Introduction: Why Bangladesh Matters for Arbitration?
Arbitration in Bangladesh has emerged as a preferred method of dispute resolution for both domestic and international parties seeking efficiency, confidentiality, and enforceability. Governed primarily by the Arbitration Act, 2001, the framework supports both domestic arbitration and foreign arbitral awards, aligning with global standards such as the New York Convention. This article outlines 7 key considerations that clients—whether Bangladeshi or foreign—should evaluate before initiating or responding to arbitration proceedings, enriched by insights from leading practitioners at Equity Law House, a Dhaka-based firm known for its strategic expertise in arbitration and civil-commercial, construction disputes.
Bangladesh is emerging as a strategic hub for cross-border investment, infrastructure development, and commercial expansion. With its growing economy and increasing foreign direct investment (FDI), disputes are inevitable—but resolution need not be disruptive. Arbitration offers a confidential, efficient, and enforceable alternative to litigation. For both national and international clients, understanding the nuances of Bangladeshi arbitration is essential to safeguarding commercial interests.
07 Key Considerations for Clients
1. Arbitration Framework in Bangladesh: Governing Law and Jurisdiction
Bangladesh’s arbitration regime is governed by the Arbitration Act 2001, which reflects the principles of the UNCITRAL Model Law. The Act distinguishes between domestic and international arbitration, with courts playing a supportive role.
- Domestic and International arbitration, including enforcement of foreign awards, both are governed by the Act..
- Bangladesh is a signatory to the New York Convention, enabling recognition of foreign arbitral awards.
Key Features of Laws:
- Party autonomy in choosing arbitrators and procedural rules.
- Judicial support for interim measures under section 7A of Arbitration Act 2001.
- Limited grounds for setting aside awards, ensuring finality under section 42, 43, 44.
- Anti-suit Injunction to bar Civil Suits under section 7 of Arbitration Act 2001.
- Foreign Award enforcement.
2. Drafting Arbitration Clauses
Poorly drafted clauses can derail dispute resolution. Ensure:
- Clear seat of arbitration (Dhaka or abroad).
- Language of proceedings.
- Institutional vs. ad hoc arbitration.
- Governing law and scope of disputes.
- Include scope of disputes.
✅ Tip: Use model clauses from ICC, SIAC, or BIAC, tailored to Bangladeshi law context (i.e. Arbitration Act 2001). Avoid vague terms like “any dispute shall be resolved amicably” without specifying arbitration as the final mechanism.
3. Choosing the Right Forum: Adhoc vs Institutional both available!
Bangladesh International Arbitration Centre (BIAC) offers:
- Institutional support.
- Panel of experienced arbitrators.
- Facilities for hearings and mediation.
International clients may prefer CiADR for neutrality and global enforceability and Online Dispute Resolution.
4. Bangladesh Arbitration Tribunals: Composition and Appointment
Tribunals may consist of:
- A sole arbitrator for streamlined proceedings
- A panel of three arbitrators for complex or high-value disputes
The Arbitration Act allows parties to appoint arbitrators directly or through institutions. Courts may intervene if parties fail to agree, ensuring neutrality and procedural integrity.
5. Arbitration Timelines in Bangladesh: Speed and Cost Control
Compared to litigation, arbitration offers:
- Faster resolution (typically 6–12 months)
- Confidentiality and procedural flexibility
- Predictable costs through capped fees and early case management
At Equity Law House, emphasizes proactive planning to avoid procedural delays and cost overruns.
6. Enforcing Foreign Arbitration Awards in Bangladesh
Under the New York Convention, foreign awards are enforceable unless:
- The arbitration agreement was invalid
- The award violates public policy
- The party was not given proper notice
Bangladeshi courts generally uphold foreign awards unless procedural irregularities are evident.
7. Court-Assisted Arbitration in Bangladesh: Interim Relief Explained
Parties may seek interim measures from courts before or during arbitration, including:
- Injunctions
- Asset freezing orders
- Preservation of evidence
This hybrid model strengthens arbitration’s effectiveness while maintaining judicial oversight where necessary.
️ Ethical Positioning: Fairness, Transparency, and Inclusion
Arbitration must not be a tool for power imbalance or procedural opacity. At Equity Law House, we advocate:
- Inclusive access to arbitration for SMEs and marginalized stakeholders.
- Transparent billing and procedural clarity.
- Gender-sensitive and culturally aware arbitrator selection.
- Shariah-compliant options for Islamic finance disputes.
- Advises clients based on dispute complexity, cost sensitivity, and enforcement goals. Emphasizes early case assessment and procedural planning to avoid delays.
Ethical arbitration isn’t just good practice—it’s good business. Bangladesh is fast becoming a key player in regional and international dispute resolution. Whether you’re a local entrepreneur or a multinational investor, understanding the arbitration landscape here is essential.
Trends and Opportunities
| Trend | Implication |
|---|---|
| Rise in construction and infrastructure disputes | Need for delay analysis and cost escalation expertise |
| Growth in foreign investment | Increased demand for cross-border arbitration clauses |
| Digital transformation | Virtual hearings and e-discovery becoming standard |
| ESG and ethical finance | Arbitration clauses reflecting sustainability and compliance |
FAQs
Q: Can foreign companies arbitrate in Bangladesh?
Yes. The Arbitration Act allows international arbitration seated in Bangladesh or abroad, with enforceability under the New York Convention.
Q: Is arbitration faster than litigation in Bangladesh?
Generally, yes—especially with institutional support and streamlined procedures.
Q: Can interim relief be obtained before arbitration begins?
Yes. Courts can grant interim measures under Section 7A of the Arbitration Act once send request of Arbitration under section 27 of Arbitration Act.
Q: Is arbitration in Bangladesh legally binding?
Yes, arbitral awards are binding and enforceable under the Arbitration Act, 2001.
Q: What’s the difference between ad hoc and institutional arbitration?
Ad hoc arbitration is party-driven and flexible; institutional arbitration follows set rules and offers administrative support.
Final Thoughts
Arbitration in Bangladesh offers a viable, enforceable, and increasingly sophisticated mechanism for dispute resolution. Whether you’re a national client navigating local contracts or an international investor managing cross-border risks, understanding these 7 key considerations can help you structure your arbitration strategy effectively.
At Equity Law House, we don’t just resolve disputes—we build resilient legal strategies. we explore:
✅ The legal framework and UNCITRAL alignment
✅ Drafting airtight arbitration clauses
✅ Institutional vs. ad hoc arbitration (BIAC, ICC, SIAC)
✅ Ethical positioning: transparency, inclusion, and Shariah-compliant options
✅ Enforcement of domestic and foreign awards
✅ Trends in construction, ESG, and digital arbitration
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