Amend Arbitration Act to attract investments

The Arbitration Act 2001 in Bangladesh should be amended immediately to clarify some issues and remove complexities, according to a paper today.

The paper was presented at a seminar on "Revisiting Arbitration Act for Promoting FDI in Bangladesh Organised by the Dhaka Chamber of Commerce &Industry (DCCI) in the capital.

It said the Arbitration Act 2001 is not applicable for arbitrations seated outside of Bangladesh. The courts in Bangladesh cannot grant interim remedies where the seat of arbitration is abroad.

"This issue can be mitigated by including provisions whereby interim measures shall apply irrespective of the fact that the place of arbitration is outside the country concerned."

Though AA 2001 grants the arbitral tribunal sufficient powers to order interim measures as the arbitral tribunal may deem necessary, it does not provide any clear guidance or restrictions in relation to the granting of the same.

It would be helpful if the AA 2001 is amended to adopt certain provisions relating to interim remedies which will be binding on the parties, said the paper.

"In this regard, we can look for guidance in the Indian Arbitration Act 1996, which provides that local courts shall not consider any application for interim measures after an arbitral tribunal has been constituted unless the court finds special circumstances which may justify granting the same."

Law, Justice and Parliamentary Affairs Minister Anisul Huq, British High Commissioner Robert Chatterton Dickson, and DCCI President Sameer Sattar spoke.

Ashraful Hadi, an advocate of the Supreme Court, presented the paper.

The paper said interim orders passed by an arbitral tribunal should be enforceable as if it was ordered by the court which will inevitably save time for parties to rush to the court for interim measures.

"It will also alleviate the court's problem of being overburdened with cases that causes delays."

In Bangladesh, it is time-consuming when parties cannot agree to the appointment of the arbitrator and go to the court for the appointment of the same.

It is suggested that the Act be amended to the effect that any application for appointment of arbitrators gets disposed of within a fixed period of time, according to the paper.

At present, there is no time limit on how long an arbitration proceeding can be dragged on.

The Act is silent about any standard timeline within which an arbitration proceeding should ideally be complete, certainly subject to necessary caveats. This needs to be addressed, said the paper. 

It said Bangladesh can become a suitable venue for arbitration among foreigners or foreign investors.