Arbitration award and enforcement in Bangladesh 2024

What is Arbitration in Bangladesh?

1. To resolve the disputes between the parties outside the Court.
2. Following an arbitration agreement between the parties.
3. It will be governed by an Arbitral tribunal and Arbitrators.

 

Types of Arbitration

Domestic Arbitration: 

If the place of arbitration is in Bangladesh and the enforcement of the arbitral award will be governed in the domestic court of Bangladesh, then it would be treated as domestic arbitration as per Arbitration Act 2001.

Foreign Arbitration:

 

If the place of arbitration is in another country and for the effectiveness of the arbitration, the enforcement of the arbitral award will be in another country then it would be considered as foreign arbitration.

 

What are the Proceedings of Arbitration in Bangladesh

Stage 1: Arbitration Agreement

1. First of all, there has to be an arbitration agreement. An agreement by the parties to submit their disputes (all/certain) to arbitration which have arisen or may arise in course of their legal relationship.
2. An arbitration agreement may be in the form of an arbitration clause in a contract. It shall be in writing.

 

Stage 2: Appointment of Arbitrators

1. The parties have to appoint an arbitrator who will conduct the arbitration.
2. Parties are free to determine the number of arbitrators but in case of failing the determination a number then the tribunal will consist of three arbitrators.
3. If there is an even number of arbitrators, then the appointed arbitrators shall jointly appoint an additional arbitrator who shall act as a Chairman of the tribunal.

 

Stage 3: Time limits for appointing Arbitrators

1. If one party requests another party for the appointment of the arbitrator and that party fails to agree on the arbitrator within thirty days from receipt of a request, then the appointment of the arbitrator shall be made by the District Judge in case of arbitration other than International Arbitration.
2. In case of International Arbitration, the Chief Justice or any other Judge of the Supreme Court designated by the Chief Justice will appoint the arbitrator.

 

What is Arbitral Award?

1. After resolving the disputes, when the Arbitral Tribunal will institute an award in favour of any party then it will be considered an Arbitral Award.

1. An arbitral award is made in pursuance of an arbitration agreement in the territory of any state other than Bangladesh.

 

What steps need to take to enforce Arbitral Award?

When the losing party does not want to give the arbitral award to the winning party, then the winning party can make an application to the District Judge Court of Dhaka for the execution of the arbitral award.

 

What Documents are required for the enforcement of the arbitration award 

1. the original arbitral award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made,
2. 2the original agreement for arbitration or a duly certified copy thereof; and
3. 3 such evidence as may be necessary to prove that the award is a foreign award.
4.  a translation into English order or award copy which shall be certified as correct by a diplomatic or consular agent of the country.

 

what are the grounds for refusing execution of foreign arbitral awards?

There are certain grounds for refusing recognition or execution of foreign arbitral awards;

1. If a party against whom it is invoked furnishes proof to the Court that
2. Incapacity of a party (minor/unsound mind/ disqualified by law)
3. The invalidity of the arbitration agreement
4. Inadequate notice of the appointment of an arbitrator
5. The arrangement of the arbitral tribunal was in accordance with the agreement
6. The award is being set aside, suspended or not binding on the parties
7. If the decision is beyond the scope of the submission to arbitration.
8. Or, when the Court finds that the Incapacity of settlement by the arbitration on the subject matter of the dispute is under the existing law.
9. Recognition or execution of awards is in conflict with the public policy of Bangladesh.

 

How to set aside an arbitral award?

1. The party has to make an application to set aside the arbitral award to the District Judge Court of Dhaka within sixty days from the receipt of the award.
2. In case of the foreign arbitral award, the High Court Division may set aside if the arbitration is held in Bangladesh on the application of a party within sixty days from the receipt of the award.

 

What are the grounds for setting aside an arbitral tribunal?

An arbitral award may be set aside if the party proves that-

1. He is under some incapacity
2. The arbitration agreement is not valid under the law to which the parties have been subjected to
3. The party did not get proper notice of the appointment of an arbitrator
4. There is a conflict between the arbitral tribunal and the agreement of the parties
5. The arbitral award deals with a dispute which does not fall within the scope of arbitration

Moreover, the arbitral award may be set aside if the court or High Court Division is satisfied that,

1. The subject matter of the dispute is not capable of settlement under the law of Bangladesh
2. The arbitral award is in conflict with the law of Bangladesh
3. The arbitral award is in conflict with the public policy of Bangladesh
4. The arbitral award is induced by corruption or fraud.

 

 When can we appeal against an arbitral award?

1. We cannot directly appeal against an arbitral award. We have to make an application first to set aside the arbitral award.
2. when the Court will give the order to set aside the arbitral award or refuse to set aside the award, we can appeal against the order of the Court.
3. Refuse to enforce a domestic arbitration award
4. Refuse to enforce the foreign arbitration award. 

 

Flowchart of Arbitration Process

Arbitration

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Arbitration Agreement

Appointment of arbitrators

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Arbitral tribunal

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Resolve the disputes according to the arbitration agreement

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Arbitral award

Scenario 1

If the losing party doesn’t want to give the arbitral award

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Make an application for execution of arbitral award in Court

Scenario 2

If the losing party is unhappy with the arbitral award

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Make an application for Setting aside the arbitral award

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The court will make an order to set aside or refuse to set aside

Scenario 3

If the party is unhappy with the Court order

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Appeal against the Court order

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