BANGLADESH Law and Practice Contributed by: Sharif Bhuiyan, Dr Kamal Hossain and Associates
3.4 Validity Section 18 of the Act contains provisions regarding severability of an arbitration agreement. Section 18 states that “An arbitration agreement which forms part of another agreement shall be deemed to constitute a separate agreement when ruling upon the validity of that arbitration agreement for the purpose of deter - mining the jurisdiction of the arbitral tribunal.” The Supreme Court of Pakistan in Manzoor Hussain v Wali Mohamad 17 DLR (SC) (1965), 369 (Bangla - desh was a part of Pakistan in 1965) discussed the enforceability of an arbitration clause contained in a void contract and observed that if the principal con - tract was one which was clearly ab initio void or came within mischief under Section 23 of the Contract Act, then the arbitration clause contained in it would be unenforceable and the award would be invalid (para - graph 25). In Bangladesh Jute Mills Corporation v Maico Jute and Bag Corporation 56 DLR (HCD) (2004) 224, the HCD observed that if the contract itself is void, illegal or fraudulent, then the entire contract along with the arbitration clause would be voidable (paragraph 9). In Ferdous Alam v PVH Far East Limited 74 DLR (2022) 598, the HCD held that although the arbitration clause is a part of the underlying contract, it has, in a series of decisions, been treated as independent of the other clauses, and the invalidation of the underlying agree - ment will not invalidate the arbitration clause (para - graphs 17 and 18).
that bars certain disputes from being submitted to arbitration. Section 43 (1)(b)(i) of the Act provides that an arbi - tral award may be set aside and Section 46 (1)(b)(i) of the Act provides that enforcement of a foreign arbitral award may be refused if the court finds that the sub - ject matter of the arbitration award is not capable of settlement by arbitration under the law of Bangladesh. Accordingly, the concept of arbitrability is recognised in the Act. However, the Act does not set out a list of subject matters that are not capable of settlement by arbitration. Usually, in conformity with the practice in various jurisdictions, matters concerning criminal law, competition law, etc, will be regarded as not capable of settlement by arbitration. Section 40 of the Bangladesh Energy Regulatory Commission Act, 2003 requires any dispute between licensees, or licensees and consumers, to be referred to the Bangladesh Energy Regulatory Commission (BERC), which is a statutory body regulating the energy sector, for settlement under the Bangladesh Energy Regulatory Commission Dispute Settlement Regulations, 2014. 3.3 National Courts’ Approach There is no judicial decision in Bangladesh regard - ing determination of the law governing the arbitration agreement. If the parties choose a governing law of the arbitra - tion agreement, the courts in Bangladesh will give effect to the choice. In the absence of the parties’ choice of governing law, if the contract in which the arbitration agreement is set out contains a governing law clause for the contract, the courts in Bangladesh would accept the governing law of the contract as the governing law of the arbitration agreement. If there is neither a governing law for the contract nor a govern - ing law for the arbitration agreement, it is likely that the law of the seat of the arbitration will be the governing law of the arbitration agreement. Arbitration agreements are usually enforced by courts in Bangladesh.
4. The Arbitral Tribunal 4.1 Limits on Selection
There is no limit on the parties’ autonomy to select arbitrators in Bangladesh. Section 11 of the Act allows parties to determine the number of arbitrators. If the parties fail to determine the number, the default num - ber is three. Unless otherwise agreed by the parties, if parties appoint an even number of arbitrators, the appointed arbitrators are required to appoint an addi - tional arbitrator who acts as a chairman of the tribunal.
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