BANGLADESH Law and Practice Contributed by: Sharif Bhuiyan, Dr Kamal Hossain and Associates
3. The Arbitration Agreement 3.1 Enforceability
• In the context of challenge of an arbitrator, the Act deviates from the Model Law in that the Act pro - vides that the concerned arbitral tribunal, in case of such a challenge, has to wait until the challenge is finally disposed of. It is only when a challenge or an appeal against the decision of the arbitral tribunal is unsuccessful, that the arbitral tribunal can continue the arbitral proceedings and make an award. The Model Law allows the concerned arbi - tral tribunal, including the challenged arbitrator, to continue the arbitral proceedings and to make an award despite the fact that a request on challenge may be pending before a court. • Under the Model Law, the grounds for setting aside an arbitral award and the grounds for non-recog - nition of a foreign arbitral award include a ground that the arbitration agreement concerned was not valid under the law to which the parties subjected it. The relevant provisions of the Act on these matters are based on the Model Law (and also the New York Convention). However, in drafting the provisions of the Act, the English language text of the Model Law has been mistranslated into Bangla. As a result, instead of invalidity of the arbitration agreement, invalidity of the governing law of the arbitration agreement (“the law under which the parties entered into arbitration agreement was not a valid law”) has become a ground for setting aside and non-recognition. According to STX Corporation Ltd. v Meghna Group of Industries Ltd. 64 DLR (2012) 550 and 32 BLD (2012) 400, only those provisions of the UNCITRAL Model Law, which have been enacted in the Act, are binding on Bangladesh courts. Where the Act has deviated from the Model Law, the courts are bound to give effect to such deviation. 2.2 Changes to National Law The Act was enacted in 2001 and was amended in 2004 to add Section 7Ka conferring powers on the HCD and the District Court to make interim orders in support of an arbitration. There is no pending legis - lation that may change the arbitration landscape in Bangladesh.
According to Section 2 of the Act, “arbitration agree - ment” means an agreement by the parties to submit all or certain disputes which have arisen or which may arise between them in respect of a defined legal rela - tionship, whether contractual or not, to arbitration. Section 9 (1) of the Act states that an arbitration agree - ment may be in the form of an arbitration clause in a contract or in the form of a separate agreement. Section 9 (2) of the Act sets out the legal requirements of an enforceable arbitration agreement. An arbitration agreement must be in “writing” and is deemed to be in writing if it is: • part of a document signed by the parties; • contained in exchange of letters, telex, telegrams, fax, e-mail or other means of correspondence; or • contained in an exchange of a statement of claim and a defence in which the existence of the agree - ment is alleged by one party and not denied by the other. The reference in a contract to a document containing an arbitration clause constitutes an arbitration agree - ment if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. In K.A. Latif v Olam International Ltd. 13 BLC (2008) (HCD) 457 it was observed that the court has dis - cretion to determine, from the overall circumstances, including documents or evidence, the existence of an arbitration agreement between the parties. Section 89B of the CPC provides that when parties to a lawsuit apply to the court for withdrawal of the lawsuit on the ground that they will refer the dispute to arbitration, the application is deemed to be an arbitra - tion agreement under Section 9 of the Act. 3.2 Arbitrability Section 3 (3) of the Act provides that, for the time being, the Act will not affect any other law in force
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