Form) from the local authority:
Emergency plan pertaining to adverse environmental impact and plan for mitigating the effects of pollution; 6. Outline of relocation and rehabilitation plan (if relevant); 7. Other pertinent information (if applicable). If a request is made together with the required documentation, a Location Clearance Certificate will be provided to the Red Category industrial unit or project within 60 days of receipt of the application, or the application will be refused with suitable reasons for such rejection.
Trademark laws in Bangladesh in cement industry: If necessary, the entities can register their trademarks to prevent others from utilizing same or similar marks. To register the trademark, the entity may submit an application to the Trademark Registry Wing of the Department of Patents, Designs, and Trademarks (DPDT).
A trademark registration application must include the following elements: • the Brand/Logo • Nomenclature of the Applicant • The applicant's complete address and nationality. • Status of the applicant, i.e., Merchandisers / Manufacturers / Service Providers • Classification and Specification of Goods • Date of use of the mark (whether the mark is in use or proposed to be used in Bangladesh). • A general or particular power of attorney may be necessary. • Fee for application
Acceptance or Denial of the Trademark:
Once the application has been filed for the opening of the Cement Company in Bangladesh, the documents have been examined and accepted by the Registrar, the application will be sent to the journal publication to determine whether there are any objections to the mark. In the event of an objection, the Registrar will decide the matter based on the documentation supplied by both parties. If there is no opposition, however, DPDT will notify the applicant to pay certification fees and then issue the trademark registration certificate. It typically takes between three and five years to receive the final certificate of trademark registration. In the interim, the entity is permitted to begin using the mark. A registered trademark is valid for an initial period of seven (7) years from the date of filing, with subsequent renewals for ten (10) years.
Regulations of the Bangladesh Standards and Testing Institution (BSTI) :
According to the 2018 BSTI Catalogue, cement is one of the 166 required products that require BSTI certification before being sold on the local market. In order to use the BSTI Standard Mark, one must get a Certification of Marks (CM) License. To open a Cement Company in Bangladesh, the following steps should be completed:
Step 1: Submit a completed application form and the required documentation to the BSTI in order to receive a CM license. Step 2: The BSTI will inspect the application and all supporting documents. Step 3: If the inspection report is deemed satisfactory, then random samples are gathered and signed and sealed by the BSTI Officer and the producer. Step four: The obtained sample is analysed in the BSTI Laboratory or any other lab recognized by BSTI in accordance with the applicable Bangladesh Standard (BDS) Step 5: If the results of the test parameters are deemed to be in accordance with the applicable BDS, a license is issued for that article. Step 6: Typically, a license is granted for a term of three years, which is extended for a subsequent period of three years if the samples are deemed acceptable following the same approach outlined in steps (2) and (5). Step 7: A license is required to pay fees to the BSTI, known as the CM fee. Step 8: A license granted for any object may be cancelled, revoked, or withdrawn at any time if it is determined that the license has violated any of the requirements mentioned in the license and the BSTI Ordinance.
INTRODUCTION OF Tahmidur Rahman Remura Wahid AND ITS SERVICES: As a full-service law practice, Tahmidur Rahman Remura Wahid Associates provides all forms of legal and financial services through its knowledgeable and competent employees. Registration and licensing of entities: Tahmidur Rahman Remura Wahid Associates provides services for establishing entities in Bangladesh, such as sole proprietorships, partnerships, and/or limited liability companies, as well as obtaining the necessary permits from the appropriate government agency. The services include drafting relevant documents, forms, and providing the required document list and procedure, as well as submitting the application with the relevant documents to the appropriate government office, liaising with them throughout the verification process, and obtaining the required certified documents.
Drafting, vetting agreement: As stated previously, to Cement Company in Bangladesh, it requires the drafting of various types of agreements, such as vendor, employment, and franchises agreements, which are required to be drafted in accordance with the applicable laws of Bangladesh, while at the same time safeguarding their interests in order to use these agreements to their advantage in the event of future disputes. Legal Opinion and/or Due Diligence Report: Tahmidur Rahman Remura Wahid Associates gives legal opinion to clients in connection to the implication of laws and its impact on various matters, enabling them to make informed business decisions by taking the legal element into account.
In addition, Tahmidur Rahman Remura Wahid TRW provides interested clients with a due diligence report for their entities that details all the legal requirements that must be met and any non-compliances that must be addressed. Litigation services: Tahmidur Rahman Remura Wahid Associates has a highly excellent litigation team that assists and represents clients in defending/filing disputes in court or before tribunals. Force Majeure Entities in the cement industry must determine if they are able to activate the force majeure clause in their various commercial contracts and defer the fulfilment of their contractual obligations without incurring a penalty. A force majeure event is an extraordinary event or circumstance beyond the control of the contracting parties, such as a pandemic. If a force majeure provision can be successfully used, the parties are often released from their respective contractual obligations and/or responsibilities. A force majeure clause does permit a party's complete inability to execute, but only for the length of the force majeure occurrence. If properly prepared, the force majeure clause may indicate that if a force majeure event continues for longer than a specified period, either party may terminate the contract without incurring any financial liability.
Parties may choose the Contract Act of 1872 if the contract does not contain a force majeure clause (the "Act of 1872"). The idea of frustration is codified in Section 56 of the Act of 1872, which states that a contract is null and void if its performance becomes impracticable or if, as a result of some occurrence, it becomes illegal after it has been entered into. Therefore, if the contract becomes difficult to perform due to Corona, it shall be considered null and void under Bangladeshi law, provided that the defaulting party did not know or could not have reasonably known that the contract would become impossible to perform. A null contract has the effect that it cannot be enforced by law and the parties are released from their respective duties.
The current general tax rate in Bangladesh is 32.5 percent, as stipulated by its legislation. Opening a TIN, Monthly Tax deduction statement, Half Yearly Withholding Tax statement, Yearly statement related to tax return submission of its employees, Yearly statement related to salary disbursed from company to its employees, Quarterly Advance tax deposition, Annual Tax return submission, and attending appeal/hearing session on behalf of the company are among the nominal requirements for a limited company formed locally. Monthly VAT filings, etc. Tahmidur Rahman Remura Wahid is able to provide counsel and assistance to ensure that all regulatory compliances are met, so allowing the business to operate without difficulty.
In recent years, the cement industry has grown steadily due to a surge in demand on both the domestic and foreign markets. Additionally, it has the ability to enhance its global market share.
Property Registration Fees in Bangladesh - Updated
The recent lowering of Property registration fees in Bangladesh has provided a measure of relief to the country's real estate market, a move that industry participants say will provide buyers with a substantial benefit.
Currently, the registration charge is 1 percent of the entire price of land or apartment, bringing the effective registration cost down to 10 percent from 14 percent prior to December of last year.
A purchaser of land or an apartment for Tk1 crore will now be required to pay Tk10 lakh in registration fees, which comprises stamp duty, registration fee, VAT (value-added tax), and local government tax. This is a decrease from the previous year's registration charge of Tk14 lakh.
In terms of Property registration fees in Bangladesh, The buyer will pay 1% of the purchase price in registration fees, 1.5% in stamp duty, 3% in sales tax, and 2% in local government taxes.
Previously, the registration fee comprised 14 percent of the overall cost; it is now 10 percent. This is a tremendous opportunity for plot and apartment owners, and the change will certainly have a good effect on the housing market.
In December 2020, the Internal Resources Division (IRD) and National Board of Revenue (NBR) decreased the stamp duty rate from 3 percent to 1.5 percent. At the same time, a request to half the NBR registration fee was sent to the Ministry of Law.
In 2018, the government established a committee comprised of the NBR, Ministry of Public Works, Federation of Bangladesh Chambers of Commerce & Industry, and REHAB members to handle various housing sector challenges, including the decrease of flat or plot registration fees.
The National Board of Revenue (NBR) has decreased the land registration source tax to Tk30,000 per katha in Dhaka, Gazipur, Narayanganj, and Chattogram districts that have not been developed by the government or a private party.
The NBR issued a statutory regulatory order on November 30, which was published on Monday.
The highest source tax per katha in all mouzas in Dohar, Nawabganj, Keraniganj, Savar, and Dhamrai Upazilas of Dhaka would now be Tk20,000 rather than Tk50,000.
The Property Registration Fees in Bangladesh, Searches and Copies of Property in Bangladesh in 2023
(i) five hundred taka if the property is valued at less than five million BDT;
(ii) one thousand taka where the valuation of the property is between five and fifty million taka; and
(iii) two thousand taka if the property is valued at more than fifty lakh taka;
(b) registration fee payable for registration of a declaration of heba of any immovable property under the Muslim Personal Law (Shariat) shall be one hundred taka regardless of the property's value if such heba is made between spouses, parents and children, grand parents and grand children, full brothers, full sisters, and full brothers and full sisters;
In terms of Property registration fees in Bangladesh, registration fee payable for registration of a declaration of gift of any immovable property made under the Hindu, Christian, and Buddhist Personal Law, if such gift is permitted by their Personal Law, shall be one hundred taka regardless of the property's value, provided such gift is made between spouses, parents and children, grand parents and grand children, full brothers, full sisters, and full brothers and full sisters;]
(c) the registration fee for a mortgage instrument referred to in section 59 of the Transfer of Property Act of 1882 shall be as follows:
Investing in real estate is, to say the least, a difficult endeavor. In addition to the apparent difficulties involved in acquiring the requisite finances to purchase one, there are so many formalities and legal obstacles to overcome that the prospect is frightening. If, however, one is able to make it through, it will be owing to diligent budgeting. As a first-time buyer, the Tahmidur Rahman Remura Wahid TRW law office has compiled a simple checklist for you to follow in order to avoid financial complications and prepare you for all types of costs in Bangladesh real estate. Believe us when we tell you'll need this while purchasing an apartment.
Advance Payment
Property registration fees in Bangladesh, the down payment is a proportion (ranging from 10% to 30%) of the apartment's total price that you must pay in order to acquire ownership of the property. This means that you must pay the deposit only if you are completely confident about purchasing the unit. The down payment is the sum required to formalize a deed with the seller.
According to the sales deed, the person who paid the down payment becomes the buyer at this moment. However, possession of the deed alone is insufficient. A transfer of ownership is necessary so that the buyer is legally recognized as the land's new owner.
Sale Permission Fees in Bangladesh
Obtaining selling permission costs is the first stage of transferring ownership. When a property is to be sold, the seller must obtain approval from the appropriate authorities. In Dhaka, only leasehold properties administered by RAJUK, the National Housing Authority (NHA), or the Ministry of Housing and Public Works are eligible for sales approval. Permission must be obtained from Chattogram Development Authority in Chattogram (CDA).
Since obtaining selling approval is a lengthy and arduous process, sellers can surely seek assistance from Tahmidur Rahman Remura Wahid law firm in Bangladesh. We create the application along with the seller-supplied documentation and submit the required fees to the relevant authorities on your behalf.
Only after receiving the final letter of permission can the registration process begin. For freehold properties, no selling authorization is necessary. Freehold properties include land in private residential neighborhoods, such as Aftabnagar, as well as plots controlled by real estate firms.
Registration of Property in Bangladesh
The fee for registration is paid when a deed of sale or transfer is executed. The registration procedure requires both the buyer and seller to be present. It is essential that they thoroughly review the sales transaction and verify that all information is accurate. There are a variety of rates, but typically it is between 12 and 14% of the purchase price of the property, inclusive of fees and taxes.
Duty On Stamps And Taxes
All documentation pertaining to real estate must be validated. The stamp tax serves this purpose. Simply pay tax on the whole price of the flat you are purchasing. This will formalize the transfer deed. The buyer must pay a local government tax in addition to the value-added tax on the total price of the land. Before acquiring a house, you should be prepared for this sum. Consult the professionals at Tahmidur Rahman Remura Wahid TRW to learn more about paying your taxes!
Mutation of Property in Bangladesh
The mutation will be one of the most crucial procedures in acquiring property through a legal process. By modifying the Khatiyan document, this is the legal procedure by which the previous owner's name is replaced with the new owner's.
This is a crucial step that should be considered once the court and stamp fees have been paid, as these documents will be required for the mutation application. You cannot pay land development tax or register the property in your name without completing this procedure. The purchaser is responsible for paying the applicable fees to any of the following authorities: RAJUK, CDA, NHA, or AC Land Office.
With our professional services, you can quickly navigate this procedure without having to visit multiple offices. Without mutation, a buyer cannot be listed as the property's new owner, and consequently, the property cannot be sold in the future.
Instalment Payment In Home Loans
There are numerous home loan programs available from banks and commercial institutions to assist with the down payment. They provide a plan in which you pay monthly installments over a specified number of years to cover the cost of the flat. It is contingent upon your credit score and financial solvency, therefore you must verify these factors beforehand.
You may ask the financial specialists at Tahmidur Rahman Remura Wahid Law firm for assistance. Banks and other financial organizations charge a minor processing fee for loan applications. Utilize our home loan calculator to gain a better understanding.
All of the above costs are applicable to the purchase of any flat in Bangladesh, whether it was created by a person or a real estate business. Obviously, there are additional costs associated with the acquisition of a house, such as insurance and interest on bank loans, if you have chosen to take out a loan to finance the purchase. It is impossible to provide a precise figure for these costs, as they vary entirely on the insurance company/bank/financial institution chosen.
The closing process is not simple. It necessitates comprehensive evaluation and inspection of the property, which we also perform. When dealing with primary or secondary property in Bangladesh real estate, there are agent fees, which are a proportion of the selling price. Our professionals at Tahmidur Rahman Remura Wahid Law firm can provide further information regarding additional costs and optional fees, and you can purchase your dream home immediately.
Here is a table of the necessary documents for property registration in Bangladesh:
Type of Property
Necessary Documents
Expected Government Registration Fees (Varies by Location and Property Value)
Additional Charges
Residential land
- Sale deed, Tax payment receipt, Map of the property, National identity card or passport of the owner
Stamp Duty: - 1% of market value if <= BDT 500,000 - BDT 5,000 plus 2% of market value above BDT 500,000
Additional charges: 2% of the market value
Commercial land
- Sale deed, Tax payment receipt, Map of the property, National identity card or passport of the owner, Trade license
Stamp Duty: - 1% of market value if <= BDT 500,000 - BDT 5,000 plus 2% of market value above BDT 500,000
Additional charges: 2% of the market value
Agricultural land
- Sale deed, Tax payment receipt, Map of the property, National identity card or passport of the owner
Stamp Duty: - 1% of market value if <= BDT 500,000 - BDT 5,000 plus 2% of market value above BDT 500,000
Additional charges: 2% of the market value
House
- Sale deed, Tax payment receipt, Map of the property, National identity card or passport of the owner
Registration Fee: - 0.5% of market value if <= BDT 3,000,000 - BDT 15,000 plus 1% of market value above BDT 3,000,000
Additional charges: 2% of the market value
Flat
- Sale deed, Tax payment receipt, Map of the property, Occupation certificate, National identity card or passport of the owner
Registration Fee: - 0.5% of market value if <= BDT 3,000,000 - BDT 15,000 plus 1% of market value above BDT 3,000,000
Additional charges: 2% of the market value
Shop
- Sale deed, Tax payment receipt, Map of the property, Trade license, National identity card or passport of the owner
Registration Fee: - 0.5% of market value if <= BDT 3,000,000 - BDT 15,000 plus 1% of market value above BDT 3,000,000
Additional charges: 2% of the market value
Office
- Sale deed, Tax payment receipt, Map of the property, Occupation certificate, National identity card or passport of the owner
Registration Fee: - 0.5% of market value if <= BDT 3,000,000 - BDT 15,000 plus 1% of market value above BDT 3,000,000
Additional charges: 2% of the market value
Factory
- Sale deed, Tax payment receipt, Map of the property, Occupation certificate, Factory license, National identity card or passport of the owner
Registration Fee: - 0.5% of market value if <= BDT 3,000,000 - BDT 15,000 plus 1% of market value above BDT 3,000,000
Additional charges: 2% of the market value
Warehouse
- Sale deed, Tax payment receipt, Map of the property, Occupation certificate, National identity card or passport of the owner
Registration Fee: - 0.5% of market value if <= BDT 3,000,000 - BDT 15,000 plus 1% of market value above BDT 3,000,000
Additional charges: 2% of the market value
Godown
- Sale deed, Tax payment receipt, Map of the property, Occupation certificate, National identity card or passport of the owner
Registration Fee: - 0.5% of market value if <= BDT 3,000,000 - BDT 15,000 plus 1% of market value above BDT 3,000,000
Additional charges: 2% of the market value
Workshop
- Sale deed, Tax payment receipt, Map of the property, Occupation certificate, Workshop license, National identity card or passport of the owner
Registration Fee: - 0.5% of market value if <= BDT 3,000,000 - BDT 15,000 plus 1% of market value above BDT 3,000,000
Additional charges: 2% of the market value
Note: The above list is a general guide and the actual documents required for property registration may vary depending on the specific circumstances of the case. It is advisable to consult with a legal professional to ensure that all necessary documents are obtained and submitted.
Are you planning to buy any property or do any property registration in Bangladesh?
If you require any assistance or consultation, please visit our office or contact us at +8801779127165 or +8801847220062 (WhatsApp) or by email- info@trfirm.com.
Substantive and Interim Remedies in Bangladesh in 2023
Barrister Tahmidur Rahman Director, The Law Firm in Bangladesh
24 Jan 2023
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In this post we talk about Substantive and Interim Remedies in Bangladesh and how you can effectively deals with prayer portion of both criminal and civil matters in Bangladesh.
Substantive and Interim Remedies in Bangladesh
In Bangladesh, the parties to a case have access to a variety of interim remedies. Interim remedies are temporary measures that are typically granted to preserve the status quo or prevent the loss of assets.
Common applications for interim remedies include interim declarations; interim injunctions (injunctions are orders prohibiting a person from doing something or requiring them to do something); orders for the detention, custody, preservation, inspection, sampling of relevant property; sale of relevant property which is of perishable nature or which it is desirable to sell quickly for any other reason; freezing injunctions; search orders; and orders to provide informants.
Understanding the procedure:
In any court or tribunal, requesting remedies or reliefs in the prayer section of an application or petition is a vital aspect of the practice and procedure. The contents of this article are equally applicable to both criminal and civil matters, despite the fact that this article mainly focuses on criminal law.
Interim Remedies: Nature
Relief or remedies may be of three types:
(i)Main or substantive relief:
(ii)Interim relief; and
(iii) Consequential relief.
The primary or substantive relief is granted after a final hearing on the merits of the case, and consequential relief is likewise granted after a final hearing on the merits. Consequential relief is granted as a result of the main relief, such as an order regarding costs or exceptional costs. In contrast, temporary relief (e.g., injunction, directive, stay, status quo, etc.) is granted at the issue of the Rule, the initial hearing, or the admission hearing as an intermediate remedy to protect the petitioner’s interest or right.
Writ Petition in Bangladesh
Praying for Rule Nisi(show cause notice). ThisRule is the basis andbeginning of substantiveWherefore, it is prayed that your Lordshipsmay be pleased to-
The idea of natural justice requires that the opposing party be given the opportunity to respond or explain his side of the story before anything is resolved in his favor or against him. A Rule Nisi simply satisfies that natural justice need. It is a type of show that draws attention. Once an application under Article 102 of the Constitution is admitted, the phrase Rule Nisi is utilized or issued in a Writ Petition by the Special Original Jurisdiction of the High Court Division.
A Writ Petition is a specific request to the Supreme Court’s High Court Division. In writ jurisdiction, the Hon’ble Court grants instant relief against an administrative authority’s illegal or inappropriate action, as well as judicial or quasi-judicial action.
The Bangladeshi Constitution empowers only the High Court (of Supreme Court of Bangladesh) to issue writs, directives, and orders, among other things. Writ is a very powerful weapon at a citizen’s disposal, allowing him to protect his rights by submitting a petition with the Supreme Court’s High Court Division under Article 102 of the Constitution against an illegal breach of an individual’s rights. This page examines writ: its types and cases in Bangladesh.
Writ is a highly essential legal remedy available to the citizens of a welfare state for the aim of enforcing and implementing substantive law if there has been an infringement of their fundamental rights, such as an illegal act of authority, an error of law, and so on.
In Bangladesh, this right is exercised by submitting a written document, i.e. a writ petition, to the High Court Division of the Supreme Court under Article 102 of the People’s Republic of Bangladesh for its directions or orders on the topic of fundamental rights enforcement.
Following that, the court summons or orders the opposing parties, i.e. the respondent/s, to do or desist from doing something. The primary goal of writ is to protect the fundamental rights of the people and to enforce those rights.
Here is a short explanation of these five types of writs:
Habeas Corpus:
‘Habeas Corpus’ is a Latin phrase that meaning “have his bodies.” To present the body in court. So it is a court order commanding the authorities holding an individual in custody to bring that individual into court.
The authorities must then explain why the person is being held in court. If the authorities’ answer is unsatisfactory or the detention is proven to be illegal, the court might order the individual’s release.
Thus, the writ of ‘Habeas Corpus’ is a method for ensuring the subjects’ personal liberty by providing an effective means of immediate release from unlawful or unjustifiable confinement, whether in prison or in private custody.
In Bangladesh, for example, if a person is wrongfully arrested or imprisoned, his family or friends can seek a writ of habeas corpus under Article 102 of the Bangladesh constitution. If a person is imprisoned for a murder he did not commit, his family can seek his release through a writ of habeas corpus. However, if it is proven in court that he did commit the crime, the writ is dismissed.
Mandamus:
The purpose of mandamus is to keep public officials within their authority while performing public tasks. Mandamus can be awarded to any form of authority for any type of duty, including administrative, legislative, quasi-judicial, and judicial functions. Mandamus is known as a “wake-up call,” as it wakes up the sleeping authorities to do their duties.
Any person who seeks legal duty to be performed by a person or a body may file a petition for writ of mandamus. A filing person must have a genuine or special interest in the subject topic and the legal authority to do so. Mandamus cannot be granted against a private person or entity.
Assume that a government employee working for Bangladesh Tele-Communication Limited (BTCL) feels that his right has been violated for whatever reason and wishes to file a writ of Mandamus against that corporation.
However, if his complaint lacks adequate material and is proven to be incorrect, the writ petition will be dismissed.
Prohibition:
Prohibition is a preventive writ issued to prohibit the illegal use of jurisdictional power to the harm of a person’s legal rights. The High Court Division is authorized by sub-clause I of clause (a) of sub-article (2) of article 102 of the Constitution to direct a person exercising any tasks in connection with the business of the Republic or local authority to refrain from doing what he is not permitted by law to do.
Anyone who believes or has reason to believe that an order issued by a lower court is illegal or outside the jurisdiction of that court may file a writ petition against the court.
If the Supreme Court determines the allegation to be true, it can issue a writ of prohibition against the subordinate court.
Certiorari:
Certiorari is a Latin word that meaning “to be certified” or “to be informed of, or to be made certain about” the proceedings of any lower court or tribunal that will be scrutinized by the superior court.
The High Court Division of the Supreme Court of Bangladesh may request records of any pending or ended procedures before any authority or court, including a tribunal, for its scrutiny as to the legality or otherwise of the said processes.
If a lesser court, tribunal, authority, or individual has previously breached the concept of natural justice, misused power, or acted beyond its jurisdiction, the higher or superior court might quash that act, i.e. declare it illegal, by issuing certiorari.
Quo Warranto
The Writ of Quo Warranto provides redress for illegal occupation or usurpation of any public office, franchise, or liberty. It allows for an investigation of the legitimacy of a person’s claim to an office or franchise, as well as removal from such position if he is a usurper.
The office holder must demonstrate to the court under what authority he holds office. Such a remedy is accessible from the High Court Division under sub-paragraph (ii) of clause (b) of sub-article (2) of article 102 of the Constitution.
The Supreme Court may issue this writ against any firm or individual if the court determines that the company or individual has no legal authority to hold the position they had. Assume that a garment industry lacks any legal authorization to operate, the court may issue a writ of Quo Warranto against that industry.
Alternatively, a Rule issued signifies that the court has accepted the Writ Application. A typical Rule Nisi is issued, “inviting the respondent to show cause why (some action) should not be judged to have been made without any legitimate authority and to have no legal effect.” An interim order may also be issued, halting the operation of the contested action for a specified amount of time or until the Rule is resolved.
For example:
“Issue a Rule Nisi calling upon the respondents to show cause as to why the Order of cancellation of Nikah Registration licence vide Memo No.
382- Bichar-7/2N-116/87(Angsha) dated 18.04.2004 (Annexure- N) issued by the Respondent No.2 and Appointment of new Nikah Registrars vide Memo No. 2124 and Memo No. 2119(4) dated 19.04.2004 (Annexure- O and 01) issued by the Respondent No.5 shall not be declared to have been issued without lawful authority and is of no legal effect and also should be declared to be in violation of the fundamental rights of the Petitioner is granted under Articles 27, 29 and 31 read with Article 102 of the Constitution of the Peoples Republic of Bangladesh.”
Praying for interim relief in the form of Stay:
An intricate examination of Section 151 of the Civil Procedure Code, 1908, where the two concerns brought down are- exercise of powers to fulfill goals of justice and to prevent abuse of process.
Courts have the authority to issue interim orders with the primary goal of preventing injustice from being done to the innocent. There is no superior role or procedure that allows any organ to overrule the provisions of S.151 of the Code, demonstrating the Supreme Court’s concern in protecting justice.
In Ram Chand and Sons Sugar Mills Pvt. Ltd Barabanki v. Kanhayalal Bhargava, the contention was that several events occurred subsequent to the pending first suit, and thus the first suit was no longer useful.
The Court has such powers relative to the issuance of interim orders due to the need to be just and convenient. In general, the Court may use the Inherent Powers assigned to it to impose interim orders in order to avoid misuse of the Court process.
The Court was established to bring the goals of justice together, and a portion of this may be seen in the Court issuing interim orders.
The Court claims that such interim injunctions improve the conduct of the suit and the litigation process.
1. Issue a Rule Nisi:
A rule nisi is primarily a temporary order of the court that has no independent existence but is conditional on confirmation by the court; thus, the court lacks the ability to extend the life of a lapsed order mero motu.
For example: ” Issuing a Rule Nisi calling upon the respondents to show cause as to why the Order of cancellation of Nikah Registration licence vide Memo No.
382- Bichar-7/2N-116/87(Angsha) dated 18.04.2004 (Annexure- N) issued by the Respondent No.2 and Appointment of new Nikah Registrars vide Memo No. 2124 and Memo No. 2119(4) dated 19.04.2004 (Annexure O) issued by the Respondent No.5 shall not be declared to have been issued without lawful authority and is of no legal effect and also should be declared to be in violation of the fundamental rights of the Petitioner is granted under Articles 27, 29 and 31 read with Article 102 of the Constitution of the Peoples Republic of Bangladesh.”
2.Praying for interim relief in the form of Stay:
The main problem with granting interlocutory injunctions, whether Prohibitory or Mandatory, is that there is always the risk that the court will make the ‘wrong’ decision, either by granting an injunction to a party who fails to establish his right at trial (or would fail if there was a trial) or by failing to grant an injunction to a party who succeeds (or would succeed) at trial.
As a result, the courts have formed a key notion that usually the Court takes the option that appears to bear the lowest danger of injustice if it turns out to be wrong.
Thus, if the court believes that withholding a mandatory interlocutory injunction would result in a greater risk of injustice than granting it, even if the court does not have a “high degree of assurance” about the Plaintiff’s chances of establishing his right, there is no rational basis for withholding the injunction.
For example, a template would be:
“Pending hearing of the Rule your Lordships may be pleased to stay operation of the impugned Order of cancellation ofNikah Registration licence vide Memo No. 382- Bichar-
7/2N-116/87 (Angsha) dated 18.04.2004 (Annexure- N) issued by the Respondent No. 2 and Appointment of new Nikah Registrars vide Memo No. 2124 and Memo No. 2119(4) dated 19.04.2004 (Annexure-O and O1).issued by the Respondent No. 5 may kindly be given.”
3. Praying for substantive relief:
Upon hearing the parties and cause shown, if any, make the rules absolute. A person may bring an action for a declaration of any legal character or claim to property. This is an optional relief. The law states that no such declaration shall be made if the plaintiff fails to seek additional relief other than a mere declaration of title.
4. Praying for consequential relief:
Pass such other or further order or orders as to his Lordships may seem fit and proper.
Rule Nisi in Bangladesh:
Generally, a rule nisi is an order “to show cause”, meaning that the ruling is absolute unless the party to whom it applies can show cause why it should not apply.
A decree nisi or rule nisi (from Latin nisi, meaning “unless”) is a court order that does not have any force unless a particular condition is met. Once the condition is met, the ruling becomes a decree absolute (rule absolute), and is binding.
Typically, the decree becomes absolute unless the adversely affected party provides satisfactory evidence or argument that the decree should not take effect. For that reason, a decree nisi may also be called a rule, order or decree to show cause.
Issuing Rule Nisi is the basis and beginning of substantive relief. After receipt of causes shown, if any, against the Rule Nisi the court will hear the matter on merit and after such hearing will deliver judgment and give substantive relief.
When the rule nisi is issued, it is incumbent on the party upon whom it has been issued to appear and help the Court in the proceedings.
Rule and Rule Nisi under the New High Court Rules, 2012:
The term Rule or Rule Nisi has universal acceptability in legal jurisprudence. However, the newly amended High CourtDivision Rules, 2012 defines and differentiates between Rule and Rule Nisi. This differentiation seems unnecessary and confusing from the view point of the universality of these terms application. If we accept this differentiation and definition correct, how can we define “decree nisi”? The definition and differentiation are quoted below:
An order passed on a Writ application/petition under this sub-rule may be called a Rule Nisi. In othercases, such order may be called a Rule. In every such order (Rule Nisi or Rule) the specific date of return of service shall be mentioned along with a direction to the petitioner/applicant to put in requisites within a specified time.
For details on Rule Nisi,”Rule is returnable within 3 weeks”, “Let the service of the notice is dispensed with” etc.
Interim Relief and Main Relief:
Interim Relief is ancillary to the main relief and such relief is given in aid of or ancillary to the main relief which may beavailable to the petitioner on final determination of his petition but not as a means to enable the Petitioner to initiate anappropriate legal proceeding.
The petitioner should not be granted the interim relief in such a way that he practically gets the principal or substantive relief which he seeks to obtain on final hearing of the petition.
Any declaration or direction or order to be given must be ancillary to the main relief, but in doing so the superior courtshad always placed self-imposed limitation for not raising any new issue which requires adjudication on proper fact for which no foundation was laid by the parties.
Interim Relief when should not be granted:
The HD while passing ad-interim order or granting ad-interim relief is to see that the relief so granted does not amountto granting the entire releifs sought for in the substantive prayer in the petition.
The HD except under exceptional circumstances without hearing the other side should not grant ad-interim relief which is close to relief sought in the Writ Peittion.
The superior courts have always discouraged granting of ad-interim relief which in fact gives the primary relief sought in the writ petition Agrani Bank v Essential Garments Ltd, 26 BLD (AD) 93.
The law is now settled that if the interim relief amounts to granting of entire relief sought in the proceeding, the ad-interim relief so granted is not legally well-founded and granting of such ad-interim relief has been deprecated by the courts where judgment is binding on all courts (Para 16) AIR 1995 SC 1368.
In Ministry of Establishment Vs. Amjad Hossain 2 CLR (AD) 107 question was raised whether the phrase in the prayerportion of a writ petition “such other or further order or orders as to your Lordships may seem fit and proper may kindly be passed permit the High Court Division to go beyond the terms of the Rule.
The Appellate Division held that theprayer to the effect “and/or such other of further order or orders as your Lordships may deem fit and proper “do not authorise a writ Court to give relief beyond the Rule issuing order, such prayer authorises the writ Court to give any incidental relief or reliefs which may follow from the main relief according the Rule issuing order.
This view from our apex court seems wrong in view of decision in Mehta by the Indian Supreme Court.
Types of Interim Relief:
Interim relief may be of different types depending On circumstances and orders of the court allowing it. Some of the common types of interim orders are briefed below:
Injunction:
Injunction is a judicial order whereby a party is required to do or to refrain from doing any particular act or maintaining status quo. Depending on the procedure injunction may be of three types: Ad-interim, temporary and permanent injunction. Again, depending on the basis of nature injunction may be of two types: mandatory and prohibitory injunction.
Stand over:
Writ, Criminal Revision, Application under 561A of Miscellaneous Jurisdiction, Application for condonation of delay- are all motions. Motions were normally unlisted but now after amendment of High Court Rules in 2012 motions are lites as ‘In re’ and they are heard on motion days in respective courts.
However, if some of the motions remain unheard on a particular motion day, they will be taken up the next day and in that case they are put on to the list as”Stand Over”. They may also come up in the list as “In Re”. Order of *stand over” is also possible by application by an advocate.
For instance, when at the time of motion hearing the court requires some information which the latter do not have, an order of stand over for a certain period of time may be passed by the Bench which effectively adjourns thematter to a late date.
Stay:
Stay means an order of the court whereby an action or effectiveness of an action is stopped until further order.
Status Quo:
“Status quo” means the existing state of things at any given time. In other words, it means the state in which anything already is. To leave a thing in status quo is to leave it unaltered, i.e., as it is. Status quo involves any undertaking not to do a certain act.
It has also been decided that an order of status quo by the court amounts to an order of temporary injunction.
If you want to open a liaison office in Bangladesh or about branch formation click here!
“The purpose of mandamus is to keep public officials within their authority while performing public tasks.
Mandamus can be awarded to any form of authority for any type of duty, including administrative, legislative, quasi-judicial, and judicial functions.
Mandamus is known as a “wake-up call,” as it wakes up the sleeping authorities to do their duties.“
-Barrister Remura Mahbub
Are you planning to do a writ or looking for criminal and civil remedies in Bangladesh?
Tahmidur Rahman Remura Wahid TRW is a full-service law firm that has been dealing with Writ-related problems on a regular basis since its inception through its qualified and experienced lawyers.
If you require any assistance or consultation, please visit our office or contact us at +8801779127165 or +8801847220062 (WhatsApp) or by email- info@trfirm.com.
Address: House 410, Road 29, Mohakhali DOHS, Dhaka 1206
FAQ
How much money is required for company registration in Bangladesh?
The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.
How long does it take to register a company in Bangladesh?
Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.
It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.
What is BIDA?
Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.
BIDA’s responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.
Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.
What documents are needed to set up a private limited company in Bangladesh?
1. Memorandum of Association 2. Article of Association 3. Certificate of Incorporation 4. Trade License 5. TIN 6. VAT Registration Certificate 7. Name Clearance 8. Environmental Clearance Certificate 9. Fire Certificate
What is the minimum capital required for a private limited company in Bangladesh?
In Bangladesh, there is no minimum or maximum authorised capital for a local company.
However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.
Can a single person start a company in Bangladesh?
Bangladesh does not allow a single person to open a private limited company orOne Person Company (OPC).
Aprivate limited company must have at least twoshareholders. In the case of a public limited company, however, the total number of shareholders required is seven.
Can a private limited company have one director in Bangladesh?
A private limited company must have at least two directors. Local or foreign nationals may serve as directors.
Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.
What is the difference between authorised capital and paid-up capital?
– Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocateto shareholders.
In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.
-Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).
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Author’s Bio
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura Mahbub is a finance partner and one of the Bangladesh’s market leading international lawyers. She is head of the firm’s Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.
Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
Work highlights
Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:
⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.
⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group
⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio
⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector
⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia
Email:
remura.mahbub@gmail.com
Address:
2 Turner Street, Canning Town, E16 1FH, United Kingdom
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Admiralty Law in Bangladesh and Ship Arrest in Bangladesh in 2023
24 Jan 2023
Barrister Tahmidur Rahman Director, The Law Firm in Bangladesh
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This article will explain in details about admirlty law in Bangladesh and ship arrest procedure with details.
Nature of Admiralty law in Bangladesh
The Admiralty Court Act of 2000 (which revoked the Admiralty Court Act).The High Court Act (1891) confers original jurisdiction on the High Court Division foraccepting cases in the first instance. Chapter 3 of the 2000 Admiralty Act. The statute specifies that the High Court Division shall serve as the Court ofAdmiralty. Cases under the statute are decided by a special statutory procedure.
The Court has exclusive jurisdiction under the Act itself. Nonetheless, there is aThere is a misunderstanding among attorneys regarding the correct terminology.should be assigned to the High Court’s admiralty jurisdiction.Division. There is a common misconception that lawsuits are decided by theDifferent statutes designate the High Court Division as a court of initial instance.
Ordinary Civil Original Jurisdiction is exercisedA sectional bench ofThe former Dhaka High Court, commenting on such a case, stated:This jurisdiction opined that it would be a misnomer to refer to it in this manner.as Original Civil Jurisdiction Ordinary.
The Honorable Mr. Justice RuhulIslam accurately recognized the legalposition upon observation: “Admiralty jurisdiction differs significantly from both ordinary original civil jurisdiction and extraordinary original civil jurisdiction of the United States.”the Supreme Court.
Admiralty Suits and Admiralty law in Bangladesh:
The High Court Division of the Supreme Court of Bangladesh is vested with admiralty jurisdiction. Article 101 of the Constitution of the People’s Republic of Bangladesh provides that the High Court Division shall have such jurisdiction as are conferred on it by the Constitution and by other laws.
Section 3 (1) of the Admiralty Court Act, 2000 proclaims that the High Court Division of the Supreme Court shall be the Court of Admiralty.
Sub-section (2) narrates the jurisdiction of the Court in details. Section 8 of the Act permits the hearing and disposal of admiralty suits by a single bench of the High Court Division. However, the Chief Justice may constitute a Division Bench comprising two or more judges for hearing and disposal of such suits.
Nature of Admiralty Action in Bangladesh:
Maritime law has long allowed a plaintiff to proceed not only in persona (e.g. against a shipowner) but also in rem (against the thing itself, e.g. the ship). Therefore, admiralty action is an action in rem as well as in personam.Admiralty suit is an action in rem generally and cause of action arises due to collision of ships in the seas and/or for causing damage to cargo.
Thus, in admiralty law in Bangladesh, the remedy in an admiralty suit is essentially a remedy by way of compensation in money and that is why the Act of 2000 and Admiralty Rules provide for arrest of ships when it is within the territorial limits of Court.
The Act also provides for the release of an arrested ship on furnishing of adequate security for the claim amount. An action in rem is directed against the ship itself to satisfy the claim of the plaintiff out of the res. The ship is for this purpose treated as a person.
Such an action may constitute an inducement to the owner to submit to the jurisdiction of the court, thereby making himself liable to be proceeded against by the plaintiff in personam.
Proceeding For Ship Arrest in Bangladesh
In admiralty law in Bangladesh, It is however, imperative in an action in rem that the ship should be within jurisdiction at the time the proceedings are started. It is by means of an action in rem that the arrest of a particular ship is secured by the plaintiff.
The arrest of the foreign ship by means of an action in rem is thus a means of assuming jurisdiction by the competent court.
A personal action may be brought against the defendant if he is either present in the country or submits to jurisdiction. If the foreign owner of an arrested ship appears before the court and deposits security as bail for the release of his ship against which proceedings in rem have been instituted, he submits himself to jurisdiction.
Procedure of an admiralty suit in Bangladesh:
The procedure for commencing an action on a claim under the admiralty jurisdiction of the High Court Division is as like as filing of a civil suit in a court of original jurisdiction.
“In admiralty law in Bangladesh, a suit shall be instituted by a plaint drawn up, subscribed and verified according to the provisions of the Code of Civil Procedure, save what if the suit is in rem the defendants may (subject to such variations as the circurnstances may, require) be described as “the owners and parties interested in”the vessel or other property proceeded against instead of name”.
The plaint must be signed and verified by the plaintiff, if he be an individual, and in the case of a firm by any one of its partners, and, it a corporation, by a director, the secretary or other principal officer. When the claimant seeks to arrest the vessel, the vessel would be named as a defendant. If the owners of the vessel are known they will be impleaded and named as other defendants. In addition, the defendant may also be described as
“the owners and parties interested in the vessel cases, the local agent of the ship is also impleaded as a defendant.
In most the plaint contains the names, description and place of residence of the plaintiff and the defendant/defendants; the statements of facts giving rise to the cause of action to the claimant for the suit and the time when it arose; the nature of claim as well as statements that the suit is maintainable within the admiralty jurisdiction of the court. The plaintiff in the plaint will seek appropriate relief or reliefs, i.e., the decree to be passed in the suit.
Application for arrest of a ship or for injunction in Bangladesh
An application for arrest of a ship in admiralty law in Bangladesh or application for injunction, or direction requires affirmation. Affirmation is made by swearing an affidavit by the claimant or on his behalf by his authorised agent before the Commissioner of Oaths of the High Court Division. Until an affidavit by the claimant or his agent is filed no warrant of arrest shall be issued.
Rule 4 of the Admiralty Rules, 1912 prescribes that in suits in rem a warrant for the arrest of property may be issued at the instance either of the plaintiff or of the defendant at any time after the suit has been instituted, but no warrant of arrest shall be issued until an affidavit by the party or his agent has been filed.
The affidavit shall state the name and description of the party at whose instance the warrant is to be issued, the nature of claim or counter-claim, the name and nature of the property to be arrested, and that the claim or counter-claim has not been satisfied.
Upon filing the plaint, the plaintiff moves the same before the Admiralty Court the concerned bench of the High Court Division assigned to hear admiralty matters) and such court normally orders registration and admission of the suit and gives directions for issuing summons upon the defendants, fixing a date for their appearance and for filing the written statement.
Thereafter, the application for arrest of the vessel is. Moved and, if the court is prima facie satisfied with the submission of the plaintiff in favour of the claims, the Court passes an instant order for arrest of the ship and for keeping the same in the custody of the Marshal of the Admiralty Court.
The Marshal is appointed by the Chief Justice to execute the process of the Admiralty Court. The Court would further order that the vessel, the other defendants and the Port Authority, Customs Authority and the Port Police be informed about the order of arrest of the vessel and would also direct that the Port Authority, Customs Authority and the Port Police Authority render all necessary assistance to the Marshal of the Court in securing the arrest of the vessel.
While passing an order for arrest, it is usual for the Court to pass an order that, in the event of the defendants satisfying the Court that the vessel is under no obligation to pay the claimant or in the event of furnishing such security as against the amount to be determined by the Court, the ship may be released from arrest. The necessary orders of the Court admitting the suit and the arrest would be required to be drawn up by the office.
Sometimes the Admiralty Court, instead of passing an instant order of arrest, will direct the defendants to show cause within a certain period of time, say within three or four days from the date of service of the order, as to why on the allegations of the plaintiff contained in the application for arrest, the vessel should not be arrested, and similar procedures, like those for the service of the warrants of arrest order will be folfowed in respect of the service of the said “show cause” notice on the defendants.
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Service of a warrant against a ship is to be effected by nailing or affixing the original writ or warrant for a short time on the main mast or on the single mast of the vessel and by taking off the process, leaving a true copy of it nailed or affixed in its place.
Normally, upon a warrant of arrest, the Marshal along with his assistants will proceed towards the Port where the ship is anchored for service of the same and the Marshal will go on board the ship and call the Master or in his absence the Officer-in- Charge of the ship and inform him by handing over the warrant of arrest that the vessel is under arrest of the Admiralty Court.
If the Master of, in his absence, the Officer-in-Charge of the ship refuses to accept the warrant, the Marshal will leave the warrant of arrest on board and will submit his report to the Court stating either that the writ has already been served or about the refusal to accept the writ of arrest and the fact of leaving the writ on the vessel because of refusal by the Master to accept it.
If a writ of arrest is left on board by the Marshal because of the Master’s refusal to accept it, this would be deemed by the Court to amount to a good service of the arrest order. The Port having jurisdiction over the vessel will also be informed and served with the writ of arrest for the purpose of information and, upon receipt of the same, the Port Authority will not give any port clearance to the vessel until a release order is served upon them for the purpose of information.
Similarly, the Commissioner of Customs having jurisdiction over the vessel would also be informed about the arrest of the vessel and be served with the writ of arrest. He also will not grant any clearance to the vessel until a writ of release order is served on him for the purpose of information. The other defendants will also be served with the order of arrest of the vessel.62
Custody of the ship while under arrest
From the time of arrest the ship will be under the custody of the Marshal of the Admiralty Court and any interference with the same might be regarded as contempt. The Marshal requests the Port Authority to keep watch over the ship.
Appearance of defendants:
The defendants immediately upon receipt of the arrest order may cause their appearance in the suit through advocates and file written objections (W.O.) against the order of arrest, giving the grounds in favour of vacating such an order, or may furnish security by way of a Bank Guarantee executed by a local scheduled bank to the extent of the claimed amount, or such amount as determined by the Court for immediate release of the vessel, and file written objections in due course. Written objections are required to be affirmed by an affidavit on behalf of the defendants before the Commissioner of Oaths of the High Court Division.
Statement showing the extent of interest.
In an admiralty suit where a ship has been arrested any person not named in the writ but interested in the vessels may intervene and appear on the filing of an affidavit showing that he is interested in the vessel and may tille a statement showing the extent of his interest. Upon hearing of, the written objections filed by the defendant, if the Court is satisfied that the vessel has no obligation to pay the claimant of that the vessel is not liable to be arrested, the Court may set aside the order of arrest and order the release of the vessel.
If the defendants furnish a Bank Guarantee through a local scheduled bank, for the immediate release of the vessel, the vessel will be released.
Upon the furnishing of the Bank Guarantee, the maintainability of the arrest order can be challenged by filing written objections, and the Court may hear such objections and, if satisfied that the vessel is not under any obligation to satisfy the claims of the claimants, may return the Bank Guarantee to the bank concerned for cancellation.
In appropriate cases the Admiralty Court may consider to reduce the quantum of security to be furnished by way of Bank Guarantee for the release of the vessel. Hearing of such application for reduction of security amount may take some time.
Normally, written objections are taken up for hearing by the Court in due course and, unless there appears to be a very strong case in favour of the defendants and for release of the vessel, the Court would order that the objections be taken up at the time of the final hearing.
In a suit where only a notice to show cause as to why the vessel would not be arrested is passed by the trial Court, the defendants would appear and file written objections against such order and, upon hearing, if the Court is satisfied that the vessel is not liable to be arrested, the Court would reject the petition for arrest.
In the event the Court is satisfied that the vessel would be out of jurisdiction without satisfying the claims of the plaintiff, when a decree may be passed in his favour, the Court would order the arrest of the vessel.
Defendants possession as evidence in support of the defence
The defendants are required under the law to file a written statement in their defence in, reply to the allegations contained in the plaint. Where the defendants rely upon documents in their possession as evidence in support of the defence, they can produce and file the same in Court.
The defendants may also file such documents as they consider necessary for the defence before commencing the hearing of the suit. The Court also has the power to direct either the plaintiffs or defendants at any time during the pendency of the suit to produce such documents as are in their possession relating to any matter in question in the suit.
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Court fee for admiralty suit is an important issue. The Admiralty Court Act, 2000 provides for the application of the Court Fees Act, 1870 in an admiralty suit. First Schedule to the Court Fees Act prescribes the rate of advalorem fees payable on the valuation of a suit.
Where the suit is valued to an amount below Tk 2 lakh or where the claim amount as stated in the plaint does not exceed the said limit, the court-fee is fixed at Tk 7,100.00. For any amount exceeding taka 2 lakh court fee would be 1% of the exceeding amount plus [15% VAT]° (value added tax) on the total court fee calculated as such.
Maximum advalorem court fee in Bangladesh Admiralty Law
Proviso to section 7 of the Admiralty Act, 2000 provides for a maximum advalorem court fee of taka one lakh for the enforcement of maritime claim or questions. The same proviso provides that, the fees chargeable on a plaint in case of a claim by a master or member of the crew of a ship for recovery of wages shall be taka one hundred.
Enforcement of judgment and decree:
When a suit is decreed in favour of the claimant and if there is no Bank Guarantee or security in substitution of the vessel, a sale by public auction of the arrested vessel would be ordered by the Court. An order for sale pendente lite of a ship under arrest is very exceptional but can be made in certain serious situations.
Sale by public auction is conducted by the Marshal of the Admiralty Court. The Marshal of the Admiralty Court for this purpose prepares an inventory of the said vessel and puts the vessel in public auction at a date and time fixed by him.
Notices for auction sale
Notices for such auction sale is generally published in two national dailies one in English and the other in Bengali and also in local papers’ where the ship is arrested. The decree-holder pays the necessary expenses for the preparation of the said inventory by the Marshall and his team, the cost of advertisement in the papers and all other incidental expenses.
All such costs and expenses in connection with or relating to the auction sale of the vessel are considered as the first charge on the sale proceeds of the vessel. The highest bidder at a public auction will be allowed to purchase the vessel. The sale proceeds of the auction sale is deposited in the account of the Court/Marshall as per rules.
However, such a sale is to be confirmed by the Admiralty Court. If the Court finds that the bid offer is very low, then it may set aside the auction and may direct a fresh auction and, upon sale, the Court will disburse the amount of the claimants. If there is a Bank Guarantee substituting a vessel the decretal amount will be satisfied out of the Guarantee.
The right to arrest a sister ship:
The admiralty jurisdiction of the High Court Division may be invoked by an action in rem not only against the offending ship in question but also against a “sistership’, i.e., a ship in the same beneficial ownership as the ship in regard to which the claim arose. Section 4 (4) of the Admiralty Act, 2000 specifically provides:
In the case of any such claim as is mentioned in clauses (d) to (g) of sub-section 2 of section 3 of the Act, being a claim arising in connection with a ship, where the person who would be liable on the claim in an action in personam was, when the cause of action arose, the owner or charterer of, or in possession or in control of, the ship, the Admiralty jurisdiction of the High Court Division as the Court of Admiralty may (whether the claim gives rise to a maritime lien on the ship or not) be invoked by an action in rem against-
(a) that ship, if at the time when action is brought it is beneficially owned as respects all the shares therein by that person; or
(b) any other ship which, at the time when action is brought, is beneficially owned as aforesiad.
However, before the enactment of the Act of 2000 the High Court Division in exercising admiralty jurisdiction decided against proceeding in rem where the sister ship of the same owner was not concerned with the cause of action. In Kings Shipping Trading Co. vs. Ms. L.S. Lines & Other of the High Court Division observed:
“Admiralty Court in Bangladesh has been exercising the same jurisdiction as was conferred upon the High Court of Admiralty in England under the provision of Colonial Court of Admiralty Act 1890 and Colonial Courts of Admiralty (India) Act 1891. The High Court Division of the Supreme Court of Bangladesh never exercised Admiralty jurisdiction on the basis of practices of the English Court of Admiralty.
“In appropriate cases the Admiralty Court may consider to reduce the quantum of security to be furnished by way of Bank Guarantee for the release of the vessel. Hearing of such application for reduction of security amount may take some time. Normally, written objections are taken up for hearing by the Court in due course and, unless there appears to be a very strong case in favour of the defendants and for release of the vessel, the Court would order that the objections be taken up at the time of the final hearing.”
Are you planning to file an admiralty related suit in Bangladesh?
AdmiraltySuits in Bangladesh and Ship Arrest at Tahmidur Rahman Remura: TRW: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: TRW, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to Admiralty Suits in Bangladesh and Ship Arrest in Bangladesh . For queries or legal assistance, please reach us at:
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Address: House 410, Road 29, Mohakhali DOHS
FAQ
Why should you a arrest a Ship in Bangladesh?
Bangladesh is one of the most favorable arrest jurisdictions for the following reasons: a) Bangladesh is not a signatory to any arrest convention; b) ship can be arrested in an action in rem; c) vessel can be arrested in an action in personam; d) ship can be arrested for security; e) ship can be attached even after loss of navigability; f) ship can be arrested for maritime lien as well as maritime claim; g) arrest lies for as many as nineteen claims; and The High Court Division of Bangladesh’s Supreme Court exercises Admiralty Jurisdiction in accordance with the Admiralty Court Act of 2000 and the Admiralty Rules of 1912. Admiralty Rules provide that in suits in rem a warrant for the arrest of property may be issued at the instance of either the plaintiff or the defendant at any time after the suit has been commenced, but no warrant of arrest shall be issued until an affidavit by the party or his agent has been filed, and the following provisions have been complied with:- a) The affidavit shall state the name and description of the party at whose instance the warrant is to be issued, the
b) In a case involving the distribution of salvage, the affidavit must include the amount of salvage money awarded or agreed to be accepted, as well as the name, address, and description of the party holding the funds.
How to file an application for ship arrest in Bangladesh?
To file an application for ship arrest, the plaintiff/claimant must file a lawsuit and pay a court fee of Tk 1,000,000.00. In an action for wages, a court fee of Tk 100.00 must be paid. The complaint and accompanying documents must be filed with the section/office of the Court, and the application for arrest of the ship must be filed with the Court.
Typically, the application appears on the court’s Daily Cause List the following business day. Nonetheless, if the Court is convinced of the matter’s urgency, it prepares a supplemental cause list and hears the case on the same day. If a prima facie case is established in support of the claim, the court will admit the case and issue summons.
The application for arrest is then heard, and if the court is initially convinced of the application’s merit, it issues an order for the arrest of the ship as security for the claim amount.
A ship arrest application is heard ex parte unless the defendants have filed a caveat. The Marshal of the Court serves the defendants with the arrest of ship order upon receipt of the claimant’s fee and charge.
Similarly, the Admiralty Court has the authority to seize cargo on board or any property belonging to any party.
How an order for a ship arrest works?
The order for arrest may be vacated by the same court upon an application filed by the defendant on the grounds that the ship was wrongfully arrested, and the defendants may also file an application for a reduction in the amount of security, but hearings for such applications take one to two weeks.
When the ship is in a hurry, this type of application is typically not recommended. A ship is released from arrest upon depositing the claim amount with the court or providing a local bank guarantee. In Bangladesh, P & I Club’s LOU is not recognized.
After the ship is released in exchange for a bank guarantee, the defendants may move for a reduction in the bank guarantee, and if granted, a revised bank guarantee will be provided. The Marshal also serves the release order upon receipt of the Marshal’s fee.
If the ship has not been released by the defendants, the plaintiff may request the sale of the ship pendente lite.
The court then sells the ship at auction and holds the proceeds, which are paid to the plaintiff if he wins the case. If there are multiple claimants and the proceeds are insufficient to cover their claims, the Court applies the English Law of Priorities.
Which International Convention applies to arrest of ships in Bangladesh?
Both the International Convention relating to Arrest of Seagoing Ship 1952 and the International Convention of the Arrest of Ships 1999 have not been ratified yet by Bangladesh.
Is there any other way to arrest a ship in Bangladesh?
A ship could also be seized in execution of a decree issued by the High Court Division or a judgment issued by a foreign court against the ship’s owner. Additionally, a ship can be attached prior to judgment in a suit in personam. A ship can be attached to a suit in rem if it is beached for scrap prior to the institution of the suit.
The Bangladesh Merchant Shipping Ordinance (MSO) of 1983 permits the Principal Officer of the Mercantile Marine Department to seize an unseaworthy vessel. Under the MSO, the High Court Division can detain a foreign ship for damage caused in any part of the world to the Government of Bangladesh or any Bangladeshi citizen or company, and the Principal Officer or Collector of Customs can detain a ship before an application to the High Court Division has been made.
In accordance with the Regulations for Working of Chittagong Port (Cargo and Container) 2001, the Chittagong Port Authority may detain a vessel until security has been provided for the amount of damage caused and the cost of removing the blockage of the navigational channel, or until the full amount has been paid.
Is saisie conservatoire or an freezing order applicable in Bangladesh Admiralty law?
Other than the arrest of a ship in an Admiralty proceeding or an execution proceeding to enforce a decree, there is no separate freezing order. The court may, however, grant an application for an injunction prohibiting a party from scrapping or removing a vessel.
For which types of claims can you arrest a ship?
In an action in rem, a ship could be arrested for any of the following claims:
(a) any claim to the possession or ownership of a ship or to the ownership of any share therein or for recovery of documents of title and ownership of a ship, including registration certificate, log book and such certificates as may be necessary for the operation or navigation of the ship; (b) any question arising between co-owners of a ship as to possession, employment or income of that ship; and (c) any claim in respect of a mortgage or charge on a ship or any share therein.
(d) any claim pertaining to towage of a ship or aircraft; (e) any claim pertaining to pilotage of a ship or aircraft; (f) any claim pertaining to goods or materials supplied to a ship for her operation or maintenance; and (g) any claim pertaining to construction, repair, or equipment of a ship or dock charges or dues.
(h) any claim for wages by a master or member of a ship’s crew, or any claim for money or property recoverable as wages of a master or member of a ship’s crew under the Merchant Shipping Ordinance, 1983, or in court; charterer or agent of the ship;
(i) any claim for forfeiture or condemnation of a ship or of goods which are being or have been carried, or have been attempted to be carried, or for the restoration of a ship or any such goods after seizure, or for droits of admiralty together with any other jurisdiction to grant reliefs as are provided under the provisions of this title.
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Author’s Bio
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura Mahbub is a finance partner and one of the Bangladesh’s market leading international lawyers. She is head of the firm’s Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.
Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
Work highlights
Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:
⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.
⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group
⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio
⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector
⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia
Email:
remura.mahbub@gmail.com
Address:
2 Turner Street, Canning Town, E16 1FH, United Kingdom
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