ADR most preferred way to resolve LC-related int'l trade disputes

Experts at a webinar stressed that the Alternative Dispute Resolution (ADR) is the most preferred way to resolve LC-related international trade disputes.

They highlighted the issues and challenges of resolution of international trade disputes arising out of Letters of Credit (LC) through the use of ADR methods in Bangladesh, especially in the wake of the Covid-19 pandemic worldwide, which has created an unprecedented challenge in our economic life, said a statement.

The webinar on 'Settlement of Letters of Credit-Related International Trade Disputes through ADR' was jointly organised by the Bangladesh International Arbitration Centre (BIAC), the first registered Alternative Dispute Resolution (ADR) institution in Bangladesh, and the Dhaka Chamber of Commerce & Industry (DCCI), a partner of BIAC and the largest business chamber in Bangladesh, on Saturday.

The event was aimed at suggesting greater transparency on how the ADR processes, including arbitration and mediation, work and how they can provide relatively inexpensive and quick access to the resolution of disputes arising out of LC, particularly in the developing nations.

Shams Mahmud, DCCI President and Managing Director, Shasha Denim Ltd. & Shasha Garments Ltd., in his welcome address, maintained that to mitigate risk profile of businesses, institutional ADR processes, including arbitration and mediation, can be of immense help, especially in LC-related international trade disputes.

He emphasied the importance of LC in businesses in developing national trade competency.

He lauded the BIAC's role as a trendsetter and pioneer in bringing businesses, banks, ADR facilitators and the government agencies together in order to institutionalise best practices of ADR in Bangladesh.

In his closing address, Chief Executive Officer of BIAC Muhammad A. (Rumee) Ali said that BIAC, as the only licensed ADR centre in Bangladesh, has arbitration, mediation and other methods of ADR in their agenda.

He emphasised further cooperation with DCCI to help resolve commercial disputes in both domestic and international trade.

He called upon business leaders, lawyers, mediators and exponents of ADR to come forward and join the BIAC's efforts in quick and cost-effective dispensation of business disputes for the greater interest of the country.

He also stressed the need for provision of an ADR clause in commercial contracts and synchronising LC with Pro Forma Invoice so that interests of banks and parties are well protected.

An expert panel of speakers comprising eminent business leaders, bankers, lawyers and ADR specialists from home and abroad addressed issues and impacts of the challenges of LC-related international trade disputes and the way forward through the application of ADR mechanism in this regard.

Business leaders, experts from the legal fraternity, corporate houses, academicians, arbitrators, mediators and ADR specialists of high eminence from home and abroad participated in the webinar through Zoom transmission.

The webinar was moderated by Barrister Shafayat Ullah, Head of Group Legal Affairs, Mutual Trust Bank Ltd.

Vincent O'Brien, Director, International Chamber of Commerce-UAE, and Member, Executive Board, ICC Banking Commission, Paris, joined the webinar as a Panellist.

He expressed satisfaction over BIAC's contribution and continuous efforts in facilitating ADR norms.

He said that Bangladesh has the highest level of practicing ICC Rules in settling LC-related international cross-border trade disputes.

He opined that to businesses, 'time is money' and to save both time and money, ADR can be the best practice to resolve such disputes.

Md Ahsan-uz Zaman, Managing Director & CEO, Midland Bank Limited, narrated his experience of a banker and emphasised incorporation of ADR clause in both local and international LC.

He stressed the need to create awareness about ADR and favoured new guidelines for resolution of cross-border trade disputes in order to do away with discrepancies in LC.

Barrister Sameer Sattar, Advocate, Supreme Court of Bangladesh and former director, DCCI, said that Letters of Credit are a strict area of interference and discrepancies in LC can be prevented by appropriate draft, not diluting the same with providing an ADR clause therein which can be part of commercial contracts between the parties.

Khaled Aziz, Managing Director & Chief Operating Officer, Standard Chartered Bank, opined that the BIAC can play an important role through its established rules to help resolve disputes arising out of LC, in addition to the processes followed by various forums in Singapore, Paris and London.

He emphasised the need for provision of rational conditions in the LC.

MS Siddiqui, Convenor, DCCI Special Committee on SDG Affairs-2020, gave an insight into existing discrepancies in LC and insisted that there are issues and departures from conditions of commercial contracts which are not suitable to be resolved by the judicial process at the first instance.

He advised that ADR can be a way forward to resolve such disputes.

Barrister Shahedul Azam, Advocate, Supreme Court of Bangladesh, and Member, DCCI, underscored the need for adequate and proper drafting of an ADR clause in additional contract outside of the LC, which can help prevent trade disputes.

He maintained that arbitration is not the only solution to resolve LC-related disputes.

Rubaiya Ehsan Karishma, Counsel, BIAC, in her deliberations, shared her experiences of handling LC-related disputes from inside the BIAC and said that contracting parties tend to lodge complaints to BIAC citing discrepancies in their documents and seek BIAC's assistance.

She preferred having a smaller platform than the courts to help parties insert ADR clause in their contracts.

MA Akmall Hossain Azad, Director, BIAC, also spoke at the webinar.

The event was live-streamed on BIAC's Facebook page and LinkedIn.