Abstract

Commercial Dispute Settlement is the process by which one or more parties settle or
resolve any dispute arising in commercial transaction. So this process is very
important in commercial transactions both in domestic and international. This article
discusses settling commercial disputes by using different mechanisms of ADR
(Alternative Dispute Resolution) available for the entrepreneurs. In this research
work, the authors have tried to discuss different commercial dispute settlement
institutions, their necessities, purpose and conduct for the settlement of specific types
of disputes of an economic (“commercial”) nature. Though ADR mechanisms are
quasi formal or informal in their nature ADR may be deemed (categorized) as an
integral part of our judicial organ of the state. And in this work the authors have tried
to find out the scope and limitations of ADR mechanisms in commercial dispute
settlement besides all other dispute_ civil and criminal through ADR institution
formed whether privately or governmentally. This research project also suggested few
recommendations so as to followed by the authority to improve the facility of
commercial dispute settlements mechanisms in Bangladesh.
Keywords: ADR, Dispute, Commercial Transaction, Dispute Settlement, ODR
Chapter-1
Introduction

Introduction
The term "alternative dispute resolution" or "ADR" is often used to describe a wide
variety of dispute resolution mechanisms that are short of, or alternative to, full-scale
court processes. The term can refer to everything from facilitated settlement
negotiations in which disputants are encouraged to negotiate directly with each other
prior to some other legal process, to arbitration systems or minitrials that look and feel
very much like a courtroom process. Processes designed to manage community
tension or facilitate community development issues can also be included within the
rubric of ADR. ADR systems may be generally categorized as negotiation,
conciliation, mediation, or arbitration systems.

In some legal systems the word “Commercial” is a technical term of great legal
significance. In other legal systems the word has no particular legal connotation. So,
there is no clear concept of what is meant by “commercial” but it has been given a
wide interpretation so as to cover matters arising from all relationships of a
commercial nature, whether contractual or not. Relationships of a commercial nature
includes: any trade transaction for the supply or exchange of goods or services;
exploitation agreement or concession; licensing; distribution agreement; carriage of
goods or passengers by air, sea, rail or road; commercial representation or agency;
factoring; leasing; construction of works; consulting; engineering; investment;
banking; insurance; financing; joint venture and other forms of industrial or business
co-operation. Each contracting parties reserves the right to limit their obligation as to
contracts which are considered as commercial under its national law and agree to
submit to dispute settlement mechanisms all or any differences that may arise in
connection with such contract relating to commercial matters or to any other matter
capable of settlement by it.1

Commercial Dispute Settlement is the process by which one or more parties settle or
resolve any dispute arise in commercial or financial transaction. A commercial
dispute can be settled much sooner between the parties with ADR; often in a matter of
months, even weeks, while bringing a lawsuit to trial can take a year or more. As it
takes much less time to resolve the dispute through ADR, the parties are able to save
money, which they would have spent on attorney fees, court costs, and experts’ fees
etc. In most of the commercial dispute settlement mechanisms, both parties have more
opportunity to express their demand or side of the story than they do at trial So this
process is very important in commercial transactions both in domestic and
international.

Statement of the Problem

There may be mentioned some important issues relating to commercial dispute

settlement which are as follows :
1
Abdullah-Al- Monzur Hussain, 'Commercial Dispute Settlement in Bangladesh: A Critical Review'
[2017] AUST JST, Volume 6.
We are alarmed to learn that a backlog of around 42 lakh(41,96,603)2 cases is pending
with courts across the country, including the Appellate and High Court Divisions of
the Supreme Court. This is causing immense suffering for litigants who have seen
their legal fees increased (making it hard to pursue justice for many) with the addition
of stress which comes with long-unresolved cases.

Even though Bangladesh has a sound legal framework with the High Court providing
an appropriately powerful forum for enforcement of fundamental rights and for
judicial review of administrative action but there is a significant concerns as to the
accessibility of the court system. There is huge backlog of cases as evidenced by
official statistics and due to procedural delays; timely commercial dispute resolution
is not often available.

As a developing country, our economic growth is decidedly reliant upon investment

both from the internal private sector and outside the country, therefore, a quick and
ease of commercial dispute settlement procedure has always been one of the most
important considerations for any investor to do business here. Delayed resolution of
any commercial dispute has adverse impact on the economy both from micro and
macroeconomic viewpoint that eventually impeding our economic growth
significantly.

Though ADR systems plays an important role supplementing judicial organ of the
state to reduce case backlogs there is no noticiable development in ADR departmeent
in its lagal, institutional and financial sector.

The lack of any comprehensive review and updating of substantive laws is a

significant issue. There are only few mechanisms in place to prevent or reduce delays
with regard to case management. Technical and personnel limitations also exist, for
example, the absence of any system for recording transcripts of hearings as well as the
lack of recording, transcribing or computer facilities. The implications of these delays
are, therefore, not providing for effective resolution of commercial disputes, most
particularly because it does not offer timely resolution. Entrepreneurs’ require a very
simple, quick, efficient and straightforward approach to resolve commercial dispute,
so an investment culture that allows for effective commercial dispute resolution
system would clearly benefit Bangladesh, which will promote local or foreign
investment and thereby increase the economic growth for Bangladesh.

Objectives of the Study

The judiciary is one of the main organs of the government. This organ is busy to settle
the ordinary cases. It does not show any interest to handle commercial dispute
settlement. They are picked up with huge pending cases. So, it is needed to improve
our Alternative Dispute Resolution (ADR) system. It is also added that the number of
judges working in the judiciary is not sufficient enough to dispose rapidly pending
ordinary cases in our country. But it is not possible to recruit such huge number of
judges for a developing country like Bangladesh. Our government is trying to
2
Riadul karim, ‘Independence of the judiciary remains golden deer’,Prothom Alo (Dhaka, Aug.
30,2023).
improve alternative procedure to settle ordinary cases rapidly by amending legal
provision like alternative dispute resolution in different existing Act. But our legal
system is not incorporated to the settlement of commercial dispute for increasing
present crisis. So it is badly need to establish a model of body for this purpose. There
are some objectives sets for these studies are,

to find out how a commercial dispute is settled in Bangladesh by using different ADR
mechanisms in Bangladesh;
to indicate the problem of present mechanisms and measures in Bangladesh;
to find out the appropriate measure for commercial dispute settlement among the
existing ADR (Alternative Dispute Resolution) mechanisms; and
to find out the appropriate authority for enforcement of commercial dispute settlement
under the umbrella of ADR related legislation and institution.

Methodology and Data Collection

There is no single or universal approach to legal research methodologies. The legal

research may be of combination of methods for interpreting and applying legally
relevant information. There are several approaches to research methodologies such as
analytical, inter disciplinary, comparative and historical. For better understanding the
research and good work of this research mainly I follow the analytical approach. This
methodology is a train and significant investigation of the principles and fact of any
subject. This method is a systematic enquire that provide information to guide legal
research. It also and important to gain reliable and valid knowledge and to explore the
relationship between theory and practices When I am going to prefer the research I
have followed some strategies. I have taken reference from books, journal, Newspaper
and internet. I have visited more than place for the collection of instruments related
with this research. But I have not found sufficient reference in Comilla University
library and in any District Court where I visited. Research reports and publications of
various organizations working with the ADR in Bangladesh, journals, reports,
booklets, newsletters, photographs, and newspaper clippings have been reviewed.
Existing information have also been extracted from various aspects to enable readers
to understand this national issue relating to this topic from various perspectives.

1.5 Justification of the Study

Different Commercial Dispute Mechanisms are a part of the business nowadays and
have positive effects in the economy. 3 A commercial dispute can be settled much
sooner between the parties with Alternative Dispute Resolution (ADR); often in a
matter of month, even weeks, while bringing a lawsuit to trial can take a year or more.
As it takes much less time to resolve the dispute through Alternative Dispute
Resolution (ADR), the parties are able to save money, which they would have spent
on attorney fees, court costs and experts’ fees etc. In most of the Commercial Dispute
Settlement Mechanisms, both parties have more opportunity to express their demand
or side of the story than they do at trial. In mediation, parties are allowed to fashion
creative resolutions that are not available in a trail; therefore they can typically play a
greater role in shaping both the process and its outcome. Other commercial dispute
settlement processes, such as Arbitration, allow the parties to choose an expert in a
particular field to decide the commercial dispute. Alternative Dispute Resolution
3
Julian D M Lew, Mistelis, Stefan, ‘Comparative International Commercial Arbitration’ [2003] KLI.
(ADR) is considered to be a less adversarial and hostile way to resolve a dispute, for
example, an experienced mediator can help the parties effectively communicate their
demand and point of view to the other side. This can be an important advantage where
the parties have a relationship to preserve but in a trial, there is typically a winner and
a loser. The losing party is not likely to be happy, and even the winner may not be
completely satisfied with the outcome. Such a case Alternative Dispute Resolution is
able to help the parties to find win-win solutions and achieve their real expectation.
Thus, along with all of Alternative Dispute Resolution (ADR)’s other potential
advantages, may increase the parties overall satisfaction with both the dispute
resolution process and the outcome. Quick, cost effective and satisfying resolutions
are likely to produce happier clients and thus generate continuing business with the
parties. Due to the above potential advantages, the entrepreneurs’ consider different
commercial settlement mechanisms to resolve their dispute.

1.6 Scope and Limitations of the study

Increasing backlogs in commercial dispute like other disputes_civil or criminal will

increase major challenges not only on the government, it is also a huge economical
and social challenge in our country Bangladesh. To reduce these category of
challenges our government, Ministry of Law and Parliament, Ministry of Commerce
and judicial organ of the state sincerely taking some necessary measures. Bangladesh
Government has promulgated the following Acts for the effective application of
Alternative Dispute Resolution (ADR) procedure for dispensing the commercial
dispute outside the court:

Sections 89A, 89B and 89C in the Code of Civil Procedure, 1908
The Bankruptcy Act, 1997
The Arbitration Act, 2001
Arthorin Adalat Ain, 2003

At the present time study and research on proper implementing ADR in commercial
disputes is more important in our country for reducing case backlogs and for
maintaining corporate financial stability.

1.6.a Scopes
There are some scopes of studying on implementing ADR in commercial disputes—

the government has enacted various laws and ammended some existing laws for the
purposes of implementing ADR in commercial dispute;
that there are more information and data on internet about Commercial dispute
settlement;
that there are more writings;
that there are more relevant books;
that media – TV and Newspaper media work more on this study;
that there are more scholars who has the real knowledge and experience about various
commercial dispute settlement with ADR mechanism; and
that the educated people are more sincere now to reduce wasting their time, energy
and money in foramal adjudicating system etc.
1.6.b Lmitation
On conducting this research study I have also faced some challenges and limitations
such as:

people are less interested in the interview programme;

I cannot directly interview the ADR related problem person or any public body;
there are less footsteps in the field of ADR;
philosophical and practical experiences abot this study are very poor;
various corporate personality are contradictory to each other that they are not willing
to sit face to face;
some writers spread the confusing information;
currently, ADR related cases are not available;
it’s not only a demestic issue but also international for whice it can be said that the
implementation area of ADR is the whole world;
unlike litigation practice ADR mechanisms are more applicable in transactional or
commercial practice;
the major problem of the study was time limitation. For an analytical purpose
adequate time is required. But I was not given adequate time to prepare such an in-
depth study;
such a study was carried out by me for the first time. So inexperience is one of the
main factors that constituted the limitation of the study;
the main constraint of the study is lacking relevent appropriate information on these
issues;
the most important limitation not permission for using Library in my University all
time; and
thus why mainly I have to depend on internet.

After a wide discussion it can be said that though there are some challenges and
limitations in studying about implementation of ADR in commercial disputes there
are more importance of the study.

Literature Review

There are many good Journals, News portal, Books and Articles related to the topic of
my research. Some of these are reviewed below:

Aminul Islam a student of Dhaka University submitted a thesis titled "Effectiveness

of Alternative Disputed Resolution on The Recovery of Non-performing Loans under
Artha Rin Adalat: A Study on nationalized Commercial Banks in Bangladesh"

The author in this thesis discussed elaborately about effectiveness of ADR on the
recovery of non-performing loans under Artha Rin Adalat Ain, 2003.

Abdullah-Al- Monzur Hussain Assistant Professor & Coordinator, School of Law,

Canadian University of Bangladesh wrote an journal titled "Commercial Dispute
Settlement in Bangladesh: A Critical Review"
In this article the author briefly discussed about commercial dispute and necessity of
ADR mechanism setting these disputes.

Md. Jahurul Islam and Md. Rezaul Haque Department of Law, Khwaja Yunus Ali
University, Sirajganj, Bangladesh wrote a journal titled "Position of Bangladesh in
International Commercial Arbitration: An Analysis"

In this Journal the authors discussed about development and position of Bangladesh in
implementing international Commercial Dispute settlement by ADR mechanism.

Rakiba Nabi a lecturer, Department of Law, University of Chittagong, Bangladesh

conducted a research on "Promoting International Relations through Commercial
Arbitration Law : the International Context and the New Framework for International
Arbitration in Bangladesh"

In this research study promotion of international relationship with Bangladesh through

commercial Arbitration Law.

Dr. A. F. M. Maniruzzaman Professor of International and Business Law (elect),

University of Portsmouth, U.K participated in the thesis work in the field titled "The
New Law of International Commercial Arbitration in Bangladesh: A Comparative
Perspective"

In this study he briefly discussed about the Laws relating to International Commercial
Arbitration implemented and enacted in Bangladesh.

Nour Mohammad BGC Trust University Bangladesh Chittagong, Chittagong,

Bangladesh, and Rakiba Nabi Faculty of Law, University of Chittagong, Chittagong,
Bangladesh wrote a journal titled "Enforcement of foreign arbitral awards concerning
commercial disputes in Bangladesh A brief overview"

In this journal the author discussed about implementation and enforcement of

international Arbitral awards relating to commercial disputes in Bangladesh.
Chapter 2

[Alternative Dispute Resolution in Bangladesh

tahmidurrahman.com/alternative-dispute-resolution-in-bangladesh/
Best lawyers in Bangladesh barrister tahmidur rahman Remura Wahid TRW , January
4, 2023]

Introduction

The term “alternative dispute resolution” or “ADR” is frequently used to refer to a

wide range of dispute resolution mechanisms that are abridged versions of or
substitutes for full-scale court processes or judicial process. In other words,
alternative dispute resolution refers to the practice of resolving disputes between
parties through means other than formal litigation. ADR is a process that can be
independent (non-judicial) or court-annexed (judicial), binding or non-binding, formal
or informal, obligatory or voluntary. It should be emphasized that the term “ADR” is
misleading in the sense that it is not always an alternative to formal litigation and is
frequently a part of formal litigation, particularly for court-connected ADR processes.
These Alternative Dispute Resolution (ADR) modalities are considered as less likely
to fuel the parental conflicts, more likely to induce the parties to resolve their conflicts
in an amicable manner preserving the future relationship between the parties and
reducing cost, delay and loss of energy to a significant extent. Following the
considerable advantages of ADR almost every county of the world has introduced
ADR system in its justice delivery system which has paved the way to the promotion
of access to justice indiscriminately for all.

Meaning of ADR
The term "alternative dispute resolution" or "ADR" is often used to describe a wide
variety of dispute resolution mechanisms that are short of, or alternative to, full-scale
court processes. The term can refer to everything from facilitated settlement
negotiations in which disputants are encouraged to negotiate directly with each other
prior to some other legal process, to arbitration systems or minitrials that look and feel
very much like a courtroom process. Processes designed to manage community
tension or facilitate community development issues can also be included within the
rubric of ADR. ADR systems may be generally categorized as negotiation,
conciliation, mediation, or arbitration systems.

Brief History of ADR 2

Dispute resolution outside of courts is not new; societies world-over have long used
non-judicial, indigenous methods to resolve conflicts. What is new is the extensive
promotion and proliferation of ADR models, wider use of court-connected ADR, and
the increasing use of ADR as a tool to realize goals broader than the settlement of
specific disputes. The ADR movement in the United States was launched in the
1970s, beginning as a social movement to resolve community-wide civil rights
disputes through mediation, and as a legal movement to address increased delay and
expense in litigation arising from an overcrowded court system. Ever since, the legal
ADR movement in the United States has grown rapidly, and has evolved from
experimentation to institutionalization with the support of the American Bar
Association, academics, courts, the U.S. Congress and state governments. For
example, in response to the 1990 Civil Justice Reform Act requiring all U.S. federal
district courts to develop a plan to reduce cost and delay in civil litigation, most
district courts have authorized or established some form of ADR. Innovations in ADR
models, expansion of government-mandated, court-based ADR in state and federal
systems, and increased interest in ADR by disputants has made the United States the
richest source of experience in courtconnected ADR.
In the 1980s, demand for ADR in the commercial sector began to grow as part of an
effort to find more efficient and effective alternatives to litigation. Since this time, the
use of private arbitration, mediation and other forms of ADR in the business setting
has risen dramatically, accompanied by an explosion in the number of private firms
offering ADR services.
The move from experimentation to institutionalization in the ADR field has also
affected U.S. administrative rule-making and federal litigation practice. Laws now in
place authorize and encourage agencies to use negotiation and other forms of ADR in
rulemaking, public consultation, and administrative dispute resolution.
Internationally, the ADR movement has also taken off in both developed and
developing countries. ADR models may be straight-forward imports of processes
found in the United States or hybrid experiments mixing ADR models with elements
of traditional dispute resolution. ADR processes are being implemented to meet a
wide range of social, legal, commercial, and political goals. In the developing world, a
number of countries are engaging in the ADR experiment, including Argentina,
Bangladesh, Bolivia, Colombia, Ecuador, the Philippines, South Africa, Sri Lanka,
Ukraine, and Uruguay. The experience of many of these countries provides important
lessons drawn upon in this Guide.

Benifits of ADR

There are some potential benefits to using ADR such as:

Save Time:
ADR can often settle or decide a dispute much faster; often in a matter of months,
even weeks, whereas bringing a lawsuit to trial can take a year or more.

Save Money:
When cases are resolved earlier through ADR, the parties may be able to save money
on attorney fees, court costs, and expert fees.’

Increase Control Over the Process and the Outcome:

In ADR, parties typically have more influence over both the process and the outcome.
Parties have more opportunities to tell their side of the story in most ADR processes
than they do at trial. Some ADR processes, such as mediation, allow the parties to
devise novel solutions that would not be possible in court. Other forms of ADR, such
as arbitration, allow the parties to select an expert in a specific field to resolve the
dispute.

Maintain Relationships:

Alternative Dispute Resolution (ADR) can be a less adversarial and hostile way to
resolve a dispute. An experienced mediator, for example, can assist the parties in
effectively communicating their needs and points of view to the other side. This can
be a significant advantage when the parties’ relationship is at stake.
Increase Satisfaction:
In most trials, there is a winner and a loser. The loser is unlikely to be pleased, and
even the winner may be dissatisfied with the outcome. ADR can assist parties in
finding winwin solutions and achieving their true objectives. This, along with the
other potential benefits of ADR, may increase the parties’ overall satisfaction with
both the dispute resolution process and the outcome.

Types of ADR and their Characteristics

ADR typically includes the following mechanisms:

negotiation;
conciliation;
mediation; and
arbitration.

However, the variety of ADR models found in various nations can be described as
follows:
Court-annexed or independent ADR
Binding or Non-binding ADR
Formal and Informal Alternative Dispute Resolution
Basic and Hybrid ADR

Different types of ADR in Bangladesh:

Sumaiya Khair suggests that there are three streams of ADR in Bangladesh:

Informal (extra- judicial or community based) ADR;

ADR in Quasi-formal systems; and
ADR in formal legal system.

Formal ADR in different laws of Bangladesh are:

Code of Civil Procedure (sec. 89A, 89B, 89C)
Family courts Ordinance, 1985 (sec. 10)
Muslim Family Laws Ordinance 1961 (sec. 7, 8)
ArtharinAdalat Ain, 2003 (sec. 21, 22)
Negotiation,Conciliation, Arbitration (sec. 210 of the Labour Code, 2006)

Informal ADR in Bangladesh

Informal ADR in Bangladesh includes traditional shalish and NGO modified Shalish.
Quasi-formal ADR includes village court and Board of Conciliation have originated
from the informal shalish system and this is why they all have been shown in the
following single diagram.

The Code of civil procedure, 1908.

The Code of Criminal procedure, 1898.
The Artha Rin Adalat Ain, 2003.
The arbitration Act, 2001.
The Bankruptcy Act, 1997.
The Muslim Family Court Ordinance, 1985.
The Muslim Family Law Ordinance, 1961.
The Gram Adalat Ain, 2006.
The Settlement of Disputes (Paura Area) Board Act, 2004.

CHAPTER 3

ADR in Commercial Dispute

Commercial dispute settlement has a tradition of many centuries, both at the domestic
and international level. However, it started to be used widely when the first bilateral
investment treaties (BITs) were concluded in 1959 and thereafter, when the World
Bank initiated the ICID-Convention in 1965. Even though, at the beginning there
were only about one case per year but in later years, dispute settlement mechanism
has been chosen or used in thousands of cases such as treaties, investment contracts to
provide a peaceful solution to solve the commercial dispute between parties.
Therefore, the popularity of commercial dispute settlement mechanism has leaded the
parties to include it while concluding an agreement, which will contain a ‘normal’
dispute settlement clause referring to an institution of commercial dispute settlement
mechanisms.
The commercial dispute settlement mechanism established to handle commercial
disputes between two enterprises but due to local governmental administration, it was
in fact usually a form of administrative adjudication with a high level of political and
administrative control over the entities created to settle those commercial disputes. In
such a case, international standard was not maintained properly, even when a
commercial dispute happened to include a foreigner as one of the parties; domestic
law was applied, both as to the procedure and, more importantly to the substance of
the dispute as well.4

Commercial Dispute Settlement

Commercial dispute settlement is the process of resolving commercial disputes
between parties. A commercial dispute arises when one party adopts a trade policy
measure or takes some action that other party considers to a breach of the agreements
or to be a failure to live up to obligations. By signing or concluding an agreement,
both parties can agreed that if one believe the other party is in violation of trade rules,
they will settle their commercial disputes by using the multilateral system of settling
disputes instead of taking action unilaterally. Therefore, a commercial dispute
settlement system is considered or seen as the most active adjudicative mechanism in
the world today.

Types of Commercial Dispute Settlement Mechanism

Commercial Dispute Settlement mechanism is an important requirement in
commercial trade nowadays and it falls into major categories as below :5

Adjudicative processes:
A judge, jury or arbitrator determines the outcome of the commercial dispute between
parties, such as lawsuits (litigation) or arbitration.

4
Case concerning Elettronica Sicula S.p.A. (ELSI) (United states v Italy), ICJ Reports, 1989, p.15,
para.119.
5
Gary Born, International Commercial Arbitration Commentary and Materials (2d ed. Transnational
Publishers/Kluwer Law International 2001).
Lawsuits (litigation):

A lawsuit or suit in law is a claim or dispute brought to a court of law for adjudication
and it may involve commercial dispute resolution of private law issues between
individuals, business entities or non-profit organizations. A lawsuit may also enable
the State to be treated as if it were a private party in a civil case, as plaintiff, or
defendant regarding an injury, or may provide the State with a civil cause of action to
enforce certain laws.
When one party files suit against another, outcomes are decided by an impartial judge
and/or jury, based on the factual questions of the case and the application law. The
verdict of the court is binding upon them but both parties have the right to appeal
regarding the judgment to a higher court.

Arbitration:

Commercial arbitration is a common form of independent alternative dispute

resolution. The disputants agree on a neutral third party or a process for naming the
neutral third party to resolve the dispute. In addition, they agree on the rules the
arbitrator will use to decide the case and whether or not the decision will be binding
or merely advisory. Complex contracts, such as those for the construction of a power
plant, typically contain arbitration clauses outlining how disputes will be resolved in
advance.

Consensual processes:
The parties attempt to reach agreement, such as collaborative law, mediation,
conciliation, facilitation or negotiation.

Collaborative law:

Collaborative law is a legal process enabling parties who have decided to resolve their
commercial dispute to work with their lawyers in order to avoid the uncertain
outcome of court and to achieve a settlement peacefully that best meets the specific
needs of both parties.

Mediation

In a commercial dispute, the contracting parties use mediation, which is a form of

alternative dispute resolution (ADR) method where a neutral and impartial third party,
the mediator, facilitates dialogue in a structured multi-stage process to help parties
reach a conclusive and mutually satisfactory agreement. Mediation has a structure,
timetable and dynamics that "ordinary" negotiation lacks and mediators use various
techniques to open, or improve, dialogue between disputants, aiming to solve their
commercial dispute peacefully.

Conciliation
Conciliation is another dispute resolution process that involves building a positive
relationship between the parties of commercial dispute. A conciliator meets with the
parties separately in an attempt to resolve their dispute and do this by lowering
tensions, improving communications, interpreting issues, providing technical
assistance, exploring potential solutions and bringing about a negotiated settlement.
However, it is fundamentally different from mediation and arbitration in several
respects. Conciliation is a method employed in civil law countries like Italy and is a
more common concept than mediation. It is unlike arbitration, in that conciliation is a
much less adversarial proceeding.

Negotiation:
Negotiation is another form of alternative dispute resolution (ADR) method where
each party involved in negotiating tries to gain an advantage for themselves by the
end of the process. While negotiating to resolve point of commercial disputes, both
parties must have intention to compromise to reach an understanding or gain
advantage in outcome of dialogue.

Facilitation:
Facilitation is another commercial dispute resolution process that involves parties
with a common purpose to solve their dispute.

Importance of implementing ADR in Commercial Dispute:

Different commercial dispute mechanisms are a part of the business nowadays and
has positive effects in the economy.6 A commercial dispute can be settled much
sooner between the parties with ADR; often in a matter of months, even weeks, while
bringing a lawsuit to trial can take a year or more. As it takes much less time to
resolve the dispute through ADR, the parties are able to save money, which they
would have spent on attorney fees, court costs, and experts’ fees etc. In most of the
commercial dispute settlement mechanisms, both parties have more opportunity to
express their demand or side of the story than they do at trial. In mediation, parties are
allowed to fashion creative resolutions that are not available in a trial; therefore, they
can typically play a greater role in shaping both the process and its outcome. Other
commercial dispute settlement processes, such as arbitration, allow the parties to
choose an expert in a particular field to decide the commercial dispute.

Thus, along with all of ADR’s other potential advantages, may increase the parties’
overall satisfaction with both the dispute resolution process and the outcome. Quick,
cost-effective and satisfying resolutions are likely to produce happier clients and thus
generate continuing business with the parties. Due to the above potential advantages,
the entrepreneurs’ consider different commercial settlement mechanisms to resolve
their disputes.

Chapter4
Commercial dispute settlement in Bangladesh

Our commercial dispute resolution is complex which has a detrimental effect on our
standing as an investor-friendly state and causes foreign investors to lose confidence
6
Julian D M Lew, Mistelis, Stefan, ‘Comparative International Commercial Arbitration’ [2003] KLI.
in Bangladesh. Not only that it discourage internal or existing investors from
investing further but also generate bad publicity amongst prospective investors and
deter future foreign investments to Bangladesh.

Entrepreneurs’ require a very simple, quick, efficient and straightforward approach to

resolve commercial dispute, so an investment culture that allows for effective
commercial dispute resolution system would clearly benefit Bangladesh, which will
promote local or foreign investment and thereby increase the economic growth for
Bangladesh.

Position of Bangladesh in commercial dispute

Bangladesh’s new legislative step in the field of international commercial arbitration

is very timely. Bangladesh’s timely approach regarding the international arbitration
legislation for attracting foreign investment, international business operations,
sustainable economic growth and development; triggered by economic globalization
and liberalization of the justice system. The Arbitration Act basically contains
provisions identical to those of the Model Law and to some extent it outsmarts the
Model Law. But there are still some irregularities in the Act which need to be
reformed. The attitude of the judiciary of Bangladesh towards international
commercial arbitration must be changed as judiciary has some control over the
arbitration proceedings under the Act. The Government of Bangladesh and related
professional organizations must also play their respective roles in contributing to the
vibrant and congenial atmosphere required for international commercial arbitration.
We hope that the new era of commercial arbitration in Bangladesh will grow up in the
light of real life experience to benefit the international trade of the country. It is
obvious that the advancement of international commercial arbitration in Bangladesh
will not only boost up international investments but also will definitely strengthen our
country’s economic growth as a whole.7

Institutional and legal Dispute resolution

Institutional ADR in Bangladesh
Bangladesh International Arbitration Center (BIAC)

The first-ever alternative dispute resolution centre, Bangladesh International

Arbitration Centre (BIAC)8 is a not-for-profit organization, is the first international
arbitration institution of the country. It was established in April 2011 and began its
journey with a promise to help settle commercial disputes in a quick, transparent and
cost-effective manner.

The BIAC provides a neutral, efficient environment where clients can meet their
arbitration needs and also has reliable commercial dispute resolution service;
therefore, its work revolves around the best ways to adapt arbitration to the
fundamental changes in the economy. Since establishment, BIAC is already renowned

7
Islam MJ., and Haque MR. (2022). Position of Bangladesh in international commercial arbitration: an
analysis, Br. J. Arts Humanity., 4(4), 107-115. https://doi.org/10.34104/bjah.02201070115
8
www.biac.org.bd
for its first-rate, state-of-the-art arbitration facilities, experienced panel of independent
arbitrators.

The BIAC is assisting by—

preventing the accumulation of further backlogs

reducing the huge backlog of commercial cases.
minimizing the delays of the formal justice system.
reducing the cost of doing business and legal uncertainties.

BIAC introduced its Arbitration Rules in April 2012. 9 These Rules incorporate some
of the leading developments in domestic and international arbitration, while
conforming to the Bangladesh Arbitration Act 2001.

ADR in the Income Tax Department of Bangladesh

In line with the successful introduction of ADR system in the formal legal system of
Bangladesh, the National Board of Revenue (NBR) introduced ADR system in the
income tax department through Finance Act 2011 to settle income tax disputes. New
chapter XVIIIB that contains sections 52F to 52S and the newly added sections deal
with the detailed provisions of dispute settlement through ADR.10

ADR was introduced for resolving disputes involving both direct and indirect taxes in
Bangladesh. According to section 152F any dispute of an assessee lying with any
income tax authority, Taxes Appellate Tribunal or Court may be resolved through
ADR. It means that cases pending at the High Court Division or Appellate Division of
Supreme Court are also qualified to apply at ADR. The aggrieved assessee may apply
at ADR obtaining permission from the concerned Court. The proceeding of such
appeal or reference shall remain stayed till the disposal of the application for ADR. 11

According to section 152II where an assessee has filed an application for ADR for
any income year and for the same income year, the Deputy Commissioner of Taxes
has filed an appeal before the Appellate Tribunal or the Commissioner has made a
reference before the High Court Division and no decision has been made in that
respect by the Appellate Tribunal or High Court Division as the case may be, the
proceeding of such appeal or reference shall remain stayed till disposal of the
application for ADR. It follows that the assesse has been given a wide range of
privilege in resorting to ADR before the same is resolved by the traditional dispute
resolution forums. Before filing ADR application the assessee must pay the tax as per
the income tax return under the provision of section 74 of the Income Tax Ordinance
1984. In the ADR system a facilitator is nominated by the NBR who sits with the
taxpayer and the representative of the income tax commissioner to settle the agitated
issues. If agreement is reached the facilitator passes an order and the order is binding

9
http://biac.org.bd
10
Income Tax Disputes Resolution through ADR: Bangladesh Perspective, Dr. Sams Uddin
Ahmed ,Commissioner of Taxes ahmedsamsuddin593@gmail.com THE COST AND
MANAGEMENT ISSN 1817-5090, VOLUME-48, NUMBER-02, MARCH-APRIL 2020
11
ibid
on the parties. The taxpayer has to pay the tax within the stipulated time failing which
the order stands null and void.12

Dispute resolution under existing laws

Bangladesh Government has promulgated the following acts for the effective
application of ADR procedure for dispensing the commercial dispute outside the
court:

(a) Insertion of sections 89A, 89B and 89C in the Code of Civil Procedure
190813
(b) The Bankruptcy Act 199714
(c) The Arbitration Act 200115
(d) Arthorin Adalat Ain 200316

The Code of Civil Procedure 1908

The Code of Civil Procedure 1908 provides for the provisions of ADR through
section 89A, 89B and 89C. In 2003 through 3 rd Amendment of the CPC these
provisions have been inserted. Here it is said that if all the contesting parties are in
attendance in the Court in person or by their respective pleaders, the Court may, by
adjourning the hearing, mediate in order to settle the dispute or disputes in the suit, or
refer the dispute or disputes in the suit to the engaged pleaders of the parties, or to the
party or parties, where no pleader or pleaders have been engaged, or to a mediator
from the panel as may be prepared by the District Judge under sub-section (10), for
undertaking efforts for settlement through mediation. Moreover section 89A of the
CPC says about different procedures for mediation where section 89B and 89C says
about the arbitration and mediation in Appeal. As the basic process of ADR is
negotiation, mediation and arbitration, the Code of Civil Procedure has rightly
discussed the basic ADR process.

The Bankruptcy Act, 1997

In Bangladesh there were two laws – The Insolvency (Dacca) Act, 1909 and the
Insolvency Act, 1920. The Bankruptcy Act, 1997 has repealed both the Acts and re-
enacted the law on insolvency using the expression “bankruptcy” in place of
“insolvency”. The Bankruptcy Act, 1997 is designed to handle problems relating to
financial matters in a more effective and extensive manner, where company,
association, partnership firm and their directors and owners are brought within the
fold of the new law. Bangladesh is thus on its way in its strides to achieve the goal of
developing the areas of insolvency and creditor rights systems, marching ahead hand
in hand with other members of the community of nations and this system of
Bankruptcy inserts a new system of ADR in Bangladesh.

The Arbitration Act, 2001

12
ibid
13
http://lawcommissionofindia.nic.in/reports/report238.pdf
14
www.comlaw.gov.au/Details/C2004A05112
15
www.biac.org.bd/bangladesh-arbitration-act-2001
16
http://www.boi.gov.bd/index.php/component/businesslaws
The Arbitration Act, 2001 is enacted by the government which came into force on 10
April 2001, repealing the Arbitration (Protocol and Convention) Act 1937 and the
Arbitration Act 1940. The new Act was again amended in 2004 in certain respects.
Such legislative steps were urgent in the face of increasing foreign investment in
Bangladesh in various sectors; especially in natural gas and power, and the ever-
growing export trade with the rest of the world. The Act consolidates the law relating
to both domestic and international commercial dispute settlement. It thus creates a
single and unified legal regime for commercial dispute settlement and gives
Bangladesh a face lift as an attractive place for commercial dispute resolution in the
field of international trade, commerce and investment. Although the new Act is
principally based on the UNCITRAL Model Law, it is a patchwork quilt as some
unique provisions are derived from the Indian Arbitration and Conciliation Act1996
and some from the English Arbitration Act 1996.

Arthorin Adalat Ain, 2003

Artha Rin Adalat or Money Loan Court was established under a law in 1990 to
adjudicate the cases relating to the recovery of loans of financial institutions. Earlier,
the cases for loan recovery were the jurisdiction of the general civil courts. To
strengthen the Artha Rin Adalat (Money Loan Court), a new Artha Rin Adalat Ain
was enacted in 2003. Under the law specialized courts for the settlement of disputes
between the borrowers and the lenders were established in the premises of the District
Judge's Court. The Courts of Joint District Judge established under the new law have
overriding powers on other laws of the land. This means, in case of conflict with any
other law in force, the provisions of the new law relating to money loan shall prevail.

Chapter
Data analysis and Findings

Need of Virtual court

Saqeb Mahbub, Partner at Mahbub & Company stated that Bangladesh was able to
effect drastic transition and expressed his optimism for further growth in this regard.
He identified that while it has been a great leap forward that the virtual courts in the
Supreme Court Appellate Division have been functioning in full swing, the courts are
still operating on a very limited basis. He further pointed out that arbitration is failing
to develop in the same manner.17

Mustafizur Rahman Khan, Barrister-at-Law, Advocate, Supreme Court of Bangladesh

pointed out that a longstanding problem in the process of commercial litigation at the
national level was inefficiency. The outbreak of Covid-19 and the consequent and
sudden introduction of indefinite lockdowns have simply compounded the problem.
He opined that the new virtual court system reclaimed the legal system of the
Bangladeshi courts from the pandemic-induced standstill as a stopgap, albeit for
limited purposes. He identified the hurdles posed by the “new normal” in terms of
mass digital exclusion but went on to identify how it can be a blessing in disguise for
the development of our justice system as a whole. He stated that the advancement of
17
Mahbub & Company, ‘The Future Of Commercial Dispute Resolution’ M&C Webinar Report,
(11 Jan 2022) <mahbub-law.com/the-future-of-commercial-dispute-resolution-mc-webinar-report/>
accessed 3 August, 2023
the Bangladeshi legal system had lain dormant for over a century until it was forced in
a position where it has had to incorporate modern technology in order to function.18

Mr. Shyam Divan, Senior Advocate, Supreme Court of India said that modern
technology had been integrated in the Indian court system on a limited scale even
before the compelling situation created by the pandemic. He stated that, similar to
Bangladesh, the impact of the sudden and significant shift to virtual means of dispute
resolution in India has been that there is a limited scale of operation. He identified the
sources of the problem as wide-scale inaccessibility to the internet by legal personnel
and clients and poor internet connectivity. However, he opined that arbitration as a
means of dispute resolution has been thriving in the same circumstances since it is
relatively less formal and more flexible a process. He foresees that the domain of
commercial dispute resolution would require drastic improvements in technological
support in order to become functional in the virtual domain which, to him, appears
unlikely.19

Muhammad A. Rumee Ali, Chief Executive of Bangladesh International Arbitration

Center (BIAC) stated that Bangladesh should not try to replicate the physical court
but should try to focus on creating an improved and innovative model which is the
virtual court. He strongly believes that the Bangladeshi legal system cannot be
resistant to innovation, clarifying that Bangladesh cannot and should not wait for
certain technological barriers to be overcome in order to start using virtual courts. He
believes that even if it is difficult, Bangladeshi legal system has to demonstrate itself
as credible in order to become credible. He stated that the arena of commercial
dispute resolution has to adopt technology not to survive the pandemic but assuming
that this is the future.20

ADR in real estate disputes:

BIAC CEO Muhammad A Rumee Ali stressed on the need for facilitating a neutral
process of dispute resolution and opined that Covid-19 has pointed out the
significance of availing institutional ADR. He said that owing to the absence of any
dispute resolution clause in real estate and construction contracts, parties cannot reach
a settlement unless all stakeholders cooperate with one another, thereby multiplying
costs as disputes cannot be resolved early. Anis A Khan, vice president of the
Metropolitan Chamber of Commerce and Industry, said that unregistered tripartite
agreement leads to disputes, adding that mediation and arbitration are the most
effective means of resolving such disputes for which specialised setup as established
by BIAC is highly commendable. Mahbuba Rahman, general Manager of BIAC, said
that provision of pre-trial mediation between the parties by the Real Estate and
Housing Association of Bangladesh (REHAB) is not pragmatic and she insisted on
institutional ADR.21
18
ibid
19
ibid
20
ibid
21
BusinessInsider, ‘ADR can help resolve real estate disputes: Experts’ BI Reports(22 October, 2020)
< businessinsiderbd.com/economy/news/77/adr-can-help-resolve-real-estate-disputes-experts>
accessed 4 August, 2023
Compromising by the parties

Different commercial dispute settlement mechanism encourages compromise, which

can be good way to settle commercial dispute but it is not appropriate for others. In
serious justice conflicts and cases of intolerable moral difference, compromise is
simply not an option because the issues mean too much to the disputes.

Lack of consent of the parties

According to the Arbitration Act 2001, if a party send notice to the other party
requesting arbitration to solve a particular commercial dispute but other party does not
respond to the notice, the court on behalf of the non-responding party will appoint an
arbitrator, as a result, it takes years together to even get the arbitration tribunal
constituted and the hearing started. Should the parties fail to agree to settle their
commercial dispute through arbitration or mediation, the expectation of the
entrepreneurs’ to have a simple, quick, efficient and straightforward approach to
resolve commercial dispute through ADR is not fulfilled.

Lack of scrutiny

All ADR settlements are private and are not in the public record, therefore, are not
open for public scrutiny.

Lack of specific Rules

According to the article 23 of the BIAC Arbitration Rules 2011, the Arbitration
Tribunal shall apply the rules of law designated by the parties as applicable to the
substance of the dispute, failing which, the Arbitration Tribunal shall apply the law
which it determines to be appropriate. So, as it appears that there are no specific Rules
of Procedure for arbitration, the parties need to depend on the rules of arbitration
determined by the tribunal, therefore, an uncertainty exists of the outcome of the
ADR.

Barrier of local law development

As commercial dispute resolution is moved from the local court system to the private
sphere, it will prevent the local law from developing to meet changing circumstances.

Lack of appeal on merit

There is no room for filing an appeal on merit if any party is not satisfied with the
outcome of a resolution of the commercial dispute through arbitration. If it appears
that the commercial dispute settlement tribunal was biased, only then an award can be
set aside, which discourages the entrepreneurs’ to choose arbitration over lawsuits.
Increase number of dispute claims

It is possible that keeping information about the details of commercial dispute

settlements out of the public domain will prevent its use as a comparator, as a result,
may lead to an increase in the number of dispute claims by the parties.

Not much institutional support

Countries like USA, UK where ADR as a commercial dispute settlement mechanism

is established; a great emphasis is given on institutionalization of the system of ADR.
In those countries, private institution such as – London Court of International
Arbitration (LCIA), which offer institutional support for ADR, have separate rules of
procedure, panel of arbitrators etc., so newly established Bangladesh International
Arbitration Center (BIAC) and other arbitration service provider should receive more
institutional support from the government.

Lack of knowledge management

Even though Bangladesh International Arbitration Center (BIAC) exist now to settle
all kind of commercial disputes but a large number of entrepreneurs’ do not have the
requisite knowledge of the system. Therefore, they will have to be made aware of the
advantages of ADR and disadvantages of court based litigations to make ADR
popular.

chapter
recommendations and measures

Law Minister Anisul Huq has said, “the cases filed over loan defaults should be
settled quickly through Alternative Dispute Resolution (ADR) for timely realisation
of huge money.” “The defaulted loan to the tune of thousands of crores of taka
remains unrealised as cases are pending with courts for long. The financial
organisations have to bear huge cost for contesting the cases. To resolve the problem,
the government introduced ADR by amending Artha Rin Adalat Ain 2003. But, the
ADR provision is not being applied for various reasons,” he said.22

Law, Justice and Parliamentary Affairs Minister Anisul Huq said the government is
putting importance on alternative dispute resolution (ADR) as its importance is rising
all over the world for reducing judicial backlog. Anisul said the government took e-
judiciary project for increasing the use of information technology in judiciary. He said
after assuming power for the first time, Prime Minister Sheikh Hasina's government
formulated Arbitration Act, 2001. Besides, the government added provisions of
alternative dispute resolution to some acts in the last several years, he said. The
minister said the government is thinking of including appropriate provision in all
22
Daily Sun, Staff Correspondent, ‘Law minister stresses ADR for quick disposal of loan default
cases’ 23rd (February, 2022 12:00:00 AM) <daily-sun.com/post/606820/Law-minister-stresses-ADR-
for-quick-disposal-of-loan-default-cases> accessed 5 August, 2023
government agreements for arbitration and mediation for resolving commercial
dispute outside of court. Besides, he said, the government took steps for making
effective both domestic and international arbitration award in Bangladesh and it took
initiative to modernize the evidence act 1872.23

Alternative Dispute Resolution (ADR) surely was a better way of ensuring access to
justice. The backlog of pending cases was not only hampering the activities of the
judicial system but also delaying justice to be served on time. Justice M Imman Ali,
judge of the Appellate Division, Supreme Court of Bangladesh said, "People hardly
choose the method of negotiation as the parties from both sides feel reluctant to come
in negotiation for settling disputes". He further said, “surely ADR mechanism was
saving time and costs of the parties and ultimately helping them to get justice
speedily.”
Justice M Khurshid Alam Sarkar, judge of the High Court Division said, “ADR
mechanism was not just for dealing arbitrations only. It also included mediation,
conciliation, evaluation and negotiation”. He suggested making a uniform ADR law
in the perspective of Bangladesh's legal mechanisms to improve the overall social
justice system. He also focused on how arbitration was helping to resolve domestic
and international commercial trade disputes. Faruque Hasan, president of Bangladesh
Garment Manufacturers and Exporters Association (BGMEA), spoke about ADR
mechanism from the perspective of a client. He talked about how ADR was settling
complaints relating to Readymade Garment Industry (RMG) sector and how much
effective and helpful it was for the owners of the companies and their employees and
workers.24

Rizwan Rahman, president of Dhaka Chamber of Commerce and Industry (DCCI),

mentioned that ADR was beneficial for importers and exporters in terms of cash flow
and cost of settling trade transactions. He further said DCCI had partnered with BIAC
(Bangladesh International Arbitration Center), which added a new dimension for
resolving any disputes in trade, commerce and investment sectors. Md Arfan Ali,
president and managing director of Bank Asia, mentioned that banks as institutional
clients were getting proper justice from the implementation of ADR mechanisms. He
further said ADR was managing the risks of non-performing loans. Such loans were
linked with the liquidity of banks, he continued. So before going to the court, it was
better if such complicacies were resolved through ADR mechanism, he said.25

Barrister Dr Khaled Hamid Chowdhury, head of Laws, LCLS (South), said that
despite the advantages of implementing ADR, he equally emphasised the
shortcomings of ADR. He also made some recommendations in this regard. He
suggested reforms like making a separate Arbitration Council to deal with complaints
relating to neutrality of the arbitrators and setting a time frame for arbitrations that

23
Daily Sun, ‘Govt stresses on ADR to reduce judicial backlog’ (30th October, 2021) <daily-
sun.com/post/585148/Govt-stresses-on-ADR-to-reduce-judicial-backlog:-Anisul> accessed 5 August,
2023
24
The Buisness Standard News ‘Alternative Dispute Resolution is a better way of
ensuring justice’ (May 9, 2021) <tbsnews.net/bangladesh/alternative-dispute-resolution-better-way-
ensuring-justice-speakers-243844> accessed 5 August, 2023
25
ibid
could make them cost-effective and save time. The Founder of The Lawyers and
Jurists Foundation Barrister AM Masum, FCIArb, Advocate at the Appellate
Division, Supreme Court of Bangladesh, stressed the need for regular practices of
ADR in society. He also discussed how it was linked with the country's economy. He
mentioned that both economic growth and legal development developed hand in hand.
Therefore, the economic analysis of ADR is necessary to determine if ADR actually is
an efficient and cost reducing system. He further said that when foreign investors
wanted to invest anywhere, they mainly focused on the host countries' protection
system for securing the investments with the help of investment treaties, where ADR
clauses were included.26

[The Business Standard, ‘Govt committed to make best business friendly rules,
regulations’ (April 2, 2023)
<tbsnews.net/bangladesh/govt-committed-make-best-business-friendly-rules-
regulations-law-minister-609782>]

Law Minister Anisul Huq today said that the government is committed to making
the best possible business-friendly rules and regulations. "Through alternative dispute
resolution mechanisms, we can get faster access to justice. Government is committed
to make best possible business-friendly rules and regulations. Arbitration Act 2001
may be revisited," he said.
Urging the business community to use the ADR, Anisul said that through an effective
ADR mechanism, FDI regime will be improved a lot. He said that the Mediation
convention will be signed. "CPC Act has already been amended... there should be a
fixed time frame for arbitration proceedings," he added.

[Kamal Hossain Meahzi, Advocate, Supreme Court of Bangladesh. ‘The need for
institutional ADR to uplift country’s dispute resolution system’ (The Daily Star-June
10, 2022)
<thedailystar.net/law-our-rights/news/the-need-institutional-adr-uplift-countrys-
dispute-resolution-system-3043851>]

The legal framework for dispute resolution through alternative methods has reached a
level of maturity in Bangladesh. In the last three decades, the government has
introduced many legislative reforms for the progress of Alternative Dispute
Resolution (ADR) system in the country. The enactment of the Arbitration Act, 2001
may be cited as one of the examples. It is a comprehensive legislation in the field,
which recognisesd mediation during arbitration and consolidated the laws to govern
domestic and international commercial arbitration. In addition to the above law, ADR
provisions have also been inserted in two significantpieces of legislation, namely the
Code of Civil Procedure, 1908 (section 89A) and the Money Loan Courts Act, 2003.
26
ibid
Since 2001, Bangladesh has also enacted and/or amended some laws to promote
dispute resolutions through ADR mechanism in the fields of energy, labour, taxation,
insurance, real estate and so on.

However, a mere legal framework is not enough to improve the justice system
through ADR. With the enactment and amendment of laws, Bangladesh needs to
establish accredited ADR centers to progress the ADR regime in the country and
encourage people to adopt the alternative methods for resolution of their disputes. The
main advantages of ADR under an institutional set-up are that it provides for a
framework based on the institutional rules. It has trained staff and a pool of both
arbitrators and mediators ready to offer services using their expertise in the relevant
fields. It ensures transparency and brings predictability to the entire process. The
disputing parties know it with certainty as to how their dispute will be dealt with, how
long it will take to complete the proceedings and how much expenses will be required
for the purpose, etc.

Since the use of ADR under institutional framework is useful, the private institutions
have been established and promoted with government supports in many countries
where ADR is a success story. These institutions offer ADR services and administer
the entire process based on their own rules which provide for faster and more efficient
resolution of disputes.

Similar ADR centers or institutions should have been established in Bangladesh to

promote and encourage ADR practice. It may be mentioned that an ADR institution is
currently providing for ADR services with facilities based in Dhaka. Bangladesh
International Arbitration Center (BIAC), which was launched in Bangladesh on April
9, 2011 as a private institute for ADR. It started functioning with the main objective
of facilitating ADR, more precisely arbitration and mediation, for resolution of
domestic and international commercial disputes. The other objective is to promote
Bangladesh as an attractive venue for both arbitration and mediation. BIAC has its
own institutional mediation and arbitration rules, known as the BIAC Mediation Rules
and BIAC Arbitration Rules. It offers ADR services and functions as an
administrating body under those rules.
BIAC has not received any legal recognition to function as a default appointing
authority to offer ADR services to the users. ADR is a tested mechanism and its role
in building up an efficient dispute resolution system is undisputed. Thus, the presence
of independent ADR centers in Bangladesh with right support and personnel can
guarantee the taking place of a meaningful ADR mandated by different statutes as
well as the Arbitration Act, 2001.

[‘ADR and the perception of lawyers’ (FE Online Desk- Mar 17, 2018 10:33 PM)
<thefinancialexpress.com.bd/views/reviews/adr-and-the-perception-of-lawyers-
1521304405>]

Most observers would possibly agree that despite various efforts by Parliament – as
evident from laws providing for the use of alternative dispute resolution (ADR) -the
rate of the use of ADR in Bangladesh is quite low. In some laws, there is even a
monetary incentive for settling disputes by resorting to ADR than a full-blown legal
battle in the court. For example, if a case for the recovery of a loan owed to a bank or
non-bank financial institution is resolved through ADR, the court fee paid by the
plaintiff is refunded. However, the sweetener does not seem to work as only few
money loan cases are resolved through the ADR mechanism. In Bangladesh, where
the backlog of cases is an issue and more importantly, the time taken in the settlement
of a legal dispute is quite high, this under-use of ADR is a cause of concern. There
have been quite a few hypotheses about the less than potential use of ADR in the
country. One hypothesis is that the lukewarm response of lawyers is
responsible for not using ADR. An example supporting this argument may be the Law
Commission's Report No. 104 submitted on October 5, 2010. This report argues that
the disinclination of the lawyers to resort to ADR mechanism is one of the principal
reasons for the under-utilisation of ADR in this country. Although the report of the
Commission does not specify this, it is not difficult to imagine why some lawyers are
not interested in the settlement of disputes through ADR. The apparent reason for
being cold to using ADR may be the apprehension about the prospective loss of
earning. However, it is argued that such an apprehension may be misplaced or
exaggerated. ADR does not necessarily mean a dispute resolution without the
engagement of lawyers.
Indeed, more often than not, mediators, conciliators and arbitrators would be the
persons skilled in the knowledge of law. Again, a more expeditious settlement of
disputes through ADR may be a win-win situation, not only for the disputing parties,
but also for their lawyers. Thus, it is probable that if ADR is used more extensively,
the society would be one in which people would feel more empowered to seek legal
remedies for vindicating their grievances. This would be particularly true when we
would consider the population figure and high concentration of land-related legal
disputes - both civil and criminal. And the challenge for our legal system is to address
the long delay in settling court cases, not so much in reducing the number of cases.
Another indirect off-shoot which may translate into a gain for lawyers (and also for
the society) is that if the people can have more confidence in the expeditious legal
remedies, there would be a trend of being more conscious about legal rights and
duties, documentation, and legalisation which should mean more work for lawyers.
In countries where ADR is used more extensively, there is no evidence that the
lawyers have gone out of work or their earning has diminished. However, it will be
simplistic to assume that it is only the use of ADR that has created more work or
better earning for lawyers. It may be that people in those countries have already been
litigious and the use of ADR is the outcome of that. Having said this, the relatively
more frequent reliance on ADR does not seem to have played any direct negative
impact on the professional income of lawyers.
Lawyers are among the most significant stakeholders of ADR, and if they do not have
confidence in this mechanism, it is difficult to get the system functioning well. Thus,
if the government wants to promote ADR in the country, they have to engage with
lawyers and have in a meaningful way.

Lawyers are among the most significant stakeholders of ADR, and if they do not have
confidence in this mechanism, it is difficult to get the system to be functioning well.
Thus, if the government wants to promote ADR in this country, they have to engage
with lawyers and have to do a better job in selling ADR to them. Mere altruism may
not be enough to persuade many lawyers about the merits of resorting to ADR.
Recommendations

A state-run parallel authority required

Steps should be taken to establish a commission for commercial dispute settlement

through ADR, which will lay down principles and policies to make ADR available to
all entrepreneurs’. Additionally, a nationwide network needs to be envisaged for
providing solutions through ADR and if necessary, disburse funds and grants to
different ADR authorities for implementing ADR schemes and program successfully.

Establishing legal ADR frameworks

The government should take necessary steps to amend its local law so as to establish a
legal framework for ADR with international standard.

ADR to be made mandatory

The parties can be obligated to insert a clause into the agreement to settle any
commercial dispute, if arises, though ADR or discuss about the possibility of
commencing ADR. Even though, parties retain the right not to choose ADR but
legislature can introduce certain provisions which discourage initiation of litigation in
cases where out of court settlements can easily be worked out.

Maintaining international standard

BIAC is committed to maintain high standard while settling a commercial dispute but
it should ensure that the tribunal maintains international standard, failing to do so, will
discourage entrepreneurs’ from using it.

Training arbitrators

Training facilities should be increased to train local mediators/arbitrators, judges,

legal community to be capable of settling commercial disputes.

Increase awareness

Since the establishment of BIAC, the local people still not aware of it. ADR is a fairly
new concept to many and concepts like these not only take time in percolating to the
grass root levels, acceptance of such a concept is also a big problem. So, to make the
ADR successful, a robust program such as communications campaigns, conferences,
workshops, publications etc. imparting legal literacy becomes a necessity.
Cooperation and commitment from the entrepreneurs, are a must for making timely
commercial dispute settlement successful.
Enhancing BIAC’s capacity

The capacity of BIAC should be increased to be able to provide credible commercial

dispute resolution or ADR services.

ADR need to be taught in law institutions

Commercial dispute settlement mechanisms can be taught as an essential course in the

university or law institutions, so that law graduates learn the necessity of using it by
the parties.

Assurance to be given to clients

The perceptions of the Bangladeshi legal system would also have to be addressed so
as to reassure clients or parties that they would not become sucked into the courts
following any award in their favor, especially those who will use arbitration and/or
mediation.

Revisiting Arbitration Law

[Daily Sun, ‘Govt may revisit Arbitration Act’ (30 July, 2023)
<daily-sun.com/printversion/details/682510/Govt-may-revisit-Arbitration-Act>]

Anisul Huq, law minister that the government is likely to revisit Arbitration Act 2001
for attracting more foreign direct investment (FDI) to Bangladesh. The government is
committed to make best possible business friendly rules and regulations. Arbitration
Act 2001 may be revisited.

DCCI President Barrister Md. Sameer Sattar said a stable business environment
featured by an efficient dispute resolution system is one of the prerequisites
for attracting FDI. “In order to further promote the ongoing growth and success of our
business climate; it is essential that we establish a legal framework that enables swift
and efficient contract enforcements, particularly in the context of cross-border
commercial disputes,” he said. “Therefore, it is essential to reform the Arbitration Act
as the first step towards addressing such challenges existing in our legal atmosphere,”
DCCI chief stressed. With a rapid FDI stream in Bangladesh, the number of
commercial disputes has risen significantly over the last few decades. As a result,
arbitration has emerged as the pre-eminent mode of
dispute resolution in recent times. Arbitration is meant to be a fast and cost-effective
way of resolving commercial disputes and traditionally foreign investors have chosen
arbitration over national court litigation when resolving cross-border disputes.

British High Commissioner Robert Chatterton Dickson said Bangladesh made

tremendous progress especially during the last two decades. “Moreover, Bangladesh
will be graduated from the LDC group in the next three years and reforms of the
Arbitration Act will help improve ease of doing business and that will attract FDI
more,” he said. The High Commissioner said, “It is true that foreign investors need
their investment protection and faster litigation process through arbitration and
mediation are very effective.” “It is possible to reform commercial laws and make
improvements. In that case India could be a good example, " he said.

Bangladesh Supreme Court lawyer Barrister Ashraful Hadi recommended that the
arbitral tribunal should have the same power as the court in dealing the issues. He also
said that the definition of “court” under the Arbitration Act 2001 should include the
High Court in respect of international commercial arbitration. “Besides, the payment
method of stamp duty in all aspects should be digitised,” he
added. Barrister Hadi underscored the need for a central database for arbitration
proceedings domestically and internationally. “Bangladesh can become a suitable
venue for arbitration among foreigners or foreign investors,” he mentioned. He urged
the government to formulate an international commercial court, “so that we can
dispose of disputes in an expedited manner.”

CEO of Unilever Bangladesh Ltd Zaved Akhtar emphasised that the arbitration needs
specialised resources and understanding of different aspects as well. He also proposed
a smart arbitration model with a digitised mechanism. “Moreover awareness is very
crucial to make it more familiar among the business community.”

CEO of Grameenphone Ltd Yasir Azman said, “For arbitration predictability,

certainty and protection of investment are important.” “The Arbitration Act 2001 was
a laudable initiative, but now it needs reforms,” he said, emphasising the need for
digitalisation and technology for faster use of the Arbitration Act.

Indian lawyer Promod Nair said that India made amendments in their Arbitration Act
and after that reforms their position in the ease of doing business index has been
improved. He informed that India has separate commercial courts to deal with
business disputes only. “Moreover, the Act has identified specific time limits and fees
for each arbitration proceeding.” He also said that they have an online dispute
resolution mechanism that reduces costs and time as well.

Enforcement of foreign arbitral award

[Humanomics Vol. 24 No. 4, 2008 pp. 274-284
# Emerald Group Publishing Limited
0828 -8666
DOI 10.1108/08288660810917150
Enforcement of foreign arbitral awards concerning commercial disputes in
Bangladesh
A brief overview
Nour Mohammad
BGC Trust University Bangladesh Chittagong, Chittagong, Bangladesh, and
Rakiba Nabi
Faculty of Law, University of Chittagong, Chittagong, Bangladesh]

A state often enters into various types of contractual relations with foreign private
parties such as oil and mineral concessions, joint ventures, production-sharing
contracts, contracts of works, technical assistance contracts, agricultural and
manufacturing concessions, transfer of technology, licensing contracts etc. It is the
usual phenomenon that both the parties will perform their obligations as per the terms
of contract. Again, it is also typical that dispute may arise out of breach of contract.
Parties in that case may agree to refer the dispute to arbitration. The validity of
arbitration proceedings originates from either the contractual agreement covering an
arbitration clause or a separate dispute settlement agreement to that matter. An
arbitration award is a determination on the merits by an arbitration tribunal in an
arbitration proceeding, and is analogous to a judgment in a court of law. Although
arbitration awards are characteristically an award of damages against a party, tribunals
usually have a range of remedies that can form a part of the award. The tribunal may
order the payment of a sum of money (conventional damages), make a declaration,
order injunctive relief, specific performance of a contract, the rectification, setting
aside or cancellation of a deed etc. If it is a foreign arbitral award or where there is
involvement of two states or foreign nationals or companies, the question arises how
it will be enforced? Whether domestic court in this regard is the machinery of
implementation and how enforcement mechanism is governed is the main determining
factor to be considered.

Problems of implementation of foreign arbitral award in Bangladesh

Traditionally, international commercial arbitration, and more specifically for the
purposes of this paper, arbitration in Bangladesh has been beset with many problems.
These relate to institutional, legal infrastructural, mainly cultural and educational
factors. Despite recent positive response to the global movement towards
modernization and internationalization of arbitration in Asia, there still persist many
difficulties in Bangladesh that need to be urgently addressed.

Dispute settlement and enforcement of arbitral award in many Asian countries

including Bangladesh still remain a grave cause of concern for foreign investors. The
reticence in this regard may be attributed to various factors, such as:
tendency of non-cooperation and anti-arbitration bias of local courts;
ineptitude of local courts to appreciate the ethos of international private dispute
settlement;
inefficiency of local courts in handling private dispute settlement matters;
serious lack of understanding of international arbitration rules and conventions
including the New York Convention;
local protectionism; . corruption at various levels; and
manipulation of the system by local disputing parties

Most, if not all of these problems are manifest in Bangladesh. The problem lies also
with legal policy-making. The Arbitration Act 2001 adopted in Bangladesh is a
significant step in the right direction. But some shortcomings of the new Act need to
be addressed. As alluded to before, the Arbitration Act 2001 authorizes the HCD to
set-aside any arbitral award made in an international commercial arbitration held in
Bangladesh. The recognition and enforcement of foreign arbitral awards is however
entrusted to the District Judge’s Court, exercising the jurisdiction within the district of
Dhaka. This latter provision seems to have downplayed the importance of
international arbitration for which so much effort has been given to modernize the
arbitration law in Bangladesh.
It is not enough to enact a piece of legislation on arbitration in terms of modernization
of arbitration law. The government, lawyers and judicial officers must embrace the
culture of arbitration in Bangladesh to address commercial disputes. Judges and
lawyers must be aware of the value of arbitration when the courts are heavily
overburdened with caseloads. They must actively promote arbitration and ADR.
There is a pressing need to create a specialist arbitration bench in the HCD arise for
the purpose of dealing with international arbitration matters more effectively and
professionally. Such a specialist Bench may be constituted by having a roll of lawyers
with appropriate expertise and background in the field of arbitration to appear before
the HCD. This may even mean a relaxing the requisite qualifications and experience
for the appointment of judges in order to attract suitable people for the positions. The
constitution of a specialist bench in HCD would be indicative of the government’s
seriousness in promoting international arbitration. Such an arrangement would
generate confidence in the international business community and instill faith in
prospective parties to settle their dispute in Bangladesh, and to enforce any foreign
arbitral awards there. The government has to consider these matters seriously
economic growth and prosperity of the nation. In conclusion, it must be remembered
that arbitration proceedings have developed to supplement formal adjudication. The
adversarial system inherent in the formal adjudicatory process has failed to keep pace
with the changing demands of the commercial dealings.

Promoting international relations

[promoting International Relations through
Commercial Arbitration Law : the
International Context and the New
Framework for International Arbitration in
Bangladesh
Rakiba Nabi, lecturer, Department of Law, University of Ghittagong,
Bangladesh.]

In an age of increasing trend toward cohesive globalization in all areas of

international interaction, international commercial arbitration can be a field both for
comparative lawyers, and scholars of political science and international relations.

Relations in International Trade and Commerce

The UNCITRAL Model Law attempts to promote harmony and uniformity in
resolving international commercial disputes through an autonomy coupled with
neutrality or impartiality in the arbitral process by the composition of the arbitral
tribunal by competent and impartial members that ensures equality between the
parties and full opportunity to them to present their case. The source of authority of
the international arbitral tribunal is the agreement of the parties and not the mandate
of the state. The choice of the law applicable is also determined by the provision in
the arbitration agreement. With the increased arbitral autonomy the requirement of
reasons for the award is greater. Apart from transparency in the arbitral process, it
also acts as an inherent check on the arbitrators and discloses to the party the basis of
the award and the logical process by which the conclusion was reached by the
arbitrators. The presence of reasons also regulates the scope of judicial supervision.
The Bangladesh experience discussed here shows in a very general form the
advantages of international commercial arbitration In enacting the Arbitration Act
2001 in the light of the UNCITRAL Model Law, the most important advantages for
Bangladesh have been the following:
It contributes to convey an image of reliability to the country within the international
business and judicial community, which carries judicial security for investors and
foreign counterparts.
It fosters foreign investment.
It creates a juridical system for the resolution of international controversies among
private people in the setting of association agreement.
It creates an atmosphere of trust for Bangladesh to become the place for international
commercial arbitration overcoming former deficiencies.

However, there are certain deviations from the UNCITRAL Model Law in the laws of
Bangladesh as well as India. Bangladesh and India recognize that arbitration tribunal
may rule on its own jurisdiction including ruling on any objection with regard-to the
existence or validity of the arbitration agreement. It is also accepted that a plea can be
raised on behalf of the parties and the tribunal will deal with it. The ' arbitral award
does not automatically become enforceable without any order from the court, unlike
the situation in Bangladesh and India. A plea that arbitral tribunal does not have
jurisdiction has to be raised not later than the submission of the statement of defense
and the plea that it is exceeding the scope of its authority has to be raised as soon as
the matter alleged to be beyond the scope of the authority of the.

ODR
[Zhang, Wusheng; Zeleznikow, John; and Vries, Berend, "Online Dispute Resolution:
The Benefits Of Enhancing Alternative Dispute Resolution Through The Use Of
Internet Technology" (2004). ACIS 2004 Proceedings. 79.
http://aisel.aisnet.org/acis2004/79]

Alternative dispute resolution (ADR) has become an established alternative method to

litigation in solving disputes in many western jurisdictions. Online dispute resolution
(ODR), the application of ICT in ADR has become a new and enhanced technique for
dispute resolution. Most current ODR projects have been developed in the area of e-
commerce.

The application of ICT especially the Internet technology in ADR process has created
a new alternative dispute mechanism, which provides fast, efficient and possible
resolving dispute without face-to-face meeting. Currently most of the successful ODR
sites are operating in e-commerce related areas. Negotiation support systems can offer
the users not a solution but an optimal one.

[Md. Nayem Alimul Hyder and Jenath Chowdhury (2018). Scope of Online Dispute
Resolution in Bangladesh. Int. J. Bus. Soc. Sci. Res. 6(4): 103-110. Retrieve from
http://www.ijbssr.com/currentissueview/140132922]
Online Dispute Resolution (ODR) is a method of using technology to facilitate the
resolution of disputes between parties. This involves negotiation, mediation,
arbitration, or a combination of all three. It is often considered an online equivalent of
Alternative Dispute Resolution (ADR). ODR also applies innovative techniques and
online technologies to augment the traditional means of resolving disputes.

Problems
This paper has revealed some challenges towards implementation of ODR in
Bangladesh, such as; lack of legal recognition of ODR in existing laws; inadequate
technological facilities; lack of expert manpower; insufficient knowledge of judges,
lawyers and law officials, UNCITRAL model law is not implementing properly; lack
of interest of the legislative, executive and judicial branches of the govt. to implement
ODR process in Bangladesh etc.

sustainabla development and ADR

[Amadea M. Goresh, Paving the Road to a More Free World: ADR as Sustainable
Development - A Look at Bangladesh , 9 Pepp. Disp. Resol. L.J. Iss. 2 (2009)
Available at: https://digitalcommons.pepperdine.edu/drlj/vol9/iss2/2]

problems
Pervasive human rights abuses and challenges to democracy consistently plague
South Asian countries. Sectarian tensions, home grown and imported terrorist groups,
extremism, pervasive corruption, and ineffective legal systems present major
obstacles to development, peace, and stability in the region. Corruption in South Asia
is notoriously rampant. Corruption in both the governments and judicial systems
perpetuates inefficiency and a lack of justice, often heightening abuse against the
most vulnerable members of society, such as women, minority religious sects, and
ethnic groups. While these problems persist throughout South Asia, Bangladesh, in
particular, has had a traditionally poor track record when it comes to human rights
abuses and institutional corruption. This impoverished nation suffers from a chronic
law and order problem as a result of political violence, overpopulation, gross
economic challenges, and an unworkable legal system. One of the poorest and most
populated countries in the world, Bangladesh was also recently ranked first on
Transparency International's list of the world's most corrupt nations. Like many
developing countries, Bangladesh needs to accelerate economic growth and to
improve its political and judicial systems. Economic growth, however, especially
sustainable growth, does not automatically happen. For Bangladesh to raise itself
above its current state of poverty, it must create a more favorable investment climate.
It must also create an environment where the poor-the majority of its citizens-can
participate in the growth process. Numerous factors affect the potential for enduring
stable growth including: macroeconomic strength, quality of infrastructure, a solid
regulatory framework, an absence of bureaucratic corruption, and, importantly, the
rule of law. Without the critically necessary element of a well-functioning judicial
system, economic growth cannot occur.

Recommendations
"Research suggests that a combination of efforts to raise disadvantaged populations'
knowledge of law and to assist them to act on this knowledge to advance their rights
and interests constitute an effective legal empowerment strategy.",271 Legal
empowerment leads to more rights and less frequent abuses of women, the poor, and
disenfranchised minorities. The government of Bangladesh should continue working
with the various national NGOs to continue improved modifications to the shalish
system. Because ADR is successfully curbing corruption within the courts while also
helping to alleviate backlog from heavy case dockets, it should continually be
integrated into the formal court system. ADR is aiding in the resolution of disputes for
individuals, domestic businesses and foreign corporations; thus, it will continually
plan a dominant role resolving disputes in all levels of society. International
organizations such as The World Bank, the Asian Development Bank, the UN, and
the USAID should continue to monitor the progress Bangladesh is achieving through
implementation of ADR, work towards further strengthening existing programs, and
seek to replicate them in new environments. ADR is a pivotal component of a
successful legal empowerment strategy. Legal empowerment, in turn, is helping pave
the road to a more sustainable future, and consequently, a more free world.

Conclusion

It appears from the above discussion that our commercial arbitration laws still require
more improvement to maintain international standard. However, developing the law is
not enough, institutional rules such as the BIAC Rules 2011 used for commercial
arbitration have, in regular intervals, need to be re-examined and revised in order to
take into account new experiences from their practical implementation. Even though,
it is quite difficult task to make the national court systems fit for dealing with
different commercial mechanisms but the developing process should be continued.
The parties or litigants who have been on the losing side in a number of arbitrations
will see the fault in the system rather than in their own conduct, so to retain public
confidence, modernisation and transparency of arbitration rules and institutions is a
must.

As Bangladesh is a major player in international trade nowadays and require more

foreign investment for its economic growth, the government must provide some legal
security for such investments including the option of settling commercial disputes
through international arbitration standard.