BANGLADESH Law and Practice Contributed by: Sharif Bhuiyan, Dr Kamal Hossain and Associates
5.5 Breach of Arbitration Agreement Courts in Bangladesh stay any proceedings com - menced in breach of an arbitration agreement. Section 7 of the Act provides that where a party to an arbitration agreement files any legal proceedings in a court against the other party in respect of any matter agreed to be submitted to arbitration, the court will not have jurisdiction in respect of such legal proceedings except insofar as provided by the Act. Section 10 of the Act allows a party to an arbitration agreement to make an application to the court at any time before filing a written statement (ie, statement of defence) to stay the court proceedings commenced in breach of an arbitration agreement and to refer the parties to arbitration. Upon receiving an application, the court, if satisfied that an arbitration agreement exists, refers the par - ties to arbitration and stays the proceedings, unless the court finds that the arbitration agreement is void, inoperative or concerns a matter incapable of deter - mination by arbitration (Section 10 (2)). In Maico Jute and Bag Corporation v Bangladesh Jute Mills Corporation 8 MLR (2003) (AD) 4, it was observed that if an arbitration clause is contained in a contract, the court under Section 10 of the Act does nothing wrong if it stays, either on its own motion or on an application by a party, further lawsuit proceedings and refers the matter to the arbitrator for settlement. Sections 7 and 10 of the Act should be read together to construe the duty conferred upon the courts to refer matters to arbitration. According to the Accom Travels case, an application under Section 10 can be made by a party to an arbi - tration clause for arbitration in Bangladesh. In case of foreign arbitration, where a party initiates local court proceedings in Bangladesh, the other party, who can - not file an application under Section 10, may file an application under Section 151 of the CPC seeking a stay of the local court proceedings and a direction for referring the matter to foreign arbitration.
5.6 Jurisdiction Over Third Parties The Act does not contain any provision on circum - stances in which an arbitral tribunal may assume jurisdiction over individuals or entities that are neither party to an arbitration agreement nor signatories to the contract containing the arbitration agreement.
6. Preliminary and Interim Relief 6.1 Types of Relief
Section 21 of the Act empowers an arbitral tribunal to award preliminary or interim relief. Section 21 states that, unless otherwise agreed by the parties, the arbi - tral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbi - tral tribunal may consider necessary in respect of the subject matter of the dispute, and no appeal would lie against such order. An interim order passed by an arbitral tribunal is bind - ing and may be enforced by the court on an applica - tion by the party requesting the taking of such interim measures (Section 21 (4)). An application filed under Section 21 (4) cannot be deemed to be incompat - ible with the arbitration agreement nor a waiver of the agreement (Section 21 (5)). 6.2 Role of Courts Section 7Ka of the Act empowers the court to pass appropriate interim orders before and after arbitra - tion proceedings or until enforcement of the award. Section 7Ka provides that, unless the parties agree otherwise, upon application of a party to an arbitra - tion agreement, before or during the continuance of arbitration proceedings, or until enforcement of an award, the HCD in the case of international commer - cial arbitration and the District Court in case of other arbitrations may pass orders in the following matters: • appointment of guardian for a minor or a person of unsound mind to conduct arbitral proceedings on his/her behalf; • interim custody of or sale of or other protective measures in respect of goods or property included as the subject matter of an arbitration agreement;
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