Commercial arbitration in Bangladesh is the preferred mechanism for resolving business disputes, offering speed, confidentiality, technical expertise, and internationally enforceable awards. Governed by the Arbitration Act 2001 and administered by institutions such as BIAC and BIArb, commercial arbitration in Bangladesh provides businesses with a reliable alternative to court litigation for resolving contractual and commercial disputes.
The Legal Framework for Commercial Arbitration in Bangladesh
Commercial arbitration in Bangladesh is governed by the Arbitration Act 2001, which is modelled on the UNCITRAL Model Law on International Commercial Arbitration. The Act provides a comprehensive framework for the conduct of arbitration proceedings, from the arbitration agreement to the enforcement of the award. Bangladesh is also a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which ensures that Bangladeshi arbitral awards are enforceable in over 170 countries.
The Commercial Arbitration Process in Bangladesh
Step 1: Commencing Arbitration
Commercial arbitration in Bangladesh commences when one party serves a notice of arbitration on the other party, invoking the arbitration clause in their contract. The notice must specify the dispute, the relief sought, and the arbitration agreement relied upon. If the arbitration is administered by BIAC or BIArb, the claimant files a request for arbitration with the institution.
Step 2: Appointment of the Arbitral Tribunal
The parties may agree on a sole arbitrator or a three-member tribunal. If they cannot agree, the arbitral institution (BIAC or BIArb) appoints the arbitrator(s). The arbitrators must be independent and impartial and must disclose any potential conflicts of interest.
Step 3: Exchange of Pleadings
The claimant files a statement of claim setting out the facts, legal arguments, and relief sought. The respondent files a statement of defence. The claimant may file a reply. The pleadings define the issues in dispute and the evidence that will be presented at the hearing.
Step 4: Document Disclosure
The parties exchange relevant documents. The arbitral tribunal may order specific document production if a party fails to disclose relevant documents voluntarily.
Step 5: The Hearing
The arbitral tribunal holds a hearing at which the parties present their cases, examine witnesses, and make oral submissions. The hearing is conducted in private and is confidential.
Step 6: The Award
The arbitral tribunal issues its award, which is binding on the parties. The award must be in writing, signed by the arbitrators, and state the reasons for the decision. The award is enforceable as a court decree under Section 45 of the Arbitration Act 2001.
Cost of Commercial Arbitration in Bangladesh
The cost of commercial arbitration in Bangladesh includes the arbitral institution’s administrative fees, the arbitrators’ fees, and the parties’ legal fees. BIAC charges administrative fees based on the amount in dispute, and arbitrators’ fees are set by the institution. Legal fees vary depending on the complexity of the dispute and the seniority of the lawyers involved. While commercial arbitration is more expensive than court litigation for small disputes, it is generally more cost-effective for complex, high-value disputes because of its speed and efficiency.
Enforcement of Commercial Arbitration Awards in Bangladesh
A domestic commercial arbitration award is enforceable as a court decree under Section 45 of the Arbitration Act 2001. The award creditor files an application in the competent court, attaching the award and the arbitration agreement. The court serves notice on the award debtor and, if satisfied that the award is valid, passes an enforcement order. The award creditor may then execute the decree against the award debtor’s assets using the standard execution mechanisms under the CPC.
TRW Law Firm: Commercial Arbitration Services in Bangladesh
TRW Law Firm has extensive experience in commercial arbitration in Bangladesh, representing clients in BIAC, BIArb, and international arbitrations across all sectors. Contact TRW at tahmidurrahman.com or visit tahmidur.com.
Frequently Asked Questions
How long does commercial arbitration take in Bangladesh?
BIAC arbitrations typically conclude within 6 to 18 months, depending on the complexity of the dispute. This is significantly faster than court litigation, which can take years.
Is commercial arbitration confidential in Bangladesh?
Yes. BIAC and BIArb arbitration proceedings are confidential. The parties, their lawyers, and the arbitrators are all bound by confidentiality obligations.
Can I appeal a commercial arbitration award in Bangladesh?
There is no right of appeal against a commercial arbitration award on the merits. The only recourse is to apply to set aside the award under Section 37 of the Arbitration Act 2001 on the limited grounds specified in that section.
Related articles: Alternative Dispute Resolution in Bangladesh | Arbitration Lawyer in Bangladesh | BIAC Arbitration Bangladesh
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Contact TRW Law Firm
If you need expert legal advice on this matter, contact TRW Law Firm — one of Bangladesh’s leading law firms specialising in ADR, arbitration, and commercial litigation. Visit tahmidurrahman.com or lawfirm.com.bd to speak with a specialist today.
