Biz leaders urge dedicated commercial court as slow dispute resolution deters FDI

Business leaders and experts have urged the establishment of a dedicated commercial court with a trained judiciary to ensure faster and more focused resolution of commercial disputes, which play a crucial role in attracting foreign direct investment (FDI).

Speaking at a seminar organised by the Dhaka Chamber of Commerce and Industry (DCCI) at its office in the capital today, they said that slow settlement of commercial disputes is discouraging investors from coming to the country.

In response to this call, Commerce Secretary Mahbubur Rahman, attending the seminar as the chief guest, said, "We are working on a draft law to establish a commercial court which could be published [for public feedback] in a month. This court will deal with the commercial cases and specialised people or judges will be appointed."

Barrister Md Sameer Sattar, former president of DCCI, presented the keynote paper at the seminar titled "Advancing Dispute Settlement and Contract Enforcement for Businesses".

During the presentation, he said that contract enforcement is a crucial determinant for both local and foreign investors, but Bangladesh is lagging far behind in this regard.

Michael Miller, ambassador & head of delegation of the European Union (EU) in Bangladesh and Md Abdur Rahim Khan, additional secretary (Export Wing) of the Ministry of Commerce & vice chairman of the Export Promotion Bureau (EPB) (additional charge), attended as special guests.

DCCI President Taskeen Ahmed presided over the seminar and presented welcome remarks.

Commerce Secretary Mahbubur Rahman said, "It is very unfortunate that business cases remain pending in the courts. This reflects the inefficiency of the system. In Dubai, Singapore, and Rwanda, efficient courts have helped attract foreign investment. I agree with this approach, but unfortunately, we have not been able to implement such a system here."

He said the arbitration law came into effect in 2001, but a conducive environment for out-of-court settlements has not been created. 

He highlighted two issues: establishing a commercial court and promoting amicable out-of-court resolution, noting that business disputes should be settled efficiently rather than through prolonged court cases.

Emphasising alternative settlement, Mahbubur said that resolving business and trade cases out of court is clearly the best approach.

DCCI President Taskeen Ahmed said that as economic activity in the country grows, disputes over business contracts, investments, and intellectual property are also increasing. Currently, around 40 lakh cases remain unresolved in Bangladesh's lower and higher courts.

He mentioned that prolonged judicial processes are hampering both local and foreign investment. Although the Arbitration Act was enacted in 2001, it has not been implemented effectively. 

Taskeen stressed the need to establish a separate Commercial Court with experienced judges and to reform the existing legal framework to accelerate trade and investment.

EU Ambassador Michael Miller said that in order to reform the legal process, the EU has been working closely with the government. The legal reform will significantly improve the public's quality of life. 

As Bangladesh moves toward LDC graduation and export diversification, Miller said establishing commercial courts is crucial to attract investment and facilitate its growth. 

He urged the government to prioritise this, noting that stronger arbitration mechanisms could reduce investment stagnation, and added that European companies are keen to invest in the country's logistics and shipping sectors.

Md Abdur Rahim Khan, vice chairman of the EPB, said that delays in resolving commercial disputes not only hinder FDI but also negatively impact export expansion. Besides, due to this, Bangladesh is gradually losing its place in global trade. 

To overcome this, he proposed forming "legal institutions" outside traditional courts to resolve disputes through negotiations in a comparatively shorter time."

Md Ariful Haque, director general at Bangladesh Investment Development Authority (Bida), stressed that enacting laws alone is not sufficient to change the existing system; rather, institutional reforms are also crucial.

KAM Majedur Rahman, CEO of Bangladesh International Arbitration Centre (Biac), said that delays in commercial dispute resolution have become a matter of serious concern.

Vikna Rajah, co-head, South Asia desk, Rajah and Tann, Singapore, highlighted that Singapore continues to attract high levels of foreign investment due to strong legal structures, skilled human resources, strict law enforcement, and robust commercial dispute settlement mechanisms.

He stressed the need for comprehensive legal reforms, the establishment of specialised commercial courts, and the revision of the Arbitration Act in Bangladesh to attract more foreign investment.

Judge Tareque Muajjem Hussain, special officer to the Chief Justice of Bangladesh (additional district judge), stressed the need to appoint experienced judges specialised in commercial disputes, along with proper training, which will ensure smooth and faster dispute resolution.

In the open floor discussion, Rizwan Rahman, former president of DCCI, said that the lack of inter-ministerial coordination is one of the major barriers to resolving commercial disputes.