The right to challenge an arbitral award in Bangladesh is a limited but important safeguard against procedural injustice and jurisdictional excess in arbitration. Under Section 37 of the Arbitration Act 2001, a party may apply to the court to set aside an arbitral award on specific, narrowly defined grounds. Courts in Bangladesh approach such applications with caution, reflecting the principle that arbitral awards should be final and binding.
Grounds to Challenge an Arbitral Award in Bangladesh
Grounds the Applicant Must Prove (Section 37(1))
Under Section 37(1) of the Arbitration Act 2001, the applicant may challenge an arbitral award on the following grounds: incapacity of a party to the arbitration agreement; invalidity of the arbitration agreement under the applicable law; failure to give proper notice of the appointment of an arbitrator or of the proceedings, or inability to present the case; the award dealing with matters beyond the scope of the submission to arbitration; and improper composition of the tribunal or procedure not in accordance with the parties’ agreement or the Act.
Grounds the Court May Raise (Section 37(2))
Under Section 37(2), the court may set aside an award on the following grounds, even if the applicant has not raised them: the subject matter of the dispute is not capable of settlement by arbitration under Bangladesh law; and the award is in conflict with the public policy of Bangladesh.
Time Limit to Challenge an Arbitral Award in Bangladesh
An application to challenge an arbitral award must be filed within 60 days of receiving the award (or, if a request for correction or interpretation was made, within 60 days of the disposal of that request). This time limit is strict and courts have very limited discretion to extend it.
Procedure to Challenge an Arbitral Award in Bangladesh
The application must be filed in the competent court (the High Court Division for high-value awards, or the District Judge’s court for smaller awards). The application must be supported by an affidavit setting out the grounds for challenge and the evidence in support. The court serves the application on the other party, who files a response. The court hears arguments from both parties and decides whether to set aside the award.
What Happens if the Challenge Succeeds?
If the court sets aside the award, the dispute may be referred back to the arbitral tribunal for reconsideration (if the setting-aside is on procedural grounds) or the parties may need to commence fresh arbitration proceedings. Setting aside an award does not automatically resolve the underlying dispute.
TRW Law Firm: Award Challenge Services in Bangladesh
TRW Law Firm advises clients on whether to challenge arbitral awards and, where appropriate, represents them in setting-aside proceedings. The firm also defends award creditors against challenge applications. Contact TRW at tahmidurrahman.com or visit tahmidur.com.
Frequently Asked Questions
Can I challenge an arbitral award on the merits in Bangladesh?
No. The grounds for challenging an award under Section 37 do not include an error of fact or law by the arbitrator. The grounds are limited to procedural and jurisdictional defects and violations of public policy.
What is the public policy ground for challenging an award in Bangladesh?
The public policy ground is interpreted narrowly by Bangladeshi courts. It covers awards that violate fundamental principles of justice, awards obtained by fraud or corruption, and awards that contravene mandatory provisions of Bangladesh law.
Does filing a challenge application stop enforcement in Bangladesh?
Filing the challenge application does not automatically stay enforcement. The applicant must separately apply for a stay, and the court has discretion to grant or refuse it based on the merits of the challenge and the balance of convenience.
Related articles: Alternative Dispute Resolution in Bangladesh | Arbitration Lawyer in Bangladesh | Commercial Arbitration in Bangladesh
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Contact TRW Law Firm
If you need expert legal advice on this matter, contact TRW Law Firm — one of Bangladesh’s leading law firms specialising in ADR, arbitration, and commercial litigation. Visit tahmidurrahman.com or tahmidur.com to speak with a specialist today.
