Arbitration in Bangladesh: How it works and when courts intervene

Arbitration is intended to provide a faster alternative to court litigation for resolving commercial disputes, particularly in international contracts.

In Bangladesh, however, courts can become involved at several stages, including the appointment of arbitrators, interim protection and enforcement of awards.

The process depends on whether the contract provides for arbitration in Bangladesh or in another country.

In international commercial disputes, contracts often contain an arbitration clause that requires disputes to be settled through arbitration rather than conventional court proceedings.

In Bangladesh, such proceedings are governed by the Arbitration Act 2001.

When one party breaches a contract, the other party can issue a notice of arbitration and begin the process of forming an arbitral tribunal.

The parties generally appoint arbitrators according to the terms of their agreement.

If a party fails to appoint an arbitrator or refuses to cooperate in forming the tribunal, the High Court may appoint one.

The court may also issue interim protective orders where necessary.

Once the tribunal is formed, it considers the submissions and evidence presented by both sides before issuing an arbitration award.

The award can then be enforced in Bangladesh in accordance with the law.

If Dhaka is designated as the seat of arbitration, Bangladeshi courts retain supervisory jurisdiction over the proceedings.

This means the courts can become involved in certain matters arising during the arbitration process.

For contracts that designate another country as the seat of arbitration, the dispute is first resolved by an arbitral tribunal in that country.

The resulting award may then be brought before the relevant district judge's court in Bangladesh for enforcement.