Foreign direct investment a powerful tool for economic growth

International Chamber of Commerce, Bangladesh (ICCB) President Mahbubur Rahman on Tuesday said easing enforcement of foreign arbitral award is directly linked to investment in the country, which is a powerful tool for economic growth.

"Foreign direct investment (FDI) is a powerful tool for economic growth, especially for a developing country like Bangladesh, and easing enforcement of foreign arbitral award has a direct impact on both foreign and local investments."

The existing legal framework in Bangladesh for enforcement of arbitral award, be it foreign or local, and arbitration in general have significant room for improvement.

He said these while speaking at a webinar - "Challenges and Best International Practices for Enforcement of Foreign Arbitral Award".

The webinar was organised on the occasion of celebrating the ICC Court Centenary 2023.

The ICC Court was established on 19 January 1923 under the leadership of ICC Founding Chairman and French Minister of Commerce Etienne Clementel and ICC founders known as the "Merchants of Peace".

Bangladesh National Committee of the ICC, founded in 1994, is comprised of trade organisations, and national and trans-national corporations. The ICC Bangladesh has been promoting arbitration and ADR from its establishment.

Mr. Rahman further said currently, the ICC International Court of Arbitration is the most preferred arbitral institution in the world.

"The application of a modern, fair and predictable law to the contract is a key component of modern supply chain management, as it allows to manage supply chain more efficiently and to solve any dispute more quickly."

However, the contracting parties in Bangladesh have not yet realised the full potential of ICC Rules of Arbitration and Mediation, he noted.

"The ICC Court of Arbitration and ICC Bangladesh Commission on Arbitration and ADR may take up joint programmes to promote the ICC Rules of Arbitration and Mediation in Bangladesh for the parties to adopt these rules and fully reap the benefits."

The government is planning to attract FDI in different areas, including on-shore and off-shore explorations, and handling a number of mega projects, including the just-completed Padma Bridge, Bangabandhu Karnaphuli Tunnel, Dhaka Metro Rail, elevated expressways, power plants, etc.

The government is implementing these mega projects, which must have arbitration system following the ICC or UNCITRAL or other rules, the ICCB president also said.

"Therefore, it is time to promote the ICC arbitration as well as ensure enforcements of foreign arbitral award to safeguard interest of the country."

The ICC Bangladesh along with legal experts is pursuing legal reforms, which would ensure speedy and effective enforcement of arbitral award in Bangladesh, he added.

Claudia Salomon, President of the ICC International Court of Arbitration, said the ICC has played a seminal role in making arbitration a preferred method for resolving disputes between the parties from different countries.

Ms. Claudia mentioned that scrutiny process is a unique feature of the ICC arbitration, ensuring that the ICC awards are the highest possible standard.

"We are the only arbitral institution that is truly international - not linked to any geography or subject to political winds," she opined.

Presenting the keynote, Alexander Fessas, Secretary General of the ICC International Court of Arbitration and Director of the ICC Dispute Resolution Services, said the ICC dispute resolution court is for providing justice and rule of law.

He said if the people, companies and state manage to get engaged within a defined and predictable international trading that would lead to a flow of funds, it would lead to growth, and growth would lead to prosperity.

Nihad Kabir, Chairman of the ICC Bangladesh Commission on Arbitration and ADR, moderated the panel discussion.

She said they are working with the Ministry of Law for necessary amendments in the arbitration act for enforcement of the foreign and local arbitral awards.

Mir Nasir Hossain, Managing Director of Mir Akhter Hossain Limited and Executive Board Member of the ICC Bangladesh, said limited availability of specialised judges and lawyers with expertise in international arbitration is a challenge for Bangladesh.

"This has led to a shortage of competent professionals, who can handle complexities of enforcing the foreign arbitral awards in Bangladesh."

He emphasised training and upscaling to handle shortage of skilled manpower.

Kutubuddin Ahmed, Chairman of Envoy Group and Executive Board Member of the ICC Bangladesh, said for Bangladesh, the primary challenge in enforcing foreign arbitral awards is lack of a comprehensive legal framework.

"The existing laws on arbitration are outdated and do not provide adequate guidance on recognition and enforcement of the foreign arbitral awards," he added.

Md. Sameer Sattar, President of the Dhaka Chamber of Commerce and Industry (DCCI), said enforcement of arbitration is the key to upholding sanctity of the ICC.

He also said lengthy and delayed process of arbitration - like the country's judiciary - will not bring efficient consequence for arbitration.

Margub Kabir, Advocate, Supreme Court of Bangladesh and Head of Chambers, Margub Kabir and Associates, A B M Sertajur Rahman, Additional Project Director (Superintending Engineer) of SASEC Dhaka-Sylhet Corridor Road Investment Project, and PPP Cell of Roads and Highways Department, Forrukh Rahman, Advocate of Supreme Court of Bangladesh and Head of Chambers, Rahman's Chamber Barristers and Advocates, among others, also spoke at the event.

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