BANGLADESH Law and Practice Contributed by: Mohammed Forrukh Rahman, Kamrunnaher Shimu and Salauddin Kader, Rahman’s Chambers
SAARC Framework Agreement for Energy Coop- eration).
ity when the agreed mechanism fails, as prescribed under Section 12 of the Arbitration Act 2001. 4.4 Challenge and Removal of Arbitrators The Arbitration Act 2001 governs challenges to the arbitrators. Section 13 outlines the grounds, which are that: • there are justifiable doubts as to the arbitrator’s independence or impartiality; or • the arbitrator lacks agreed qualifications. The tribunal decides on the challenge. If unsuccessful, the party may appeal the decision to the High Court Division (Section 14 (4)). 4.5 Arbitrator Requirements Independence and impartiality are fundamental requirements. Section 13 of the Arbitration Act 2001 mandates that a prospective arbitrator must disclose any circumstances likely to give rise to justifiable doubts regarding their independence or impartiality. This duty is ongoing. An arbitral tribunal seated in Bangladesh is permitted to award binding preliminary or interim relief. Under Section 21 of the Arbitration Act 2001, the tribunal may order any interim measure of protection it con- siders necessary in respect of the subject matter of the dispute. 5.2 Role of Domestic Courts Domestic courts play a supportive role. A landmark decision by the Appellate Division ( Italian Thai Devel- opment v Export-Import Bank of China ) confirmed that Bangladeshi courts have the authority to grant interim measures in support of arbitration, even if the seat is outside Bangladesh (Section 7A). Courts can grant relief before, during or until the enforcement of the award. 5.3 Security for Costs The national law allows both the courts and the arbi- tral tribunal to order security for costs. Section 21 (2) 5. Preliminary and Interim Relief 5.1 Types of Relief
3. Substantive Protections and Breaches 3.1 Common Complaints
The most frequently cited complaints by investors against Bangladesh centre on breaches of contract by SOEs and allegations of expropriation. • Breach of contract – disputes frequently arise from alleged breaches of production sharing contracts (PSCs), PPAs, and PPP agreements, including issues related to cost recovery, tariffs, failure to make payments, and premature termination. • Expropriation – claims of indirect expropriation are significant. The Saipem case established that judicial interference with an arbitration and the nullification of an award by domestic courts can constitute an unlawful expropriation of contractual rights. Parties generally enjoy broad autonomy in selecting arbitrators, subject to the applicable BIT or contract and the chosen arbitration rules. The Arbitration Act 2001 reflects this autonomy; Section 12 (2) explicitly states that a person of any nationality may be an arbi- trator, unless otherwise agreed by the parties. 4.2 Default Procedures If the parties’ chosen method for selecting arbitra- tors fails, the default procedure is governed by the applicable arbitration rules. If the Arbitration Act 2001 applies, Section 12 provides a default mechanism, involving judicial assistance from the Chief Justice of Bangladesh or a designated Supreme Court judge for international commercial arbitration (Section 12 (5)). 4.3 Court Intervention Courts in Bangladesh intervene in the selection of arbitrators primarily as a default appointing author- 4. The Arbitral Tribunal 4.1 Limits on Selection
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