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Mediation in Bangladesh: A Complete Overview

Barrister Remura Mahbub
Director, Tahmidur Remura TLS, Law Firm in Bangladesh

12 Nov 2022

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The purpose of this article is to explain the entire process of mediation in Bangladesh: provisions that regulate mediation, step by step procedure, mediation agreement, costs, timeline etc.

What is ADR or Mediation in Bangladesh?

 Alternative Dispute Resolution (ADR) is an  alternative route to a quicker and cheaper method of settling disputes in which a neutral third party helps the disputing parties reach a resolution.  Mediation is one of the major forms of ADR, the other two being arbitration and conciliation.  Section 89A  of Code of Civil Procedure is the main provision of mediation in Bangladesh. 

Mediation in Bangladesh is a procedure in which the conflicting parties  attempt, with the assistance of a neutral third party (the Mediator), to reach a settlement of their disputed issues through negotiation.

 When a consensus is reached, the parties may call upon the services of the Mediator or one of their lawyers to draft a document that they will sign in order to record and finalize the consensus.  This official document will be known as their settlement agreement, which will binding on the parties.

 

Mediation In Bangladesh

Benefits of Mediation in Bangladesh

As mentioned above, medication is less expensive and more quicker than going to the court which allows the parties to move on from the issue more swiftly. Mediation enables you to retain control. In mediation, unlike in court where a judge makes the decisions, you select how to settle the disagreement and are not required to accept a conclusion with which you are unsatisfied.

Mediation offers  an encouraging and private environment.  The mediator will listen to all perspectives, speaking with the parties individually and when necessary, with all the opposing parties in the same room.

Mediation can aid in the preservation of relationships. A dispute that is resolved by an antagonistic court battle can strain the relationship between the parties.  However, mediation helps you focus on effective communication in order to create solutions that work for everyone. Hence, mediation in Bangladesh are especially encouraged for disputes in partnership, family law, property neighbours, businesses, etc.

Another instrumental benefit of mediation in Bangladesh is confidentiality. Since mediation is an attempt to resolve their disputes through facilitated negotiation, all discussions between the parties (whether with one another or privately with the mediator) will be “without prejudice.” “Without prejudice” means that any information resulting from mediation sessions must be viewed as both confidential and non-binding by all parties. Non-compellable indicates that neither party will raise such material in any legal procedure. Consequently, neither party may request or require the mediator to furnish information, give testimony, or produce documents in any legal case regarding the substance of any of the mediation sessions. The entire mediation process will be absolutely confidential. 

 

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Step by Step Procedure of Mediation

Appointment of a Mediator:

  The first step in commencing mediation in Bangladesh is to appoint a mediator, which will be determined by both parties. Mediator’s goal is to assist the parties in obtaining their own most constructive and equitable agreement. The Mediator has an obligation to work equally on behalf of each party, cannot provide individual legal advice to any party, and will not engage in therapy during the mediation. The respective clients and mediator will negotiate and define the fees and procedure to be followed in order to reach a settlement through mediation.  

Costs of Mediation:

Consequently, the cost of hiring the mediator will be covered by both parties.

Mediation Sessions:

It is understood that most mediation sessions will involve both parties in joint sessions with the Mediator, but separate meetings may be held between the Mediator and the parties individually before and during the mediation. If the Mediator requests a separate meeting with one party during a mediation session, he or she will also have a separate meeting with the other party.

Time Frame:

If the court itself refers mediation to the parties, then  under section 89A, sub-section (1), the parties shall inform the Court in writing of the mediator they have appointed within ten days from the date of reference. If the parties fail to appoint a mediator during this period, the Court shall, within seven days, appoint a mediator and the mediation under this section shall be concluded within sixty (60) days from the day the Court is so informed unless the Court of its own motion or upon a joint request of the parties, extends the time for a further period of 30  days.

In the case on non-court referred mediation in Bangladesh, if the parties have not already fixed the duration of mediation process in their mediation agreement, the parties themselves can determine the time frame within which they desire to conclude the mediation. The suggested timeline may range from 30 days to 90 days, depending on the complications of the issue at hand. 

Settlement Agreement or Court Decree

When a consensus is established, the parties may request the Mediator’s or one of their attorneys’ assistance in drafting a document that both the parties and mediator will sign to record and finalize the agreement. This official document will be known as the parties’ settlement agreement and will be legally binding.

In the case of court referred mediation in Bangladesh, the Legal Aid Officer or mediator will submit to the court a report of the result of the mediation proceedings, and if the result is a compromise of the  disputes in the suit, the terms of such compromise shall be reduced to writing in the form of an agreement, bearing signatures or left thumb impressions of the parties as executants, and signatures of the Legal Aid Officer or mediator. Court will pass an order or a decree in accordance with relevant provisions of Order XXIII of the Code of Civil Procedure within seven days from receiving the said report.

Here is a table that outlines the general step-by-step procedure for mediation in Bangladesh:

StepDescription
1The parties to the dispute agree to mediate or are ordered by a court to participate in mediation.
2A mediator is selected or appointed. The mediator should be neutral and have the necessary skills and experience to facilitate the mediation process.
3The mediator meets with the parties to explain the mediation process and discuss their needs and interests. The parties may also be asked to sign a mediation agreement, which sets out the terms and conditions of the mediation.
4The parties meet with the mediator to discuss the issues in the dispute and explore options for resolution. The mediator helps the parties to communicate effectively, identify common ground, and brainstorm potential solutions. The mediator may also meet with the parties separately (in “caucuses”) to facilitate the negotiation process.
5If the parties are able to reach an agreement, the mediator will help them to draft a written settlement agreement. The agreement should be clear, concise, and reflect the parties’ intentions. The parties may wish to have their lawyers review the agreement before signing it.
6If the parties are unable to reach an agreement, the mediation process is terminated. The parties may choose to pursue other dispute resolution options, such as arbitration or litigation.

I hope this table is helpful! Please note that this is a general outline and the specific steps and procedures may vary depending on the circumstances of the case and the preferences of the parties and the mediator. Let us know if you have any questions or need more information.

Here is a table with ten frequently asked questions about mediation in Bangladesh:

Q:What is mediation?
A:Mediation is a voluntary process in which a neutral third party (the mediator) helps the parties to a dispute communicate and negotiate a resolution. The mediator does not have the authority to make a decision on the dispute, but rather helps the parties come to an agreement on their own.
Q:When is mediation used in Bangladesh?
A:Mediation can be used at any stage of a dispute, whether it is before a lawsuit is filed, during the course of litigation, or after a judgment has been rendered. Parties can choose to mediate their dispute voluntarily, or they may be ordered by a court to participate in mediation as part of a pre-trial settlement conference or as a condition of appeal.
Q:Who can be a mediator in Bangladesh?
A:In Bangladesh, mediators are typically lawyers, judges, or other professionals with specialized training in conflict resolution. The mediator should be neutral and have the necessary skills and experience to facilitate the mediation process.
Q:Is mediation confidential in Bangladesh?
A:Yes, mediation is generally confidential in Bangladesh. The parties to the mediation and the mediator are required to keep the proceedings and any information disclosed during the mediation confidential, unless the parties agree otherwise.
Q:Is the mediator’s decision binding in Bangladesh?
A:No, the mediator does not have the authority to make a decision on the dispute. The mediator’s role is to facilitate communication and negotiation between the parties and help them reach a mutually-acceptable agreement. If the parties are able to reach an agreement through mediation, they may choose to reduce it to writing and have it signed by the mediator as a record of the agreement.
Q:Can the parties bring lawyers to the mediation in Bangladesh?
A:Yes, the parties are free to bring lawyers or other advisers to the mediation if they wish. The mediator may also choose to involve other professionals, such as financial advisers or experts in a particular field, if necessary to assist in the resolution of the dispute.
Q:How long does mediation take in Bangladesh?
A:The length of the mediation process can vary depending on the complexity of the dispute and the willingness of the parties to negotiate. Some mediations may be resolved in a single day, while others may take several days or even weeks.
Q:Is mediation expensive in Bangladesh?
A:Mediation can be less expensive than litigation or arbitration because it is typically quicker and less formal. The parties are responsible for paying the mediator’s fees, which can vary depending on the mediator’s experience and the nature of the dispute.
Q:Is mediation successful in Bangladesh?
A:Mediation is successful in resolving disputes in a majority of cases. According to the Bangladesh Mediation Centre, over 70% of cases referred to mediation result in a settlement.
Q:Can the parties appeal the mediator’s decision in Bangladesh?
A:No, the mediator does not have the authority

 

                 

Mediation In Bangladesh
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Are you planning to do arbitration or  looking for alternative dispute resolution remedies in Bangladesh?

 

Tahmidur Rahman Remura TLS is a full-service law firm that has been dealing with arbitration consisting of a wide range of topics at both international and local level. We have barristers that have specialised in  international commercial arbitration from the United Kingdom and accredited civil-commercial mediators. 

If you require any assistance or consultation, please visit our office or contact us at +8801779127165 or +8801847220062 (WhatsApp) or by email- [email protected] 

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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 or One Person Company (OPC).

A private limited company must have at least two shareholders. 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 allocate to 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 Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

Meheruba 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: [email protected]

Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

Gender: Female

Job Title: Barrister and Senior Associate

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