Home ›› 03 Apr 2023 ›› Front
Experts and business leaders on Sunday underscored the need for reforming Arbitration Act 2001 in order to make a smart arbitration model with digitised mechanism as well as to attract more foreign direct investment (FDI).
They also urged the government to formulate an international commercial court, so that the country can dispose of disputes in an expedited manner.
They made the remarks at a seminar, titled “Revisiting Arbitration Act for Promoting FDI in Bangladesh”, organised by Dhaka Chamber of Commerce & Industry (DCCI) at its auditorium in Dhaka.
Speaking at the event, British High Commissioner Robert Chatterton Dickson said, “Bangladesh has progressed tremendously in the last two decades. The country’s LDC graduation is due after three years only and reforming the arbitration act will help improve ease of doing business which ultimately would pave the way to more FDI.”
“After LDC graduation, Bangladesh will have to compete with other countries. Foreign investors need the protection of their investment and faster litigation process through arbitration and mediation are very effective,” he said.
Observing that it is possible to reform commercial laws, Dickson said, “It is possible to make improvements and in that case, India could be a good example.”
He said enforcement of contracts is the key challenge to the improvement of the business climate in Bangladesh. Regulatory and policy reforms with systematic improvement need to continue to improve the business climate.
DCCI president Md Sameer Sattar said a stable business environment backed by an efficient dispute resolution system is one of the prerequisites for attracting FDI.
He said, “In order to continue the ongoing growth and success of our business climate, it is essential that we establish a legal framework that enables swift and efficient contract enforcements, particularly in the context of cross-border commercial disputes.”
“Therefore, it is essential to reform the Arbitration Act as the first step towards addressing such challenges,” Sattar added.
“With the growth of FDI inflow in Bangladesh, the number of commercial disputes has risen significantly over the last few decades. As a result, arbitration has emerged as the pre-eminent mode of dispute resolution in recent times,” he also said.
The DCCI chief said arbitration is meant to be a fast and cost-effective way of resolving commercial disputes and traditionally, foreign investors prefer arbitration to national court litigation when resolving cross-border disputes.
Presenting the keynote at the seminar, Bangladesh Supreme Court Advocate Ashraful Hadi observed that the arbitral tribunal should have the same power as the court.
“The definition of ‘court’ under the Arbitration Act 2001 should include the High Court in respect of international commercial arbitration. Besides, the payment method of the stamp duty in all aspects should be digitised,” he added.
He also recommended making a “central database” for domestic and international arbitration proceedings. “Bangladesh can become a suitable venue for arbitration among foreigners or foreign investors. We should formulate an international commercial court so that we can dispose of disputes in an expedited manner,” he added.
Unilever Bangladesh Ltd CEO Zaved Akhtar said arbitration needs specialised resources and an understanding of different aspects as well. “We need a smart arbitration model with a digitised mechanism. Moreover, awareness is very crucial to make it more familiar among the business community,” he said.
Grameenphone CEO Yasir Azman said that predictability, certainty, and protection of investment are important for arbitration. Arbitration Act 2001 was a laudable initiative, but now it needs reforms.
Addressing the seminar virtually, Advocate of India Promod Nair said India has amended its Arbitration Act and after that reform, the country’s position in the ease of doing business index has improved.
“India has separate commercial courts to deal with business disputes only. Moreover, the Act has identified specific time limits and fees for each arbitration proceeding. We have an online dispute resolution mechanism that reduces costs and time as well,” he also said.
Speaking as the chief guest at the seminar, Law Minister Anisul Huq said, “Through alternative dispute resolution (ADR) mechanism, we can get faster access to justice. The government is committed to making the best possible business-friendly rules and regulations. Arbitration Act 2001 may be revised.”
Urging the business community to use ADR, he said, “Through an effective ADR mechanism, FDI inflow will increase a lot. The Mediation convention will be signed. The CPC Act has already been amended.”
He also agreed that arbitration proceedings should have a fixed time frame. DCCI Vice President Md Junaed Ibna Ali gave the vote of thanks at the seminar.
