The third tripartite review meeting of the Committee, on the draft ADR guidelines to resolve commercial disputes including non performing loans was held recently at BIAC office.
Mr. Muhammad A. (Rumee) Ali, CEO of Bangladesh International Arbitration Centre (BIAC), presided over the meeting. The draft ADR guideline, as it stands, after incorporating recommendations made by the committee members were thoroughly discussed.
Representatives of Bangladesh Bank, Association of Bankers, Bangladesh (ABB) and BIAC are the members of the body.
It was agreed in the meeting that incorporating the ADR (Mediation-Arbitration or Med-Arb) clause in all bank contracts will provide banks with a tool to protect themselves from the risk of non-performance of contracts.
The clause will be framed in a manner that will give the banks an additional safeguard against the risk of default in loan contracts. Banks will have the discretion to use the ADR Cause appropriately in risk mitigation.
The committee was of the opinion that mediation can be tried by the parties even if a loan has been rescheduled since it leaves a scope for negotiation and this is likely to strengthen the existing rescheduling circular.
To address the existing overhang of bad debts/default court led arbitration is being considered. The committee deems arbitration as a significant option, particularly in cases where the defaulter has assets abroad, because of the cross-border enforceability of an international arbitral award under the New York Convention.
The draft is being revised and will be submitted to the Bangladesh Bank soon, said a statement.
Participants at this meeting included Mr. AKM Ehsan (Deputy General Manager, BRPD, Bangladesh Bank), Mr. Kaiser A. Chowdhury, Mr. Sohail R.K. Hussain, Mr. Mehmood Husain, Mr. Shafayat Ullah and Ms. Rubaiya Ehsan Karishma.
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