Arbitration that is reasonable and inexpensive is used to settle trade disputes more frequently than litigation.


Bangladesh’s commerce sector is expanding day by day despite numerous disagreements that are occurring in between. Most businessmen use arbitration as a method of resolving any conflict that arises outside of court. Arbitration is favored as a faster and cheaper alternative to litigation.


A Bangladeshi company called Khan IT and Services had been receiving computer accessories from a Singapore-based company called Limcon Technological Solution. This cross-border commerce accumulated debts of over Tk 378 crore as a result of Khan IT’s refusal to timely complete the payment from 2017 to 2019.

Limcon had to decide which of two options to use to solve this problem. One involves filing a case in a lower court against Khan IT, and another is resolved through secret proceedings that are essentially an arbitration process. And that foreign company decided to resolve the dispute through arbitration. They brought an arbitration case against Khan IT before the High Court in 2020. The High Court was subsequently constituted as a tribunal made up of two party members and a corporate executive. Additionally, the panel had 15 days to settle the conflict and submit a report to the court.

Following that, the High Court reported its decisions and instructed Khan IT to pay its debts in six installments.

The dues were promptly paid, according to the Bangladeshi representative of the Singaporean IT company. And a huge disagreement between the two parties was resolved quickly and cheaply in just two months. However, the situation would be completely different if Limcon had chosen the First option and had brought a lawsuit. Just getting to the verdict in the lawsuit would take three to ten years. So that case would qualify for an appeal to the superior court. 

The expense of handling these kinds of claims, according to barrister Ajmaul Hossain, a legal expert and arbitration practitioner, is significant. However, the arbitration process was private and less expensive than that.

Arbitration is considered more likely to be free of political influence because the parties can choose the arbitrators who will hear their dispute. The Arbitration Act was enacted in Bangladesh in 2001, and it was required that the Code of Civil Procedure be updated to reflect it. The Company Act also facilitates the resolution of commercial disputes.

According to Barrister Ajmaull Hossain KC, arbitration, an accepted international procedure, is like magic for business conflicts because it saves money, time, and effort. He explained the process of arbitration by saying that one of the disputing parties must file the arbitration with a civil court or, in the case of an international dispute, with the High Court. The court then appoints a panel that includes representatives from both sides. Before continuing, both parties declare that they will accept the panel’s recommendations.

The hearing is open to remote participation by the parties, who may also provide evidence to back up their claims.

According to the Supreme Court and the law ministry, there were around 14,000 arbitration cases filed with the High Court between 2017 and June of this year, totaling over Tk1.13 billion. 32,514 arbitration cases that had been filed with civil courts across the country at the time were settled, according to the official record. The hearings featured contested claims totaling a staggering Tk2.56 lakh crore.90% of commercial disputes are settled by arbitration, according to Barrister Tanzib-Ul-Alam, a corporate law expert, in the majority of the countries with the highest business-friendliness rating. He attributed the improved business environment to the increased effectiveness of extrajudicial dispute resolution.

He further stated that in order to further the already well-liked arbitration trend, stakeholders must act in concert. Additionally, a lot of multinational corporations continue to think that Bangladeshi court cases will never be resolved. They are unable to invest in Bangladesh as a result. The government must adjust its strategy to favor trade arbitration, he said.

Seven private companies already conduct arbitration outside of the courts in Bangladesh. The Bimac-Bangladesh International Mediation & Arbitration Center, the Bangladesh Institute of Arbitration, and the Arbitration & Mediation Center, Dhaka are a few of the leading law firms.

Picture and Article Source: The Business Standard & iPleaders

Share this post

Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »