While the above situation explains foreign investors' dilemma, Bangladeshi companies that operate domestically are in a bigger fix since their operations are within the country. Legal disputes may arise for whatever reason and at any time. Unfortunately, even after more than 50 years of independence and an economy that has grown to be around US$100 billion, there are still no dedicated benches in the High Court to deal with corporate matters. Why this has not happened can best be answered by policymakers.
In a country of 0.28 million registered companies and firms, according to the report, the crippling shortage of dedicated courts is responsible for not paying attention to corporate disputes involving annual general meetings, share distributions or minority-shareholder rights. In the absence of dedicated lower courts for corporate feuds, businesses have to lodge cases with the two company benches within the High Court (HC) Division. Anyone can guess how adverse an impact such long delays have on business of each companies looking for a court verdict.
On the one hand, the government is courting FDI far and wide and building up institutions, streamlining the process of getting permits, developing dedicated export processing zones but not strengthening the arbitrary bodies for resolution of disputes. Some suggest that those firms operating under trade licences and partnership deeds should settle their disputes at regular civil courts. A decision to that effect would certainly reduce the backlog to some extent, but ultimately there is no alternative to setting up dedicated courts to handle corporate legal disputes.New benches need to be set up to hear such cases and dedicated courts alone can better address exclusive company disputes. As pointed out by a senior Supreme Court lawyer and Company Act expert "We need more company courts to settle the company matters efficiently. Specialised lawyers and judges with a deep understanding of the Company Act are crucial for establishing new benches."
The existing system that has put the whole burden of this issue on two High Court benches is stretching them to the limit. Not only do they hear corporate cases, but also deal with cases that deal with various Acts including, Succession, Divorce, Admiralty, Trademark, Bank Companies, Arbitration, Insurance and Merchant Shipping Ordinance. It is humanly not possible to settle all these diverse cases falling under so many Acts at two benches only. This explains why corporate and other cases are piling up with the two benches. Were other cases of diverse nature taken into account, the gravity of the situation could better be grasped!
As the economy gears up for more FDI since more and more economic zones are near completion and the country's physical infrastructure improves, it is only natural that there will be more foreign investment and more domestic companies coming up every year. All these companies and firms (both domestic and foreign) will require from time to time, to go to court in an effort to settle legal disputes. There is no telling how many months or years will pass before they get a verdict. This peculiar situation hampers business operations; it tramples shareholders' aspirations and deters fresh investment. Several international reports by bilateral agencies including the World Bank and other such institutions have pointed out that the country will need to invest billions to upgrade its infrastructure to feed a growing economy. Those billions of dollars are not coming in the way it was expected. The legal framework of the country is one of the things prospective foreign companies look at, as part of "ease of doing business". It is time to address the situation if Bangladesh wishes to improve its image as a nation that is open to business. Unfortunately for this country, changes happen only when we hit a serious road block or when there is sufficient external pressure.
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