International commercial arbitration in Bangladesh

Arbitration has become a requisite component supporting healthy international trade and commerce. The business community places trust in the arbitral process so that the whole trade system can be expanded in spite of the challenges across the borders. Arbitration is so significant these days that it will become, if it is not already, the pre-eminent mode of dispute resolution in international trade and commerce. Without arbitration, the gaps in the entire process can jeopardise the stability of safe international business and commercial trade structure.
International commercial arbitration constitutes a significant part of arbitrations taking place around the globe. However, such arbitration has faced some barriers. Some of the major challenges being faced are the appointment of arbitrators, defining and enforcing its minimum standard and competence, the issue of costs in arbitration, enforcement of arbitral awards, institutional bias, power of arbitrators, competence of national courts' control and supervision over international commercial arbitration. The issues become more diversified when we consider developing countries as a test case.
Let us shed light on the challenges of international commercial arbitration in Bangladesh. Before highlighting the challenges, let's look into the economic growth of Bangladesh briefly. It is precisely clear that Bangladesh has experienced a fairly strong economic growth during the last decade. Bangladesh achieved 6.7 per cent growth in FY 2010-11 even after the global financial crisis. Bangladesh has registered steady annual GDP growth of 5-7 per cent since 1990. According to the projections set out in the Medium Term Macro-economic Framework (MTMF) the GDP growth is projected to reach 8.3 per cent in FY 2015-16 which has been shown in the 'Bangladesh Economic Review 2012' by the Ministry of Finance.
In recent years, foreign investors have shown increasing interest in many sectors including agriculture, oil, gas, mineral exploration, electrical power systems, computer, software, textile, architectural, construction and engineering services. In 2009-10 (February), there were 89 new foreign and joint venture investment projects worth $590 million registered with the BOI. It is the economic growth of a country that mainly increases the scope of international commercial arbitration. This is because it is a more favourable way to resolve disputes than through courts in Bangladesh owing to the lengthy duration of litigation in civil matters.
There are various challenges that international commercial arbitration faces in Bangladesh. Some of the practitioners and academics have addressed the challenges but the debate is still going on about this regime. The 2001 Act created different provisions for international commercial arbitration in contrast to those of domestic arbitrations and poses some definitional and restrictive challenges. It is also to be noted that for a dispute to come under the ambit of these provisions, it must be considered to be a 'commercial dispute' under the laws of Bangladesh. This seems to be a restrictive approach in comparison to the approach of UNCITRAL Model Law. Section 3 of 2001 Act also expresses a restrictive territorial attitude whereby only arbitration that takes place in Bangladesh falls within the purview of this Act.
This further limits the meaning of international commercial arbitration. There are some conflicting decisions of the High Court division of the Supreme Court of Bangladesh in this regard such as HRC Shipping Ltd v MVX-Press Manaslu and others, 1 LCLR [2012], Vol. 2, pp. 207-22 and also STX Corporation v Meghna Group of Industries Ltd & others, 64 DLR (HCD) 550 where one bench of High Court division took a  liberal view and another adopted a restrictive or literal approach of interpretation. It has rendered the issue unclear about interpretation of the law. Besides the legislative ones, the main challenges that international commercial arbitration has encountered these days in Bangladesh include the issues of costs, duration, appointment of arbitrators, enforcement of arbitral awards and court interventions etc. Specifically, the fees of arbitrators and costs of conducting the process are in fact very high in Bangladesh perspective.
Duration of arbitration is a very important issue as the process is very lengthy in Bangladesh. This actually stands against the principle of arbitration concept. Further, in case of appointment of arbitrators, the parties make application to the court to appoint arbitrators when another party does not cooperate in terms of going to sit for arbitration. These applications take a long time to be disposed of in the local courts. It makes this process slow and frustrates the parties seeking the alternative dispute resolution.
The intervention of courts in arbitration is a very live issue not only in Bangladesh but also in many other jurisdictions which needs to be solved in some manner. Less interruption from courts makes this process more strengthened and effective.
The issue of enforcement of arbitral awards in Bangladesh is a very crucial problem which needs to be addressed and resolved quickly. The enforcement of arbitral awards in Bangladesh is challenging and uncertain. The difficulty is greater when it is an international commercial arbitration and a foreign party is involved. All of these issues need to be resolved to make this process really an effective and strong one.
It is to be mentioned here that it is the responsibility of the whole arbitration community to find the way-outs of  minimising the challenges of international commercial arbitration in Bangladesh. It is very clear that the advancement of international commercial arbitration will not only boost international investments but also will definitely strengthen our country's economic growth as a whole.
The writer is a Barrister-at-Law and is pursuing research on international commercial arbitration at Manchester Metropolitan University, the UK.
ahmed.rajin@lawcornerstone.com