Arbitration PDF

THE NEW LAW OF INTERNATIONAL COMMERCIAL
ARBITRATION IN BANGLADESH: A COMPARATIVE

PERSPECTIVE
Dr. A. F. M. Maniruzzaman∗
I. INTRODUCTION
Bangladesh has recently enacted a new arbitration law, known as “The

Arbitration Act, 2001 (the “Act”).” The Act came into force on April 10, 2001.1
The Act has repealed The Arbitration (Protocol and Convention) Act, 1937 and
The Arbitration Act, 1940.2 With this new enactment Bangladesh has kept pace
with the recent trends in the field of international commercial arbitration in the
rest of the world. Such a legislative step was urgent in the face of increasing
foreign investment in various sectors, especially in the natural gas and power
sectors in Bangladesh, and her ever-growing export trade with the rest of the
∗
LLB. (Honors) (Dhaka) (first in First Class); LLM. (Dhaka) (first in First Class); M.
Int’l Law (Australian Nat’l University) (Distinction); PhD (Cambridge); FRSA, London;
Professor of International and Business Law (elect), University of Portsmouth, U.K.;
Senior Lecturer in Law, Kent Law School, University of Kent, U.K.; Advocate, Supreme
Court of Bangladesh, Dhaka; Associate Member, International Chamber of Commerce
Institute of World Business Law, Paris; Member, Chartered Institute of Arbitrators,
London; Member, International Committee on International Commercial Arbitration,
International Law Association, London; Member, Swiss Arbitration Association,
Switzerland; International Legal Consultant; Sometime Visiting Scholar, St. John’s
College, University of Oxford and Centre of International Studies, University of
Cambridge; Sometime Visiting Fellow, Lauterpacht Research Centre for International
Law, Cambridge.
The author can be contacted by e-mail at: [email protected]. or
[email protected].
The author wishes to thank most warmly Justice Shahabuddin Ahmed, formerly The
Hon’ble President of the People’s Republic of Bangladesh (1996-2001) and the Chief
Justice of Bangladesh (1990-1995), and currently Honorary Bencher of the Gray’s Inn,
London for his incisive comments and advice on an earlier draft of this article.
1
Vide Notification No. SRO 87-Law/2001 dated 9-04-2001, published in
BANGLADESH GAZETTE EXTRAORDINARY, dated 10-04-2001. Section 56 of The
Arbitration Act, 2001 [hereinafter the Act] states: “After the commencement of this Act
[the Bangla text], the Government shall, by notification in the official Gazette, publish an
Authentic text in English which shall be known as the Authentic English Text, of this Act :
Provided that in the event of any conflict between this Act and the English text, this Act
shall prevail.” It should be noted that the official Authentic English Text of the Act has not
been published yet by the Government of the People’s Republic of Bangladesh.
2
The Act, Sec. 59(1).
139
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140 THE AMERICAN REVIEW OF INTERNATIONAL ARBITRATION [Vol. 14
world. The new Act, principally based on the UNCITRAL Model Law on
International Commercial Arbitration (1985),3 consolidates the law relating both
to domestic and international commercial arbitration. The new Act thus creates a
single and unified legal regime for arbitration in Bangladesh which has also been
the trend in recent years elsewhere.4 However, in the context of international
commercial arbitration, the Act has specific prescriptions which are not applicable
to domestic arbitration. In certain respects it has drawn on the Indian Arbitration
and Conciliation Act, 1996.5 This is obviously in tune with the reality of the
region as a growing popular destination for foreign investment.
The new Act represents a significant improvement over its predecessor, the
Arbitration Act (X of 1940), a legacy of the British Raj in the Indian sub-
continent. Until recently, the 1940 Act governed arbitration in India and
Bangladesh, and it still does in Pakistan. Thus the 1940 Act is the common
heritage of all these countries. Experience had taught that a change in the arbitral
legal regimes in these countries was a must. As the Supreme Court of India once
noted:
Interminable, time consuming, complex and expensive court procedures impelled

jurists to search for an alternative forum, less formal, more effective and speedy
for resolution of disputes avoiding procedural claptrap and this led them to
Arbitration Act of 1940. However, the way in which the proceedings under the
Act are conducted and without an exception challenged in Courts, has made
lawyers laugh and legal philosophers weep. Experience shows and law reports
bear ample testimony that the proceedings under the Act have become highly
technical accompanied by unending prolixity, at every step providing a legal trap
to the unwary. Informal forums chosen by the parties for expeditious disposal of
their disputes has by the decisions of the Courts been clothed with “legalese” of
unforeseeable complexity.6
In light of their common historical experience as such, both Bangladesh and

India have recently modernized their arbitration laws along the lines of the
UNCITRAL Model Law. The modernization of law relating to international
commercial arbitration in Bangladesh by the 2001 Act gives her a facelift as an
3
UNCITRAL Model Law on International Commercial Arbitration, U.N. GAOR,
th
40 Sess., Annex I, U.N. Doc. A/40/17, Annex 1 (1985), available at
http://www.uncitral.org/ en-index.htm.
4
For example, in Germany and India. See the German Arbitration Act (1998)
incorporated in the German Code of Civil Procedure (ZPO) Arts. 1025-1066; Indian
Arbitration and Conciliation Act, 1996.
5
Indian Arbitration and Conciliation Act (1996) [hereinafter the Indian Act],
available at http://www.indialawinfo.com/bareacts/arbc.html#_Toc500592248.
6
The Gurunanak Foundation case, (AIR 1981 SC 2075), per Justice D.A. Desai.
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2003] NEW LAW OF INTERNATIONAL COMMMERCIAL ARBITRATION IN BANGLADESH 141
attractive place for dispute resolution in the field of international trade, commerce
and investment.
In this article the new Bangladesh Act will be discussed, wherever relevant,
with reference to the Model Law and the The Indian Act, 1996 and beyond. The
purpose here is to examine how both the new Bangladesh Act and its counterpart
in the sub-continent, i.e. the Indian Act have followed the Model Law as a model
or a source of inspiration and how the new Bangladesh law fares with the recent
trends of modernization of international arbitration law.
II. INTERNATIONAL COMMERCIAL ARBITRATION DEFINED
In defining “international commercial arbitration,” the new Bangladesh Act

has adopted verbatim the definition of The Indian Act,7 1996, but has deviated
from the UNCITRAL Model Law.8 In this respect Bangladesh or Indian Law
significantly differs from the Model Law. The former defines the
“internationality” of arbitration in terms of natural or juridical personality, i.e.
nationality, or other status of the parties, and the latter in terms of locale of
business of the parties or of the subject matter of the dispute. Thus, according to
the new Bangladesh Act, a party to international commercial arbitration has to
qualify as (i) an individual who is a national of, or habitually resident in, any
country other than Bangladesh; (ii) a body corporate which is incorporated in any
country other than Bangladesh; (iii) a company or an association or a body of
individuals whose central management and control is exercised in any country
other than Bangladesh; or (iv) the government of a foreign country. This means
that a commercial dispute between two Bangladeshi nationals having places of
business even in different States cannot be considered the subject matter of
international commercial arbitration under the new Act, which would be otherwise
possible under the Model Law. In this context the internationality of the nature of
the transactions, in that they take place in different jurisdictions, has been
subjugated to the nationality of the disputing parties. Nationality thus remains one
of the determinative factors of the international character of arbitration. Such a
prescription, however, is found in recent legislation of some other countries such
as Iran.9
7
The Indian Act, §2(1)(f) (1996).
8
UNCITRAL Model Law, Art. 1(3).
9
Law on International Commercial Arbitration of Iran, Art. 1(b) (1997), translated in
15(3) J. INT’L ARB. 42 (1998).
III. ARBITRATION AGREEMENT
On the definition and form of the arbitration agreement, the new Act adopts
verbatim the Model Law provisions. Thus an arbitration agreement, either in the
form of an arbitration clause in a contract or in the form of a separate agreement,
may be concerned with future and existing disputes respectively.10 The new Act11
requires the arbitration agreement to be in writing exactly in the same manner as
the Model Law prescribes.12 In other words, the new Act follows verbatim the
Model Law prescription on the matter which has, in fact, wider scope than that of
the New York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards of 1958.13 However, unlike the Model Law or the New York
Convention, the new Act specifically mentions “fax” and “e-mail” as the modes of
writing amongst others, which are, of course, implied in the expression “other
means of telecommunication” in the former.
IV. COMPOSITION OF THE ARBITRAL TRIBUNAL
The new Act gives the parties the freedom to determine the number of
arbitrators.14 Failing such determination, the number of arbitrators shall be three.15
Thus the Act confirms the Model Law prescription on the number issue in contrast
to the Indian Act 1996 which provides for a sole arbitrator in the absence of the
parties’ determination.16 Subject to some restrictions, the parties are free under the
new Act to agree on a procedure for appointing an arbitrator or arbitrators.17
Following the recent trend towards the internationalization of arbitration, the new
Act does not impose any restriction on the nationality of the arbitrator and leaves
the matter to the choice of the parties.18 On the matter of appointment of
arbitrators, though the new Act is principally based on the Model Law, the
provision in question19 follows, in its details, most closely that of the Indian Act
199620 as far as it relates to international commercial arbitration. Failing any
agreement between the parties on a procedure for appointing the arbitrator or
10
The Act, Sec. 2(n).
11
Id. at Sec. 9(2).
12
The UNCITRAL Model Law, Art. 7(2).
13
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards
of 1958, 21 U.S.T. 2517 (1970), Art. II(2).
14
15
Id. at Sec. 11(2).
16
The Indian Act, Sec. 10(2).
17
18
Id. at Sec. 12(2).
19
Id. at Sec. 12.
20
The Indian Act, Sec. 11.
arbitrators, the new Act puts in place a specific default procedure in the following
cases of failure21 : (i) of the parties to agree on a sole arbitrator; (ii) of a party to
appoint its own arbitrator despite the request by the other party; (iii) of the
appointed arbitrators to agree on the third arbitrator in the case of an arbitration
with three arbitrators. Such a default procedure is also available under an
appointment procedure agreed between the parties in the following cases of
failure22 : (i) of a party to act as required under the agreed procedure; (ii) of the
parties or the arbitrators to reach an agreement under the same procedure; (iii) of a
person or any third party to perform any function assigned to him under that
procedure, unless other means for securing the appointment is provided by the
parties’ agreement on the appointment procedure.
Under the default procedure in all the foregoing cases, upon the application of
a party (i) the District Judge within whose local jurisdiction the concerned
arbitration agreement has been entered into, in case of arbitration other than
international commercial arbitration and (ii) the Chief Justice of the People’s
Republic of Bangladesh or any other Judge of the Supreme Court designated by
the Chief Justice in case of international commercial arbitration, shall make the
appointment of the arbitrator or arbitrators within sixty days from the receipt of
the application thereof. As the case may be, they can appoint a sole arbitrator, or
in the case of a multi-arbitrator arbitration, all the arbitrators including the
Chairman of the arbitral tribunal from amongst them.23 Especially, in the case of
appointment of a sole arbitrator or a third arbitrator in an international commercial
arbitration, the Chief Justice or his designate, a Judge of the Supreme Court, may
appoint an arbitrator of a nationality other than the nationalities of the parties,
when the parties belong to different nationalities.24 Thus, the new Act makes a
distinction between domestic and international arbitration in case of appointment
of arbitrators by the statutorily designed judicial authorities in the default
procedure. In appointing arbitrators in cases of both domestic and international
arbitration in the default procedure two conditions are to be fulfilled,25 i.e. that due
regard be had: (i) for any qualifications required of the arbitrator under the
agreement between the parties, and (ii) for such considerations as are likely to
secure an independent and impartial arbitrator. Concerning the appointment of
arbitrators, the decisions of such statutorily designated judicial authorities are final
in their respective cases.26 The new Act also provides a two-pronged strategy for
the statutory authorities to deal with the appointment of arbitrators under Section
21
The Act, Sec. 12(3) and (4).
22
Id. at Sec. 12(7).
23
Id. at Sec. 12(6).
24
Id. at Sec. 12 10).
25
Id. at Sec. 12(9).
26
Id. at Sec. 12(12).
12, as discussed above, in a more efficient way. First, the Chief Justice, in case of
international commercial arbitration, and the District Judge, in case of domestic
arbitration, may make such scheme as he may deem appropriate for dealing with
the appointment matter under the section.27 In this regard the Indian Act 1996 has
a similar provision.28 Secondly, the Chief Justice may entrust a Judge with the
duties for a particular case or cases, or for discharging the entire duties and may
fix up the tenure of that Judge for the purposes of appointment of arbitrators under
the section.29 It is noteworthy that a specific Court has been set up in the High
Court Division with the jurisdiction of appointment of arbitrators in respect of
international arbitration under the new Bangladesh Act. In this regard the new Act
creates an innovation which is not even prescribed in the Model Law.
The appointment of an arbitrator may be challenged on the issues of (i)
impartiality, (ii) independence, and (iii) the arbitrator’s qualifications agreed to by
the parties.30 Like the Model Law and the Indian Act 1996, the new Act rests the
onus on the arbitrator concerned to disclose any circumstances likely to give rise
to justifiable doubts as to his independence or impartiality.31 This applies not only
at the time of his appointment but also throughout the arbitral proceedings.32 The
parties are free under the new Act to agree on a procedure for challenging an
arbitrator.33 This also means that the parties have the freedom to choose any
person, institution or a court to decide the challenge. The parties thus can bypass
the arbitral tribunal to have the matter decided by a third party.
In the absence of any agreed procedure for challenge between the parties, the
party intending to challenge an arbitrator shall, in the first instance, approach the
arbitral tribunal itself. The party aggrieved by the decision of the arbitral tribunal
on the matter, has the option to appeal from such decision to the High Court
Division of the Supreme Court of Bangladesh34 which has the final word on the
challenge issue. Such an intervention by the High Court Division is especially
desirable when the challenge is rejected by the sole arbitrator against whom it is
leveled. It is noteworthy that in the default procedure, as discussed above, it is the
Chief Justice of Bangladesh or his designate, a judge of the Supreme Court, who
must appoint an arbitrator/arbitrators in international commercial arbitration,
while in case of appeal from the decision of the arbitral tribunal on the challenge
27
Id. at Sec. 12(11).
28
29
30
Id. at Sec. 13.
31
Id. at Sec. 13(1).
32
Id. at Sec. 13(2).
33
Id. at Sec. 14.
34
The Supreme Court of Bangladesh comprises two divisions, i.e., the Appellate
Division and the High Court Division. (Art. 94, The Constitution of the People’s Republic
of Bangladesh, 1972).
of an arbitrator, both in domestic and international commercial arbitration, it is the

High Division of the Supreme Court that must be approached as a matter of
course.
In the context of challenge of an arbitrator, the approaches to arbitration differ
significantly in the new Bangladesh Act, the Indian Act, 1996 and also the Model
Law. The new Bangladesh Act provides35 that the concerned arbitral tribunal, in
case of such a challenge, has to wait until the challenged matter is finally disposed
of. Even during the appeal against the decision of the arbitral tribunal on the
challenge to the High Court Division, the arbitral tribunal has to stay put. It is only
when such a challenge or the appeal against the decision of the arbitral tribunal is
not successful, that the arbitral tribunal shall continue the arbitral proceedings and
make an award.36 However, it has to be mentioned that in order to avoid any
undue delay for such intervention by the court the new Act,37 unlike the Model
Law,38 has specifically prescribed a stringent time limit (i.e. ninety days from the
date on which the appeal is filed) within which the High Court must decide the
appeal. Though the Indian Act, 1996 has similar provisions on the challenge
procedure,39 it has not provided, unlike the new Bangladesh Act and the Model
Law, for the intervention by a court on the challenge issue. It mandates the arbitral
tribunal to continue the arbitral proceedings and to make an arbitral award, once
the challenge has proven unsuccessful under the parties’ agreed procedure or the
arbitral tribunal has rejected the challenge, as the case may be.40 In the
circumstances, under the Indian Act, unlike the Model Law, the arbitral tribunal
has no option but to carry on with its mission as such as it is mandatorily required
to do so.41 Although the Indian Act cuts short the court intervention as a
procedural remedy, it allows the challenging party expressly to make an
application for setting aside such an arbitral award under its Section 34, which
deals with the matter.42
The Model Law allows the concerned arbitral tribunal, including the
challenged arbitrator, to continue the arbitral proceedings and to make an award
despite the fact that a request by the challenging party on the issue may be
pending before a court or other competent authority.43 The Model Law’s approach
is said to be based on the rationale that it strikes “an appropriate balance between
the need for preventing obstruction with dilatory tactics and the desire of avoiding
35
36
Id. at Sec. 14(6).
37
Id. at Sec. 14(5).
38
See UNCITRAL Model Law, Art. 13(3).
39
40
Id. at Sec. 13(4).
41
Id.
42
Id. at Sec. 13(5).
43
unnecessary waste of time and money.”44 However, it cannot be said that such an
approach is always foolproof in all circumstances. The only safeguard in the
Model Law provision against the-last minute surprise (i.e., lest the court should
accept the so-called challenge after the award is rendered by the tribunal) is the
arbitral tribunal’s prudence as indicated in the use of the word “may” instead of
“shall” in the last sentence of paragraph 3 of Article 13. Thus, “… the arbitral
tribunal, including the challenged arbitrator, may continue the arbitral proceedings
and make an award.”45 If the arbitral tribunal has any real concern about the
challenge by a party which is pending before a court or other competent authority,
it will not continue the arbitral proceeding, as it is not bound to do so, until the
matter is settled by the court, whose decision is, of course, subject to no appeal.
The tribunal’s prudence as such will save everyone’s time and efforts and, above
all, the parties’ money.
Under Section 11(6) of the Indian Act, 1996 the question arose whether the
order passed by the Chief Justice or his nominee46 on the matter of appointing an
arbitrator is administrative or judicial in nature.47 The question is important in
relation to the remedy that may be available in case the Chief Justice or his
nominee turns down the request for appointment of an arbitrator. Recently, in a
series of cases48 the Supreme Court of India has decided that such an order passed
by the Chief Justice or his nominee in exercising his power under Section 11(6) is
an administrative order and not a judicial one. However, if it were considered to
be a judicial order, a Special Leave petition under Article 136 of the Constitution
of India would lie. The Supreme Court of India is also of the view that since the
order passed by the Chief Justice or his nominee that turns down the request for
appointment of an arbitrator for some reason is administrative in nature, the
remedy lies in the writ petition before the High Court. Such an order is an act of
non-performance of duty; the issuance of a writ of mandamus in accordance with
law will dictate that the concerned authority perform its duty. The characterization
of the order passed by the Chief Justice or his nominee under Section 11(6) of the
Indian Act also impinges on the degree of prolongation of the process of remedies.
As one Indian lawyer notes, “the order of the Chief Justice or his nominee, if
treated as an administrative order, could be challenged before a single judge of the
44
See the Report of United Nations Commission on International Trade Law,
Doc.A/40/17, para.124, available at http://www.uncitral.org/en-index.htm.
45
Emphasis added.
46
The reference to “Chief Justice” in case of international commercial arbitration
refers to the “Chief Justice of India,” and in case of any other arbitration, i.e. domestic
arbitration, the Chief Justice of the High Court. See the Indian Act, Sec. 12(a) and (b).
47
Konkan Railway Corporation Ltd. v. Rani Construction (P) Ltd., (2002) 2 SCC
388; Konkan Railway Corporation Ltd. v. Mehul Construction Co., [2000] 3 Arb.L.R.
162, SC; Ador Samia Pvt. Ltd. v. Peekay Holdings Ltd., [1999] 3 Arb.L.R. 185, SC.
48
See note 47 supra.
High Court by way of writ petition, and then in appeal before a division bench of
the High Court, and then again in the Supreme Court under Article 136 [of the
Constitution of India], and this would delay arbitration proceedings. If the order
was treated as judicial, there would only be one appeal to the Supreme Court
under Article 136.”49 Amongst the important objectives of the modernization of
Indian arbitration law along the lines of the UNCITRAL Model Law have been to
expedite the dispute resolution process as well as to minimize judicial intervention
in the arbitral process. Such objectives are likely to be frustrated if the
characterization as administrative of the order passed by the Chief Justice or his
nominee is meant to prolong the arbitral process. In order to correct the situation,
the Indian Ministry of Law has recently proposed an amendment to Section 11(4)
to (12) to replace the words “Chief Justice of India” and the word “Chief Justice”
by the words, “Supreme Court” and “High Court”, so that the appointment of the
arbitral tribunal is made on the judicial side.50 Since the new Bangladesh Act,
2001 mainly follows the Indian Act on the matter (appointment of arbitrators51),
similar issues might arise in due course. It remains to be seen what Bangladesh
Courts will have to decide on the issues concerned under Section 12(3) to (7) of
the new Act.52 Such an occasion has not yet arisen under the new Act.
V. JURISDICTION OF ARBITRAL TRIBUNALS
A. The Doctrine of Compétence-Compétence
In keeping pace with the recent developments in the field of international

commercial arbitration, the new Bangladesh Act has adopted the doctrines of
compétence-compétence53 and autonomy of the arbitration clause54 in the context
of the jurisdiction of arbitral tribunals. Unlike the Model Law and the Indian Act
of 1996, which have identical provisions on the matter of compétence-
compétence and allow the arbitral tribunal unbridled freedom in this regard, the
new Bangladesh Act restricts such freedom with the words “unless otherwise
49
Ranbir Krishan, Appointment of an Arbitrator in Arbitration Proceedings under the
Indian Arbitration and Conciliation Act 1996, [2001] INT’L A.L.R 90, 92.
50
See the Text of Ministry of Law’s Proposals for Amendments in the Arbitration &
Conciliation Act, 1996, available at [http://www.ficci.com/icanet/Quaterly-July-Sep-
2002.pdf.]
51
52
Cf. Art. 102, The Constitution of the People’s Republic of Bangladesh, 1972.
53
The Act, Sec. 17. See generally, ADAM SAMUEL, JURISDICTIONAL PROBLEMS IN
INTERNATIONAL COMMERCIAL ARBITRATION, 177-185 (1989).
54
The Act, Sec. 18. See generally Janet Rosen, Arbitration under Private Inter-
national Law: The Doctrines of Separability and Compétence de la Compétence, 17
FORDHAM INT’L L.J. 599 (1994).
agreed by the parties.”55 Subject to such proviso, the arbitral tribunal may rule on
its own jurisdiction or any questions concerning its jurisdiction. Section 17 of the
new Act, thus dealing with the matter, has enumerated, as a matter of guidance,
five jurisdictional questions, not meant to provide an exhaustive list, on which
the arbitral tribunal may exercise its power of compétence de la compétence. The
enumerated questions are as follows: (a) whether there is in existence a valid
arbitration agreement; (b) whether the arbitral tribunal is properly constituted; (c)
whether the arbitration agreement is against public policy; (d) whether the
arbitration agreement is incapable of being performed, and (e) what matters have
been submitted to arbitration in accordance with the arbitration agreement. The
arbitral tribunal may, subject, of course, to the aforementioned proviso, rule on
its own jurisdiction on any questions beyond the above list. It is probable that the
arbitral tribunal may decide questions of jurisdiction not only at the instigation of
the parties but also on its own motion. Thus, whatever the parties might have
agreed otherwise, if, for instance, public policy issues56 arise concerning the
arbitration agreement or generally in other respects, it seems incumbent on the
arbitral tribunal to look into the matter in order to decide its own jurisdiction.57
55
Both the Model Law (Art. 16, para.1) and the Indian Act of 1996 (Sec. 16, para.1)
have used the identical expression: “The arbitral tribunal may rule on its own jurisdiction
…” It should be noted that the UNCITRAL engaged in discussion on this issue at some
length and the Commission Report summarized it in the following words :
As regards the power given to the arbitral tribunal in paragraph (1), concern was
expressed that the provision was not acceptable to certain States which did not
grant such power to arbitrators or to those parties who did not want arbitrators to
rule on their own jurisdiction. It was stated in reply that the principle embedded
in the paragraph was an important one for the functioning of international
commercial arbitration; nonetheless, it was ultimately for each State, when
adopting the Model Law, to decide whether it wished to accept the principle and,
if so, possibly express in the text that parties could exclude or limit that power.
[emphasis added]. The Commission Report (Docs.A/40/17), para.151.
56
See generally Pierre Lalive, Transnational (or Truly International) Public Policy
and International Arbitration, in COMPARATIVE ARBITRATION PRACTICE AND PUBLIC
POLICY IN ARBITRATION 257 (Pieter Sanders ed., 1987); JULIAN D.M. LEW, APPLICABLE
LAW IN INTERNATIONAL COMMERCIAL ARBITRATION: A STUDY IN COMMERCIAL
ARBITRATION AWARDS 531-80 (Kenneth R. Simmonds ed., 1978); A. F.M.
Maniruzzaman, International Arbitrator and Mandatory Public Law Rules, 7(3) J. INT’L
ARB. 53(1990).
57
See, e.g., U.S. jurisprudence – Russolillo v. Thomas McKinnon Securities, Inc., 694
F.Supp. 1042, 1045 (D.Conn.1988): “Since the claim of illegality or violation of public
policy is not specifically directed to the arbitration clause itself, the broad arbitration
clause requires arbitration of the claim that the contract as a whole was made illegally.”
B. Autonomy of the Arbitration Clause
The second doctrine, i.e. “autonomy of the arbitration clause”58 described by

some as “a conceptual cornerstone of international arbitration,”59 buttresses the
first one, i.e. the compétence-compétence doctrine. As far as the arbitral
jurisdictional issues are concerned, both doctrines prove to be the “two sides of
the same coin,” or, for that matter, “the birds of the same feather.” As Judge (as
he then was) Schwebel noted, “If it is inherent in the arbitral (and judicial)
process that a tribunal is the judge of its own jurisdiction, that it has compétence
de la compétence, it is no less inherent in that process that an arbitral tribunal
shall have the competence to pass upon disputes arising out of the agreement
which is the immediate source of the tribunal’s creation even where those
disputes engage the initial or continuing validity of that agreement.”60
The autonomy of the arbitration clause doctrine is sometimes expressed as
the “separability” or the “severability” of the arbitration clause. The new
Bangladesh Act opted for the latter expression. Whatever is the expression –
“autonomy,” “separability,” or “severability” of the arbitration clause–it means
that the arbitration clause is separate from the principal contract in which it is
contained. Thus the arbitration clause is given an enclave status. Whatever
happens to the principal contract in which it is contained should not affect it.
Thus the arbitration clause will always survive the principal contract. The
theoretical foundation on which the doctrine stands has been well described by
Schwebel in the following words : “Thus when the parties to an agreement
containing an arbitration clause enter into that agreement, they conclude not one
but two agreements, the arbitral twin of which survives any birth defect or
acquired disability of the principal agreement.”61 This twin sister analogy
between the arbitration clause and the principal agreement might sound like a
See also Republic of the Philippines v. Westinghouse Electric Corp., 714 F.Supp. 1362
(D.N.J. 1989).
58
See generally STEPHEN SCHWEBEL, THE SEVERABILITY OF THE ARBITRATION
AGREEMENT IN INTERNATIONAL ARBITRATION : THREE SALIENT PROBLEMS 1 (1987); Ulf
K. Nordenson, Autonomy of the Arbitration Agreement, in 60 YEARS OF ICC
ARBITRATION: A LOOK AT THE FUTURE 301 (ICC ed., 1984); Adam Samuel, Separability
in English Law – Should an Arbitration Agreement Be Regarded as an Agreement
Separate and Collateral to a Contract in Which it is Contained?, 3(9) J. INT’L ARB 95
(1986); Kaj Hobér, The Doctrine of Separability under Swedish Arbitration Law
(Including Comments on the Position of American and Soviet Law), in Svensk
Juristtidning 251-71 (1983).
59
W. LAURENCE CRAIG ET AL., INTERNATIONAL CHAMBER OF COMMERCE
ARBITRATION §5.04 (2nd ed. 1990).
60
SCHWEBEL, supra note 58 at 3.
61
Id. at 5.
fiction. International arbitral practice has, however, embraced the doctrine as a

matter of practical exigency because of the legitimate expectation that the
arbitration clause creates for the parties when it is inserted in the principal
agreement. The insertion of such a clause at least provides the parties with the
chance to ventilate their grievances through it about the principal agreement
whatever they may be. If the clause is considered to die with the presumed death
of the principal agreement, there would be nothing left for the parties to look for,
at least for one party who is so genuinely hopeful. This is how the practical
exigency lends support to the survival of the arbitration clause even in the case of
the death of the principal agreement in which it is contained.
Unlike the Model Law and the Indian Act, 1996 provisions regarding
severability of the arbitration clause, the new Bangladesh Act provision appears
straightforward. The latter provision tends to say that the validity of the arbitration
agreement has to be determined on its own and has nothing to do with the
principal agreement of which it is part. In other words, the invalidity of the
principal agreement should not affect the arbitration clause in which it is
contained. This is in essence what the Model Law has explicitly provided, also
reproduced in the Indian Act,62 that “[a] decision by the arbitral tribunal that the
contract is null and void shall not entail ipso jure the invalidity of the arbitration
clause.”63 The new Bangladesh Act has not, however, used the Model Law
prescription in express terms. The Model Law provision still remains vulnerable
in certain respects. It does not clearly answer the question whether the arbitration
clause still survives even though the agreement of which it forms part never came
into being or was null and void ab initio. In some quarters64 these two situations of
the principal contract are considered exceptions to the well-recognized doctrine of
the autonomy of the arbitration clause. With regard to the first, Professor Pieter
Sanders, a valiant advocate of the doctrine, said:
If the question arises whether the parties have indeed concluded a contract
containing an arbitration clause, the jurisdiction of the arbitrator is put in
question. If there is no contract at all, the legal basis of the arbitrator’s powers
which reside in the arbitration clause found in the contract, is also missing.65
The provision of the English Arbitration Act 1996 on this matter deviates
from the language of the Model Law. The English provision is more explicit
62
The Indian Act, Sec. 16(b).
63
64
ARON BROCHES, COMMENTARY ON THE UNCITRAL MODEL LAW ON
INTERNATIONAL COMMERCIAL ARBITRATION 78-79 (1990); ALAN REDFERN & MARTIN
HUNTER, LAW AND PRACTICE OF INTERNATIONAL COMMERCIAL ARBITRATION 134 (1986);
Schwebel supra note 58 at 11-12.
65
As quoted in BROCHES supra note 64 at 78.
providing: “an arbitration agreement which forms or was intended to form part of
another agreement … shall not be regarded as invalid, non-existent or ineffective
because that other agreement is invalid or did not come into existence or has
become ineffective, and it shall for that purpose be treated as a distinct
agreement.”66
The theory of the autonomy of the arbitration clause seemingly loses its lustre
when the validity of the arbitration clause is itself in issue as the courts in different
countries have had to grapple with the issue whether the arbitral tribunal or the
court has jurisdiction to decide it.67 The new Bangladesh Act authorizes the
arbitral tribunal in broad terms to have jurisdiction on such issues.68
VI. OBJECTION TO THE JURISDICTION OF THE ARBITRAL TRIBUNAL
Like the Model Law, the new Bangladesh Act specifies the time within which
an objection to the jurisdiction of the arbitral tribunal may be raised. Thus, it
provides that such an objection “shall be raised not later than the submission of
the statement of defense.”69
However, it should be mentioned that any International Chamber of
Commerce (“ICC”) arbitration taking place in Bangladesh under the 1998 ICC
Arbitration Rules, according to which such jurisdictional objections may be raised
throughout the proceedings and not just at the time of the submission of the
statement of defense,70 might contradict the prescription of the new Bangladesh
66
Sec. 7 (emphasis added).
67
See generally, Tanya J. Monestier, Nothing Comes of Nothing” … Or Does it ??? A
Critical Re-examination of the Doctrine of Separability in American Arbitration, 12 AM.
REV. INT’L ARB. 223 (2001); Ikko Yoshida, Interpretation of Separability of an
Arbitration Agreement and Its Practical Effects on Rules of Conflict of Laws in Arbitration
in Russia, 19 ARB. INT’L 95 (2003); Richard H. Kreindler, Aspects of Illegality in the
Formation and Performance of Contracts, 2003(1) INT.A.L.R. 1, 7 ff.; William W. Park,
Determining Arbitral Jurisdiction : Allocation of Tasks Between Courts and Arbitrators 8
AM. REV. INT’L ARB. 133 (1997); William W. Park, The Arbitrability Dicta in First
Options v. Kaplan : What Sort of Kompetenz-Kompetenz Has Crossed the Atlantic?, 12
ARB. INT’L. 137 (1996).
See also Anglia Oils Ltd. The Owners/Demise Charterers of the Vessel Marine
Champion, [2002] EWHC 2407 (Admlty), reported also in 3(4) ARB. LAW MONTHLY 1
(2003).
68
See The Act, Secs. 17 and 18.
69
Id. at Sec.19(1).
70
The 1998 ICC Arbitration Rules do not contain any requirement that objections to
the jurisdiction of the arbitral tribunal or the arbitrability of any claim be made at any
particular time.
Act.71 In such a conflict the Bangladesh courts would prefer the lex fori, i.e. the
Act 2001, as the lex arbitri on the matter concerned over the parties’ chosen
international institutional arbitration rules as the procedural law. One may wonder
whether with the tide of delocalization of international arbitration in the age of
globalization the parties’ choice would still be subservient to the lex fori72 as
represented in the “jurisdictional or the arbitral forum theory of arbitration.”73
International business people intending to arbitrate in Bangladesh might suffer
from the John Holland74 or the Dermajaya75 syndrome of uncertainty, only to be
cured by a legislative prescription for clarification as has recently happened in
Singapore.76 There is no denying the fact that following Article 19(1) of the
Model Law the new Bangladesh Act, 2001 provides in Article 25(1) that
“[s]ubject to this Act, the arbitral tribunal shall follow the procedure to be agreed
on by all or any of the parties in conducting its proceedings.” The questions still
remain as to what extent the parties’ choice of the arbitral procedural law will
prevail when such choice proves inconsistent with the Act itself, or simply
whether the choice of any foreign procedural law or any international institutional
arbitration rules will automatically exclude the application of the Act to the
procedural matters unless the parties have expressly so stated in their contract.
With regard to objections to the arbitral tribunal’s exceeding the scope of its
authority, the new Bangladesh Act requires the objection to be raised, during the
course of the arbitral proceedings, as soon as the matter alleged to be beyond the
71
See also for similar prescriptions The Indian Act, Sec.16(2); and the Swiss Private
International Law Act, 1987, Art. 186(2).
72
But see the controversial English decision – Bank Mellat v. Helliniki Teckniki SA,
[1984] 1 QB 291, 301 (CA): “English law does not recognise the concept of a ‘de-
localised’ arbitration … of arbitral procedures floating in the transnational firmament,
unconnected with any municipal system of law.” See also F.A. Mann, England Rejects the
“Delocalised” Contracts and Arbitration, 33 ICLQ 193 (1984); Amin Rasheed v. Kuwait
Insurance Company, [1983] 3 WLR 241, 245.
73
See A.F.M. Maniruzzaman, State Contracts and Arbitral Choice-of-Law Process
and Techniques – A Critical Appraisal, 15(3) J.INT’L ARB. 65, 67-72 (1998); F.A. Mann,
Lex Facit Arbitrum, in INTERNATIONAL COMMERCIAL ARBITRATION, LIBER AMICORUM
FOR MARTIN DOMKE 157 (Pieter Sanders ed., 1967).
74
John Holland Pty Limited v. Toyo Engineering Corp., [2001] 2 SLR 262.
75
Dermajaya Properties Sdn Bhd v. Premium Properties Sdn Bhd & Anor, [2002] 2
SLR 164.
76
For commentaries on the cases, see Tham Yuet-Ming, Changes to Singapore’s
Arbitral Laws and the Pitfalls of Choosing Singapore as the Seat of Arbitration, 2003
ASIAN DISPUTE REV. 193; K Minh Dang & Siva Murugaiyan, Exclusion of the UNCITRAL
Model Law in ICC Arbitrations – Developments in Singapore, 2001 ASIAN DISPUTE REV.
87; Andrew Chan and Alison Woodward, Singapore as a Place for Arbitration : Recent
Developments, 69(1) ARBITRATION (The Journal of the Chartered Institute of Arbitrators)
10 (February 2003).
scope of its authority is raised.77 A delayed plea concerning jurisdictional

objections, as aforementioned, may be admitted provided the delay is justified.
The new Bangladesh Act has provided a safeguard mechanism against the
arbitral tribunal’s decision on jurisdictional issues by providing the parties with a
recourse to the High Court Division of the Supreme Court for the determination of
the issues. Under Section 20 of the Act, the High Court Division may determine
any question as to the jurisdiction of the arbitral tribunal: (i) on the application of
any of the parties to the arbitration agreement; and also (ii) after serving notice
upon all other parties.78 It is thus clear that the High Court Division cannot decide
such jurisdictional questions of its own volition. However, before the High Court
Division takes into account any application on the matter it must be satisfied that:
(a) the determination of the question is likely to produce substantial savings in
costs; (b) the application was submitted without any delay; and (c) there is good
reason why the matter should be decided by the Court.79 Furthermore, the
application is required to state the reasons on which the matter should be decided
by the High Court Division.80 Section 20 of the Act still preserves the arbitral
tribunal’s authority to continue with the arbitration, despite such application to the
High Court division, in order to expedite the dispute settlement process. This is to
minimize the delay by judicial intervention and to leave the parties to make up
their minds as to what they want in the circumstances. Section 20(4) thus
provides: “Unless otherwise agreed by the parties, where any application is
pending before the High Court Division under this section, the arbitral tribunal
shall continue arbitration proceedings and make an award.” It is noteworthy that
Section 20 of the new Bangladesh Act has followed, in essence, Section 32 of the
English Arbitration Act 1996. The Indian Act, 1996 has left no half-way-house
arrangement against the arbitral tribunal’s decision on the jurisdictional issues.
Once the arbitral tribunal decides against a party’s plea against its jurisdiction, the
party has no other option open to him but to wait until the arbitral tribunal makes
an award. The party aggrieved by such an arbitral award may make an application
for setting aside such an arbitral award in accordance with Section 34 of the
Indian Act 1996 which deals with setting aside an arbitral award. It is
understandable that in order to minimize judicial intervention on the jurisdictional
issues the Indian Act has allowed the arbitral tribunal to continue with the arbitral
proceedings and make an award and the party aggrieved by the award to apply to
the competent court for setting it aside. Although this approach may have
blessings for expeditious dispute resolution, it may also have a sinister effect if the
arbitral award is set aside at the end of the day. The setting aside of the arbitral
77
78
Id. at Sec. 20(1).
79
Id. at Sec. 20(2).
80
Id. at Sec. 20(3).
award at that stage on the jurisdictional issues would mean the waste of the
parties’ time and money and other resources which could have been avoided at the
very initial stage of arbitration. This approach of the Indian Act 1996 has naturally
attracted scholarly criticism.81 However, it should be mentioned that India is not
alone in this league. There are countries where an approach similar to that of India
is already in currency.82
Under the English Arbitration Act 1996 an appeal from the decision of the
court on the jurisdictional issues lies only with leave of the court.83 The Model
Law leaves no option for appeal available from the competent court’s decision
concerning such jurisdictional questions as it expressly negates such an option.84
The new Bangladesh Act is, however, silent on the matter which means that the
Act does not endorse such an appeal.85
It is noteworthy that none of the regimes mentioned above, i.e. the Model
Law, English Act 1996, or Bangladesh Act,2001, deals with the situation when the
arbitral tribunal declares that it lacks jurisdiction to decide the dispute. In the
circumstances there may be various possibilities of remedy which the legislature
may opt for in express terms, such as putting an end to the arbitration and reviving
the jurisdiction of the court on the dispute, or ordering the same arbitral tribunal to
continue the arbitration or allowing the constitution of a new arbitral tribunal to
settle the dispute in case a competent court rejects the arbitral tribunal’s initial
decision that it lacked jurisdiction on the matter.
VII. INTERIM MEASURES : THE ARBITRAL TRIBUNAL

& THE COURT
The new Bangladesh Act provides in more detail the power of the arbitral
tribunal to order interim measures86 than do the Model Law87 and the Indian 1996
Act.88 In fact, the latter two laws contain identical provisions. No doubt, like the
Indian 1996 Act, the new Bangladesh Act adopts the Model Law provision on the
matter, but it includes some added features such as the requirement of notification
to the other parties involved and application to a court for enforcement of an
arbitral tribunal’s order of interim measures.89 In all the aforementioned regimes
81
See Vikram Raghavan, New Horizons for Alternative Dispute Resolution in India :
The New Arbitration Law of 1996, 13(4) J.INT’L ARB. 5, 33 (1996).
82
For example, France, The Netherlands, Spain, Switzerland, Korea and Japan.
83
English Arbitration Act 1996, Sec. 32(5).
84
The UNCITRAL Model Law, Art. 16(3).
85
See the Act, Sec. 20.
86
Id. at Sec. 21.
87
The UNCITRAL Model Law, Art. 17.
88
89
party autonomy is paramount in the matter of interim measures in that the parties
can bypass the arbitral tribunal and have recourse directly to the court for interim
measures. Thus, the new Act allows the arbitral tribunal, unless otherwise agreed
by the parties, to order a party to take any interim measure of protection as it may
consider necessary in respect of the subject matter of the dispute and at the same
time allows no appeal to be taken against such order.90 As a matter of practical
exigency, along the lines of modern international arbitral practice,91 the new Act
also provides that the arbitral tribunal may require a party, usually the requesting
party, to provide requisite security in connection with such a measure ordered by
the arbitral tribunal.92 Such interim measures may be required to be enforced by
the court, in which case the party requesting such measures should apply to the
court.93
It has to be mentioned that the provisions concerning interim measures
ordered by the arbitral tribunal in all the three regimes, such as the new
Bangladesh Act, the Indian Act and the Model Law are toothless because such
orders are not enforceable alone as a decree or order of a court. It is noteworthy
that neither the Indian Act 1996 nor the Model Law clarifies the nature of
enforceability of the interim measures ordered by the arbitral tribunal. The new
Bangladesh Act specifically provides for the need of court assistance for the
enforcement of such orders – a fact that is, however, implied in the Model Law
and the Indian Act.
There seems to be a trend in some international instruments and in quite a few
recent national arbitration laws to ensure enforcement of an order of interim
measure in various ways: (i) by establishing such interim measures in the form of
an interim award;94 (ii) by treating such orders as an award;95 or (iii) by making
applicable the Model Law Chapter VIII provisions (Arts. 35 and 36) that concern
recognition and enforcement of awards to the orders of interim measures.96
The question may arise whether a Bangladesh court could enforce interim
measures ordered by an arbitral tribunal sitting abroad. If the interim measure is
merely in the form of an order and not an award, the answer according to Section
3(1) of the new Act will be in the negative. The new Act applies when the place of
90
Id. at Sec. 21(1).
91
See generally Claude Remond, Security For Costs in International Arbitration, 110
L.Q.REV. 501 (1994).
92
The Act, Sec. 21(2); UNCITRAL Model Law, Art. 17.
93
94
The UNCITRAL ARBITRATION RULES (1976), Art. 26(2).
95
The Arbitration Act (Scotland), Art. 19(2); International Commercial Arbitration
Act (Ontario), Sec. 9; ICC ARBITRATION RULES (1998), Art. 23(1).
96
Arbitration Act, 1996 (New Zealand), Art. 17(2); International Arbitration Act
(Australia), Sec. 23, Optional Provisions; International Conciliation and Arbitration Act,
1993 (Bermuda), Sec. 26.
arbitration is in Bangladesh.97 Despite the fact that either of the parties to the
arbitration agreement may be based in Bangladesh and is a Bangladeshi national,
or the subject matter of the arbitration agreement or the subject matter of the
dispute may be situated in Bangladesh, Section 21 of the new Act concerning
“interim measures ordered by arbitral tribunal” is not applicable if the place of
arbitration happens to be outside Bangladesh. The same applies to a similar
situation under the Indian Act,98 though practice in some countries may be found
to be different in this regard. Thus, in Hong Kong,99 England, Wales or Northern
Ireland the courts are prepared, though with some caution, to order interim
measures in relation to arbitral proceedings taking place abroad, or even in cases
where no seat of arbitration has been designated or determined.100
However, there does not seem to be a problem for a Bangladesh court to
enforce an order of interim measure issued in the form of an award under the
applicable arbitration rule, e.g. under Article 23(1) of the 1998 ICC Arbitration
Rules,101 rendered by an arbitral tribunal sitting abroad.102 If such an award is
treated as a foreign award, according to Section 3(2) of the new Act, Sections 45,
46 and 47 of that Act that deal with recognition and enforcement of certain foreign
arbitral awards are applicable to it.
It is noteworthy that unlike the Model Law103 and the Indian Act, 1996,104 the
new Bangladesh Act does not contain any provision for interim measures by the
97
The Act, Sec. 3(1).
98
See Kitechnology NV v. Unicor GmbH Rahn Plastmaschinen, [1998] Delhi
Reported Judgments 397; Seagram Co. Ltd. v. Keventer Agro Ltd. APO No. 498 of 1997,
order dated 27 January 1998; Keventer Agro Ltd. v. Seagram Company Ltd., Civil Appeal
Number 1125 and 1126 of 1998, order dated 23 April 1998; East Coast Shipping Ltd. v.
MJ Scrap Pvt. Ltd., (1997) (1) CHN 444.
But cf. Dominant Offset Pvt. v. Adamovske Strojirny a.s., per Sharma, J., [1997]
Delhi Reported Judgments 313, also Arb.L.R. 335; Suzuki Motor Corporation v. Union of
India ,1997 (2) Arb.L.R. 477.
See generally, P. Ramaswamy, Interim Measures of Protection under the Indian
Arbitration and Conciliation Act 1996, 15 ARB. INT’L 399 ( 1999); Dushyant A. Dave,
Availability of Interim Relief in Respect of International Arbitration, ICCA
INTERNATIONAL ARBITRATION CONFERENCE PAPERS, CONGRESS SERIES NO. 10, at 138;
Lira Goswami, Interim Reliefs: The Role of Courts, in id. at 111.
99
The Lady Muriel, [1995] 2 H.K.C. 320; Houston Christine Marie v. Tasa
International (unreported, 1997, No. A10623).
100
English Arbitration Act 1996, Sec. 2(3)(b).
101
“Any such measure [interim or conservatory] shall take the form of an order,
giving reasons, or of an Award, as the Arbitral Tribunal considers appropriate.”
102
But see the view of the Supreme Court of India in a recent case, i.e. Bhatia
International v. Bulk Trading, (2002) 4 SCC 105, para. 34, p.124.
103
See UNCITRAL Model Law, Art. 9.
104
See Indian Act, Sec. 9.
court. This is a marked weakness of the new Act as far as it relates to the
protection of parties who intend to arbitrate in Bangladesh. Even before the
constitution of the arbitral tribunal or the commencement of arbitral proceedings,
situations or circumstances might warrant interim measures to be taken by the
court to protect the interest of a party, otherwise the whole purpose of such
arbitration will be frustrated. If there is no statutory obligation to offer such
protection, the court may not take an interest in it.105
It is now a well-established trend in international arbitration law and practice
that recourse to a judicial authority for interim measures or for the implementation
of any such measures ordered by an arbitral tribunal is not deemed to be an
infringement of the parties’ agreement to arbitrate or a waiver of the right to
arbitrate.106 It is desirable that in order to remedy this loophole in the new law on
arbitration the Bangladesh Parliament should make specific provision on the
matter by an amendment to the Act in the very near future. In this context it
should be noted that under the Model Law the scope of the authority of the court
and that of the arbitral tribunal to order interim measures are not the same. Such
authority of the arbitral tribunal is restricted to “the subject-matter of the dispute,”
whereas the court’s authority is rather open-ended and not restricted as such. The
Model Law does not provide any solution to any conflict between the court and
the arbitral tribunal concerning the grant of interim relief that may arise from the
variance of authority on the matter between them. Rather, the Model Law leaves
105
The classic example of such a situation may be the Channel Tunnel case, Channel
Tunnel Group Ltd. v. Balfour Beatty Const. Ltd., [1992] 1 Q.B. 656, 656 (Eng. CA), also
Channel Tunnel, 1993 App.Cas. 334, 367, where the English Court of Appeal considered
“it an appropriate case for an injunction, but thought that it had no power to grant one
because of the arbitration agreement. The House of Lords considered that it did have the
power to grant an injunction, but thought it inappropriate to do so.” Thus “[t]he Channel
Tunnel case illustrates very plainly the dilemma facing a party who seeks interim relief
but lacks an arbitral tribunal from which to seek it.” D. Alan Redfern, Arbitration and the
Courts : Interim Measures of Protection – Is the Tide About to Turn? 30 TEX. INT’L L.J.
71, 85 (1995). See also the judgment of the U.S. Court of Appeals for the Third Circuit in
McCreary Tire & Rubber Co. v. Ceat S.p.A., 501 F.2d 1032 (3d Cir. 1974).
See generally David E. Wagnor, Interim Relief in International Arbitration:
Enforcement is a Substantial Problem, 51 DISP. RES. J. 68, 71 (Oct. 1996).
106
See, e.g., the INTERNATIONAL CHAMBER OF COMMERCE (ICC) RULES OF
ARBITRATION (1998), Art. 23(2); the AMERICAN ARBITRATION ASSOCIATION (AAA)
INTERNATIONAL ARBITRATION RULES (2001), Art. 21(3); the UNCITRAL ARBITRATION
RULES (1976), Art. 26(3); the WORLD INTELLECTUAL PROPERTY ORGANIZATION
ARBITRATION RULES (1994), Art. 46(d); the UNCITRAL MODEL LAW (1985), Art. 9. See
generally Grégorie Marchac, Interim Measures in International Commercial Arbitration
Under the ICC, AAA, LCIA and UNCITRAL Rules, 10 AM. REV. INT’L ARB. 123 (1999);
see also Martindale-Hubbell – International Dispute Resolution Directory [2002]
(LexisNexis), for the relevant information.
the matter to be attended to by each State of its own volition.107 It is desirable that
the modern arbitration law of a country should demarcate the boundaries of
authority between the court and the arbitral tribunal, though it is not always easy
to do so.108 Thus, one scholar notes, “As powers to grant interim measures are
shared between arbitral tribunals and domestic courts, it seems necessary to draw
boundaries between their respective areas of competence and to address the issue
of the enforcement of such measures.”109
It is noteworthy that although the Model Law and the Indian Act, 1996 have
made provision for recourse to the court for interim measures of protection even
before the commencement of arbitral proceedings as a matter of practical
exigency, there is no specific obligation imposed on the party in whose favor the
interim measure has been granted, to take effective steps for the appointment of
the arbitral tribunal in a specific time frame, i.e. “the locking period.” In the
absence of such specific obligations and requirements the beneficiary of the
interim measures may resort to dilatory tactics to commence arbitral proceedings
at the expense of the other party to the dispute. Thus it is necessary to prevent the
abuse of interim measures before the commencement of arbitral proceedings. In
future amendments to the Bangladesh Arbitration Act, 2001, this and other
pertinent issues concerning interim measures as mentioned above should be
carefully considered.
Further, in the context of the provision concerning interim measures in the
new Bangladesh Act, it begs the question whether the arbitral tribunal is
empowered to grant “interim measures” that are in the nature of a “Mareva
injunction”110 or “Anton Piller order”111 as are well-known in English civil
107
UNCITRAL Report, para. 169. See ARON BROCHES, supra note 64, at page 90.
108
See generally Lord Mustill, Comments and Conclusions, in CONSERVATORY AND
PROVISIONAL MEASURES IN INTERNATIONAL ARBITRATION 118,119 (ICC International
Court of Arbitration ed., 1993); Redfern, supra note 105 at 74-77; Charles N. Brower &
W. Michael Tupman, Court-Ordered Provisional Measures Under The New York
Convention, 80 AM. J. INT’L L. 24 (1986).
109
Marchac supra note 106 at 125-26.
110
First developed by the English courts, named after Mareva Compania Naviera SA
v. International Bulkcarriers SA; The Mareva, [1975] 2 Lloyd’s Rep. 509, CA; see also
Nippon Yusen Kaisha v. Karageorgis, [1975] 1 W.L.R. 1093, CA. The injunction is
intended to prevent a defendant from frustrating the satisfaction of a monetary judgment
that the plaintiff may obtain against him. Lord Denning said that the Mareva injunction is
“the greatest piece of judicial law reform in my time.” See generally STEVEN GEE,
MAREVA INJUNCTIONS AND ANTON PILLAR RELIEF (4th ed. 1997); MARK HOYLE, THE
MAREVA INJUNCTION AND RELATED ORDERS (3rd ed. 1997); ATTACKING FOREIGN ASSETS,
(Dennis Campbell ed., 1992) (reporting on the availability of Mareva injunctions in
Australia, Hong Kong, New Zealand, Canada, Israel, the Cayman Islands, Ireland,
procedural law.112 Under the Indian Act the same question is also pertinent. Under
both the Bangladesh and Indian Acts the arbitral tribunal’s power to order
measures is restricted to the subject matter of the dispute and the parties to the
arbitration agreement. This means that the arbitral tribunal cannot compel any
third party to do or refrain from doing something as the English courts can in the
context of a Mareva injunction or an Anton Piller order. However, in the wake of
the modernization of international arbitration law, arbitral tribunals should be
empowered to grant Mareva and Anton Piller types of relief against a third party
as an exception to the rule of privity of the arbitration agreement. It is expected
that debate on the issue will continue globally, as well as in Bangladesh, in the
years to come.
VIII. PARTIES’ OPTION FOR MEDIATION OR CONCILIATION IN

ARBITRATION PROCEEDINGS
Section 22(1) of the new Bangladesh Act manifests a typical Asian approach to
dispute resolution.113 It provides, “It shall not be incompatible with an arbitration
agreement for an arbitral tribunal to encourage settlement of the dispute otherwise
than by arbitration and, with the agreement of all the parties, the arbitral tribunal
may use mediation, conciliation or any other procedures at any time during the
arbitral proceedings to encourage settlement.”114 Thus, the encouragement of
settlement between the parties is the main thrust of the provision, and is the role of
the arbitral tribunal. The new Act also provides: “If, during arbitral proceedings, the
parties settle the dispute, the arbitral tribunal shall, if requested by the parties, record
England, and Wales). Peter Devonshire, The Implications of Third Parties Holding Assets
Subject to a Mareva Injunction, 1996 L.M.C.L. Q. Part 2 at 268 (May 1996).
It is noteworthy that the Mareva injunction is now renamed “freezing injunction” in
the Civil Procedure Rules, Part 25 (1)(f). The Civil Procedure Rules came into force on
April 26, 1999.
111
Named after Anton Piller KG v. Manufacturing Processes Ltd., [1976] Ch.55. This
is an order requiring a party to admit another party onto the premises for the purposes of
preserving evidence and property. In English law a statutory basis for the jurisdiction is
now provided for in Section 7 of the Civil Procedure Act 1997.
112
Originally, case-law based and now statutorily prescribed in The Civil Procedure
Rules (CPR), Part 25 (1)(f) and the Civil Procedure Act 1997, Sec. 7 & CPR, Part 25;
para.7.1 of the accompanying Practice Direction.
113
See generally A. F. M. Maniruzzaman, International Commercial Arbitration in
the Asia-Pacific: Asian Values, Culture and Context, 30 INT’L BUSINESS LAWYER 508
(December 2002); A.F.M. Maniruzzaman, The Problems and Challenges Facing
Settlement of International Energy Disputes by ADR Methods in Asia: The Way Forward,
2003(6) INT’L ENERGY LAW AND TAXATION REVIEW 193.
114
Emphasis added.
the settlement in the form of an award on agreed terms.”115 The new Act does not
distinguish between such an award on agreed terms and any other award in respect of
the dispute in terms of status and effect.116 In many other Asian countries the
combination of conciliation/mediation and arbitration in the same proceeding subject,
of course, to the parties’ consent, seems to be a common trend. Thus Article 45 of the
China International Economic and Trade Arbitration Commission (“CIETAC”)
Arbitration Rules117 provides, “If both parties have a desire for conciliation or one
party so desires and the other party agrees to it when consulted by the arbitration
tribunal, the arbitration tribunal may conciliate the case under its cognizance in the
process of arbitration.” The CIETAC Arbitration Rules allow the arbitral tribunal to
render the settlement reached through conciliation in the course of arbitral
proceedings as an arbitral award.118 Similar provisions are found in the Hong Kong
Arbitration Ordinance of 1996,119 Singapore International Arbitration Act of 1995,120
and the Indian Arbitration and Conciliation Act of 1996.121 It is noteworthy that in
some of the aforementioned laws of various countries the same approach applies to
both domestic and international arbitration.
IX. CONDUCT OF THE ARBITRAL PROCEEDINGS
In the conduct of arbitral proceedings the new Bangladesh Act has endorsed
certain principles of natural justice which are common to other modern
arbitration laws elsewhere, not just the UNCITRAL Model Law. These include
the duty of the arbitral tribunal to deal with a dispute fairly and impartially by: (i)
giving each party a reasonable opportunity to present its case orally or in writing,
or both, and (ii) giving each party a reasonable opportunity to examine all the
documents and other relevant materials filed by the other party or any other
person concerned before the tribunal.122 However, one may wonder whether
“reasonable opportunity” equals “equal opportunity.” Thus, on this point the
provision of the Bangladesh Arbitration Act, 2001 differs from that of the
UNCITRAL Model Law. Article 18 of the Model Law provides: “The parties
shall be treated with equality and each party shall be given a full opportunity of
presenting his case.” The concept of “reasonable opportunity” instead of “equal
opportunity” in the context concerned in the new Bangladesh Act seems to have
115
116
Id. at Sec. 22(4).
117
As revised and adopted on September 5, 2000 and effective as of October 1, 2000.
Available at http://www.cietac.org.cn/ENGLISH/E_cd4/E_fr_6.htm.
118
CIETAC ARBITRATION RULES, Art. 49.
119
Hong Kong Arbitration Ordinance, Secs. 2A(2) and 2B.
120
Singapore International Arbitration Act, Secs. 16 and 17.
121
122
The Act, Sec. 23(1)(a), (b).
been borrowed from the English Arbitration Act 1996.123 According to the
Bangladesh Arbitration Act, 2001, the reasonableness of the opportunity has to
be decided as a matter of expediency by the arbitral tribunal having regard to all
the surrounding circumstances in a particular context. In this respect though, the
guiding principles for the arbitral tribunal should be fairness and impartiality.
Such principles are also required of the arbitral tribunal in deciding procedure
and evidence and in exercising other powers conferred on it.124
In procedural matters the arbitral tribunal is allowed some flexibility and
freedom and is not bound to follow the provisions of the Bangladesh Code of
Civil Procedure, 1908 or the Bangladesh Evidence Act, 1872.125 On the question
of the determination of rules of procedure, the Bangladesh Arbitration Act
endorses126 the fundamental principle of the parties’ freedom to choose such rules
and, failing such choice by the parties, the arbitral tribunal’s freedom as
enshrined in the Model Law. However, following the English Arbitration Act
1996,127 the Bangladesh Act has gone beyond the Model Law prescription on the
matter, in that it enumerates objectively certain aspects of procedural and
evidential matters, which include (a) time and place of holding the proceedings
either in whole or in part; (b) language of the proceedings and to supply
translation of a document concerned; (c) written statement of claim, specimen
copy of defense, time of submission and range of amendment; (d) publication of
document and presentation thereof; (e) the questions asked of the parties and the
replies thereof; (f) written or oral evidence as to the admissibility, relevance and
weight of any materials; (g) power of the arbitral tribunal in examining the issues
of fact and of law; and (h) submission or presentation of oral or documentary
evidence. The list is not exhaustive and is but a reminder of certain obvious
procedural and evidentiary matters serving as a road map in the procedural
journey of the arbitral tribunal. The provisions of the Bangladesh Act on matters
such as “place of arbitration,”128 “statements of claim and defense,”129 and
“hearings and proceedings”130 are taken verbatim from the Model law. Similarly,
on other procedural matters such as “consolidation of proceedings and concurrent
hearings,”131 “legal or other representation,”132 “power to appoint experts, legal
123
See English Arbitration Act 1996, Sec. 33(1)(a).
124
125
Bangladesh Evidence Act, 1872, Sec. 24.
126
In Sec. 25.
127
English Arbitration Act 1996, Sec. 34.
128
The Act, Sec. 26.
129
Id. at Sec. 29.
130
Id. at Sec. 30.
131
Id. at Sec. 28.
132
Id. at Sec. 31.
advisors or assessors,”133 and “powers of the arbitral tribunal in case of default of

the parties,”134 the new Bangladesh Act has followed verbatim the provisions of
the English Arbitration Act 1996.
X. ARBITRAL AWARD AND THE TERMINATION OF PROCEEDINGS
Chapter VII of the Bangladesh Act deals with the rules applicable to the
merits of the dispute, decision-making by the panel of arbitrators, form and
contents of the award, decision on costs, finality and binding nature of the
arbitral award, correction and interpretation of awards, and termination of
proceedings. It has to be noted that although the Bangladesh Act followed in this
chapter Articles 28, 29, 31, 32 and 33 of the UNCITRAL Model Law, it has
deviated in some respects from the Model Law provisions and introduced some
innovation and added new provisions. These deviations, innovations and
additions are not surprising as they are in keeping with the post-Model Law
recent developments in the field of international arbitration.
Like the UNCITRAL Model Law,135 the new Bangladesh Act upholds party
autonomy or the parties’ freedom of choice and allows the parties to choose any
rules of law, not necessarily the law or the legal system of the country whose law
is applicable to the substance of the dispute.136 This choice is so expansive that
the parties can choose the lex mercatoria or the rules of transnational commercial
law, rules of specific international trade or anything which is not
characteristically the legal system of a particular country.137 It further provides
that if the law or the legal system of a country is designated by the parties, such
designated law is meant to refer directly to the substantive law of that country
and not to its conflict of laws rules. Like the UNCITRAL Model Law,138 the
Act139 thus expressly avoids the renvoi situation.
However, unlike the Model Law, the new Bangladesh Act allows the arbitral
tribunal, in the absence of the parties’ choice of applicable substantive law, the
freedom to apply any rules of law as it objectively deems appropriate in the
circumstances of the dispute.140 Thus in the absence of the parties’ choice the
arbitral tribunal is no longer required to have recourse to the applicable conflict
133
Id. at Sec. 32.
134
Id. at Sec. 35.
135
The Model Law, Art. 28(1).
136
137
See generally, A.F.M. Maniruzzaman, The Lex Mercatoria and International
Contracts: A Challenge for International Commercial Arbitration?, 14(3) AM. U. INT’L
L. REV. 657, 697-705 (1999).
138
139
140
Id. at Sec. 36 (2).
of laws rules as under the Model Law141 to determine the applicable substantive
law. It should be noted that this prescription reflects the recent trend in many
international institutional arbitration rules142 as well as in some national
legislative enactments on international commercial arbitration.143 It is striking
that unlike the Model Law,144 the Bangladesh Act makes no provision on the
matter of the arbitral tribunal’s authority to decide ex aequo et bono or as
amiable compositeur,145 nor does it expressly prohibit such authority. This means
that if the parties to a dispute refer to international institutional arbitration rules,
for example, the ICC Arbitration Rules (1998),146 which provide for the arbitral
tribunal’s authority as such (of course, provided the parties have expressly
authorized it to do so), the arbitral tribunal having its seat in Bangladesh will
have no problem deciding ex aequo et bono or as amiable compositeur. As under
the Model Law,147 the tribunal is also mandatorily required under the new
Bangladesh Act148 to decide in accordance with the terms of the contract and to
take into account the usages of the trade applicable to the transaction. However,
unlike the Model Law, the Act expressly states the purpose of this specific
requirement to be the “ends of justice.” But the question still remains – if justice
is done otherwise, would this requirement be superfluous? It is noteworthy that
the Act does not say expressly that this requirement is to obtain “in all cases” as
does the Model Law.149 The upshot may be that if justice is done somehow, there
is perhaps no need to fulfill the requirement by the arbitral tribunal, hence the
omission of the phrase “in all cases” in the relevant provision of the new
Bangladesh Act.150
The Act preserves the rule of decision-making by the majority, unless
otherwise agreed by the parties, in arbitral proceedings before a multi-arbitrator
arbitral tribunal.151 The Act also provides that if authorized by the parties or all the
members of the arbitral tribunal, questions of procedure may be decided by the
141
142
See, e.g., ICC ARBITRATION RULES (1998), Art. 17(1); WIPO ARBITRATION RULES
(1994), Art. 59(a).
143
See, e.g., the Indian Act, Sec. 28(1)(b)(iii); Swiss Private International Law
(PILA), Art. 187(1) [Swiss Arbitration Act, i.e. Chapter 12 of PILA]; Netherlands
Arbitration Act 1986, Art. 1054(2).
144
145
See A.F.M. Maniruzzaman, The Arbitrator’s Prudence in Lex Mercatoria: Amiable
Composition and Ex Aequo et Bono in Decision Making, 18(12) INT’L ARB. REP. (2003).
146
See ICC RULES, Art. 17(3).
147
148
149
150
151
Id. at Sec. 37(1).
chairman of the arbitral tribunal. The Act incorporates the Model Law provisions
on the matters.152 What the Act does not deal with, nor does the Model Law, is the
issue of decision-making by a truncated tribunal153 or of its authority. There seems
to be an increasing tendency to deal with this issue in modern arbitration rules,
however.154
On various other matters as mentioned earlier such as form and contents of the
award,155 termination of proceedings,156 correction and interpretation of the award
and additional award,157 the new Bangladesh Act has almost identical provisions
to that of the Model Law. However, unlike the Model Law, the new Bangladesh
Act, in tune with pragmatic developments elsewhere,158 expressly provides for the
authority of the arbitral tribunal to decide on the costs of the arbitration unless the
parties agree otherwise.159 In this respect, the new Bangladesh Act follows the
similar provisions adopted by the Indian Arbitration and Conciliation Act 1996.160
The only difference between the relevant provisions of these two Acts concerns
the interest rate from the date of the award to the date of payment. Thus the
Bangladesh Act provides : “A sum directed to be paid by an arbitral award shall,
unless the award otherwise directs, carry interest at the rate of two percent per
annum which is more than the usual Bank rate from the date of the award to the
date of payment.”161 The Indian Act provides for interest at the rate of eighteen
152
The Model Law, Art. 29.
153
This means an arbitral tribunal where an arbitrator abstains from participating in
the tribunal’s proceedings, whether on his own initiative or on the instructions of his
government or principal, whether or not accompanied by resignation. An arbitral tribunal
may also be truncated where a nationally or party-appointed arbitrator dies or is
incapacitated, and his government or principal takes advantage of the situation to
withdraw, in effect, by failing to replace him. See STEPHEN M. SCHWEBEL,
INTERNATIONAL ARBITRATION: THREE SALIENT PROBLEMS, Chap. III, at 144 (1987). See
also V.V. Veeder, The Natural Limit to the Truncated Tribunal: The German Case of
Soviet Eggs and the Dutch Abduction of the Indonesian Arbitrator, in Law of International
Business And Dispute Settlement In The 21st Century: Liber Amicorum Karl-Heinz
Böckstiegel 795 (Robert Briner, L. Yves Fortier, Klaus Peter Berger & Jens Bredow eds.,
2001).
154
LCIA RULES, Art. 12; ICC RULES, Art. 12(5); WIPO ARBITRATION RULES (1994),
Art. 35; AAA INTERNATIONAL ARBITRATION RULES, Art. 11; RULES OF PROCEDURE OF
THE INTER-AMERICAN COMMERCIAL ARBITRATION COMMISSION (2002), Art. 10;
SCOTTISH ARBITRATION CODE, Art. 7.
155
The Act, Sec. 38; Model Law, Art.31.
156
157
158
See, e.g., The German Arbitration Act (1998), Sec. 1057.
159
160
The Indian Act, Sec. 31(7) and (8).
161
The Act, Sec. 38(6)(b).
percent per annum.162 Both Acts provide in identical provisions163 that, unless the
parties agree otherwise, the arbitral tribunal shall fix the costs of an arbitration and
also specify (i) the party entitled to costs; (ii) the party who shall pay the costs;
(iii) the amount of costs or method of determining that amount; and (iv) the
manner in which the costs shall be paid.
XI. RECOURSE AGAINST THE ARBITRAL AWARD
The new Bangladesh Act deals in the same chapter (i.e. chapter VIII)164 with
recourse against both domestic arbitral awards and awards made in international
commercial arbitration held in Bangladesh. However, for domestic awards
recourse may be had to set aside the award to the court within the local limits of
whose jurisdiction the arbitral award has been finally made and signed165 and for
awards made in international commercial arbitration to the High Court Division of
the Supreme Court of Bangladesh. In both cases such recourse may be had “on the
application of a party within sixty days from the receipt of the award.”166 On this
point it differs from the Model Law which prescribes a three-month time limit
from the receipt of the award for such recourse.167 The Model Law also prescribes
that if a party requests under Article 33, i.e. for correction and/or interpretation of
an award, or an additional award, the three-month time limit will be counted from
the date on which that request is disposed of by the arbitral tribunal.
Unfortunately, the new Bangladesh Act has no express provision on time limit for
recourse in the latter case. However, it may be assumed, as it logically follows,
that under the new Bangladesh Act the sixty-day time limit will also apply to this
case after the request for correction, interpretation or an additional award under
Section 40 of the Act has been acted upon by the arbitral tribunal.
Section 43 of the Bangladesh Act enumerates certain grounds for setting aside
arbitral awards. It reproduces almost verbatim such grounds as enumerated for
setting aside arbitral awards in Article 36 of the Model Law, which in turn has
reproduced verbatim those provided for refusal of recognition or enforcement of
foreign arbitral awards in Article V of the New York Convention of 1958.168 Thus
the Model Law aligned its grounds for setting aside with the grounds for refusal of
recognition or enforcement of the New York Convention. In the context of the
162
The Indian Act, Sec. 31(7)(b).
163
The Indian Act, Sec. 31(8); the Act, Sec. 38(7).
164
The Act, Secs. 42–43.
165
Id. at Secs. 42(1) and 43 (Explanation).
166
Id. at Secs. 42(1) & (2).
167
168
The Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(Done at New York, June 10, 1958, entered into force, June 7, 1959. 330 U.N.T.S. 38, No.
4739 (1959)).
Draft text of the Model Law it was thus noted, “It recognizes the fact that both
provisions [i.e., Article 34(2) and Article 36(1)] with their different purposes (in
one case reasons for setting aside and in the other case grounds for refusing
recognition or enforcement) form part of the alternative defense system which
provides a party with the option of attacking the award or invoking the grounds
when recognition or enforcement is sought.”169 Undoubtedly, the Model Law
provides an improvement on the New York Convention 1958 on this matter. As
the latter has no provision on setting aside an arbitral award and the matter is left
to the arbitration law of the country of origin of the award, “the grounds for
refusal of enforcement of the Convention may indirectly be extended (i.e. under
Article V (1)(e) of the Convention) by the grounds for setting aside contained in
the arbitration law of the country of origin.”170 The New York Convention has
thus left open this floodgate of grounds for setting aside arbitral awards to be
compounded with those for refusal of recognition and enforcement creating an
uncertainty of the fate of an award. The Model Law thus attempts to harmonize
the grounds for setting aside and for recognition and enforcement of arbitral
awards. Although the Model Law enumerates the grounds for setting aside an
arbitral award as an exclusive list as evidenced by the use of the word “only” in its
Article 34(2), the Bangladesh Act omits the word. Nevertheless, since the Act
models its relevant provision on that of the Model Law, despite such an omission
the spirit of the latter should prevail. This means that Section 43(1) of the new
Bangladesh Act contains an exclusive list of limited grounds on which an award
may be set aside and no other ground should be entertained for such a purpose. It
is noteworthy that under Section 43(1)(a), as under Article 34(2) of the Model
Law, the grounds contended for setting aside may be examined by the court only
if the party invoking such ground furnishes proof to that effect. Whereas under
Section 43(1)(b) of the Act the grounds for setting aside of an arbitral award must
be examined by the court ex officio, once an application for setting aside has been
169
See Analytical Commentary on Draft Text of a Model Law on International
Commercial Arbitration (Report of the Secretary General, UNCITRAL, 18th Session,
Vienna, 3-21 June 1985 (A/CN.9/264, 25 March 1985), Chapter VII, para.8. Recently, the
Singapore High Court in Newspeed International Ltd. v. Citus Trading Pte Ltd. (June 4,
2001) favored only “one bite at the cherry” and no second bite. “It held that a party against
whom a New York Convention arbitration award has been made has the options of either
seeking to set aside the award in the country where the award was made, or opposing the
enforcement of the award in the country where the enforcement is sought, but these
options are “alternatives and are not cumulative” As such, there are “no two bites at the
cherry.” The Court of Appeal upheld the High Court’s decision as such in October 2001.”
Reported in Gordon Smith, Resisting Enforcement of a New York Convention Arbitration
Award, 2003 ASIAN D.R. 30(May).
170
ALBERT JAN VAN DEN BERG, THE NEW YORK ARBITRATION CONVENTION OF 1958:
TOWARDS A UNIFORM JUDICIAL INTERPRETATION 22(1981).
made. Thus, the list of the party-contended grounds includes lack of capacity of a
party to conclude the arbitration agreement; lack of a valid arbitration agreement;
lack of notice of appointment of an arbitrator or of arbitral proceedings or inability
of a party, for some reasonable cause, to present his case; the award deals with
matters not covered by the submission to arbitration; the composition of the
arbitral tribunal or conduct of the arbitral proceedings were contrary to the
effective agreement of parties or, in the absence of such agreement, to the new
Bangladesh Act. The grounds for setting aside to be examined by the court ex
officio include: non-arbitrability of the subject matter of the dispute under the law
at that time in force in Bangladesh; the award is in conflict with the public policy
of Bangladesh; the award is prima facie opposed to the law at that time in force in
Bangladesh; or the award has been induced or affected by fraud or corruption. It
should be noted that the last two grounds were added by the new Bangladesh Act
to the Model Law list. In effect, all the foregoing grounds are mainly public policy
and natural justice grounds. All the grounds are equally applicable to both
domestic and international arbitral awards and no distinction between them is
made in this respect. It remains to be seen whether the High Court Division of the
Supreme Court of Bangladesh, while considering the violation of rules of public
policy as grounds for setting aside arbitral awards, will be inclined to the narrower
criterion of international public policy or “truly international public policy” in the
case of foreign arbitral awards, following the recent trends elsewhere.171
As mentioned earlier, the list of grounds for setting aside an arbitral award
provided in Section 43 of the Act is exclusive. It then begs the question whether
the court has the power to set aside the award for “error of law or fact on the face
of the award” or when the award is in “manifest disregard of the law.” Could
those be implied defenses against the award? The Model Law has not expressly
enumerated these as grounds for setting aside an award, nor has the new
Bangladesh Act. It is clear that such court control over the merits of the award is
excluded under both the Model Law and the Act. The rationale for this position
may be explained as follows. Once the parties choose the arbitrator as the sole and
final judge of their dispute, they are bound to accept his decision as final and
conclusive irrespective of its being erroneous, either on the facts or on the law,
since they have initially entrusted him with the authority to settle their dispute and
171
See generally, Pierre Lalive, Transnational (or Truly International) Public Policy
and International Arbitration, in COMPARATIVE ARBITRATION PRACTICE AND PUBLIC
POLICY IN ARBITRATION 257 (Pieter Sanders, gen. ed,. 1987). LOTFI CHEDLEY,
ARBITRAGE COMMERCIAL INTERNATIONAL & ORDRE PUBLIC TRANSNATIONAL (Centre de
Publication Universitaire, Tunis, 2002; Audley Sheppard & Nagla Nassar, Co-
Rapporteurs, Final Report on Public Policy as a Bar to Enforcement of International
Arbitral Awards, in INT’L LAW ASS’N COMMITTEE ON INTERNATIONAL COMMERCIAL
ARBITRATION, PROCEEDINGS OF NEW DELHI CONF. (2002); Cf. Oil & Gas Co. Ltd. v. Saw
Pipes Ltd. (Sup. Ct. India, April 17, 2003), [2003] INT. A.L.R. N-35.
have expressed confidence in him to do so. Otherwise, a simple error of fact or

law in the arbitral award will undermine the parties’ efforts to settle their dispute
by arbitration by catapulting them into litigation that they initially wanted to
avoid.
It should be noted that both the Model Law and the new Bangladesh Act are
silent on the issue of what happens when an arbitral award has been set aside by
the court.172 The dispute will, however, remain unresolved after the arbitral award
has been set aside. The question still remains whether the dispute should be
referred to the court, or the parties are still bound by their arbitration agreement to
refer the dispute to arbitration again if the arbitral award has been set aside on
grounds other than the absence of a valid arbitration agreement. Unlike the Model
Law,173 the new Bangladesh Act remains silent on whether to give the arbitral
tribunal an opportunity to eliminate the grounds for setting aside the arbitral award
either by resuming the arbitral proceedings or any other way that the tribunal
considers suitable. The new Bangladesh Act, however, unlike the Model Law,
introduces a safeguard against the move to set aside either domestic or
international awards. The Act authorizes the court, where the application for
setting aside an award is made, to order that any money payable by the award be
deposited with that court, or otherwise secured, pending the determination of the
application.174 This safeguard will be a deterrent to the losing party’s playing
prank with the arbitral award and it also will save the court’s valuable time.
XII. ENFORCEMENT AND RECOGNITION OF AWARDS
The new Bangladesh Act deals with the enforcement of domestic and foreign
arbitral awards under Chapters IX and X respectively. Both domestic and foreign
arbitral awards are enforceable straight away under the Act without requiring the
fulfillment of any other conditions or formalities such as leave of the court for
enforcement, i.e. exequatur, or double exequatur, etc. Under the Act both
domestic and foreign arbitral awards are directly given the status of a decree of
the Court. In both cases the Act provides that the award “shall be enforced under
172
Cf. Article 78(5) of the Tunisia’s Arbitration Code of 1993; Article 830(2) Italy’s
arbitration law (1994 amendment); Article 1067 of the Netherland’s arbitration law of
1986 – where the issue has been dealt with. The Tenth Book of the German Code of Civil
Procedure (ZPO) contains the new German arbitration law (1998) which provides in
Section 1059(2)(5): “Setting aside the arbitral award shall, in the absence of indications to
the contrary, result in the arbitration agreement becoming operative again in respect of the
subject-matter of the dispute.”
173
174
the Code of Civil Procedure, in the same manner as if it were a decree of the
Court.”175
As far as the recognition and enforcement of foreign arbitral awards are
concerned, the new Bangladesh Act differs in some respects from the Model Law
as well as from the New York Convention. Concerning the rules about the
recognition and enforcement and about the grounds for refusing recognition or
enforcement of awards, the Model Law distinguishes between “international” and
“non-international” awards rather than between “domestic” and “foreign” arbitral
awards as traditional categories. It was noted that the grounds on which
recognition or enforcement may be refused under the Model Law “are relevant
not merely to foreign awards but to all awards rendered in international
commercial arbitration.”176 The recognition and enforcement regime of the
Model Law entertains an arbitral award “irrespective of the country in which it
was made”177 so long it is an international award. Although the New York
Convention distinguishes between foreign and domestic arbitral awards for the
application of the Convention to the former, it also applies to awards that are
domestic from the territoriality point of view in the sense that they are made in
the country of enforcement but are considered non-domestic in that country for
various other reasons.178 The new Bangladesh Act on the other hand, deals
exclusively with foreign awards in Chapter X under the title “Recognition and
Enforcement of Certain Foreign Arbitral Awards.” The title itself says it all. The
Act thus defines “foreign arbitral award” “as an award made in pursuance of an
arbitration agreement in the territory of any state other than Bangladesh, but it
does not include an award made in the territory of a specified state.”179 This is
175
Id. at Secs. 44 and 45(1)(b).
176
See Explanatory Note by the UNCITRAL Secretariat on the Model Law on
International Commercial Arbitration (A/CN.9/264), para. 50.
177
Arts. 35(1) and 36(1).
178
The Model Law, Article 1(1), the New York Convention, 1958. Thus in Alghanim
& Sons, W.L.L. v. Toys “R” US, Inc., 126 F.3d 15 (1997), the U.S. Court of Appeals for
the Second Circuit noted that the dispute giving rise to the appeal involved two non-
domestic parties and one United States corporation, and principally involved conduct and
contract performance in the Middle East. The Court considered on the basis of these facts
that the arbitral award was a non-domestic award and thus within the scope of the N.Y.
Convention, though the arbitral award was rendered in New York City under the rules of
the American Arbitration Association.
See generally, VAN DEN BERG, supra note 169 at 12-55.
On “international” arbitral awards and problems under the New York Convention
(1958), see STEPHEN J. TOOPE, MIXED INTERNATIONAL ARBITRATION 116-157(1990).
179
Emphasis added. Section 47 of the Bangladesh Act, 2001 provides:
irrespective of the lex arbitri under which the award was rendered whether it is
Bangladesh arbitration law or any foreign arbitration law. The new Bangladesh
Act endorses the territoriality principle in the context of recognition and
enforcement of foreign arbitral awards. Thus, the scope of the rules concerning
the recognition and enforcement of foreign arbitral awards in the new
Bangladesh Act is narrower than that in the Model Law and in the New York
Convention.
Before the enactment of the present legislation on arbitration (i.e. the 2001
Act) there existed no legal mechanism for enforcement of a foreign arbitral
award in Bangladesh. Although Bangladesh acceded to the New York
Convention on July 6, 1992, it has not yet enacted any enabling statute to give
effect to the Convention itself. Hence, Bangladesh Courts are very reluctant to
apply the New York Convention to the issues of recognition and enforcement of
foreign arbitral awards.180 However, the 2001 Act has incorporated the
mechanism of the New York Convention for the recognition and enforcement of
foreign arbitral awards in Chapter X. The Act reproduces in Section 46 the
grounds for refusing recognition or enforcement of foreign arbitral awards as
provided in Article V of the New York Convention. Subject to Section 46 of the
new Bangladesh Act, any foreign award which would be enforceable shall be
treated as binding for all purposes on the persons as between whom it was made,
any award may accordingly be relied upon by any of those persons by way of
defense, set off or otherwise in any legal proceedings in Bangladesh.181 The Act
also provides that a foreign arbitral award shall, on the application being made to
it by any party, be enforced by execution by the Court under the Code of Civil
Procedure of Bangladesh, in the same manner as if it were a decree of the
Court.182 It is noteworthy that the Court in this context (i.e. recognition and
enforcement of foreign arbitral award) is statutorily meant to be the District
Judge’s Court exercising the jurisdiction within the district of Dhaka.183 Whereas,
for the purpose of setting aside any arbitral award made in an international
commercial arbitration held in Bangladesh it is the High Court Division of the
Supreme Court of Bangladesh where the recourse may be had and not any other
court.184 More on this point later on. The Act requires,185 following Article IV of
the New York Convention and Article 35(2) of the Model Law, an application for
“…. the Government may, by notification in the official Gazette, declare a state
as a specified state.”
180
See Haji Azam v. Singleton Binda & Co., 27 DLR 583(1975); Bangladesh Air
Service (PVT) v. British Airways PLC, 49 DLR 187(AD) (1997).
181
The Act, Sec. 45 (1)(a).
182
Id. at Sec. 45 (1)(b).
183
Id. at Sec. 45 (Explanation).
184
Id. at Sec. 42 (2).
185
Id. at Sec. 45 (2)(a) and (b).
the execution of a foreign arbitral award to be accompanied by: (a) the original
arbitral award or a copy thereof, duly authenticated in the manner required by the
law of the country in which it was made; (b) the original agreement for
arbitration or a duly certified copy thereof. The Act, however, provided a further
requirement, which is found neither in the New York Convention nor in the
Model Law, that such application for execution shall also be accompanied by
such evidence as may be necessary to prove that the award is a foreign award.186
XIII. CONCLUDING REMARKS AND PERSPECTIVE
The foregoing examination of the new Bangladesh Act, 2001 from a

comparative perspective shows that the Bangladesh legal regime has embraced the
fundamental tenets of modernization of international arbitration such as (i) party
autonomy; (ii) minimal judicial intervention in arbitration; (iii) independence of
the arbitral tribunal; (iv) fair, expeditious and economical resolution of disputes
and (v) effective enforcement of arbitral awards. This modernization has also been
brought about in the context of domestic arbitration. Although the new Act is
principally based on the UNCITRAL Model Law, it has introduced certain
improvements on the Model Law prescriptions in certain respects as highlighted
above. As the new Act is now about three years old, it will be premature to
express any judgment on its efficacy as an arbitral legal regime and the impact it
will have in the future for Bangladesh as a place for settlement of international
commercial and investment disputes by arbitration. Certainly, Bangladesh, being a
prospective destination for increasing foreign investment in the future, has made a
positive step in the right direction by enacting the new law on arbitration.
Although Bangladesh, like her sub-continental counterparts, has historically a
long tradition of settlement of disputes by alternative methods – a phenomenon
that pervades her social fabrics for centuries – she can still improve her
international arbitral legal regime by incorporating, as it may be deemed
appropriate, lessons from various other jurisdictions187 in her efforts towards
modernization and internationalization of arbitration. No doubt, there is still room
for improvement in the Act itself as indicated above. It must be appreciated that in
186
Id. at Sec. 45 (2)(c ).
187
See generally, HENRI C. ALVAREZ, NEIL KAPLAN & DAVID W. RIVKIN, MODEL
LAW DECISIONS: CASES APPLYING THE UNCITRAL MODEL LAW ON INTERNATIONAL
COMMERCIAL ARBITRATION (1985-2001), (2003); PETER BINDER, INTERNATIONAL
COMMERCIAL ARBITRATION IN UNCITRAL MODEL LAW JURISDICTIONS (2000); PIETER
SANDERS, QUO VADIS ARBITRATION ? SIXTY YEARS OF ARBITRATION PRACTICE (1999);
HOWARD M. HOLTZMANN & JOSEPH E. NEUHAUS, A GUIDE TO THE UNCITRAL MODEL
LAW ON INTERNATIONAL COMMERCIAL ARBITRATION (1989); ARON BROCHES, A
COMMENTARY ON THE UNCITRAL MODEL LAW ON INTERNATIONAL COMMERCIAL
ARBITRATION (1990).
order to make Bangladesh an attractive place for much-needed foreign investment,

for economic growth and development, and for alternative dispute resolution (i.e.
ADR), it is not enough simply to enact a new law on arbitration, the Government
has to go a long way to achieve the stated purpose. Bangladesh needs more than a
mere piece of legislation on arbitration at the present time. The Government and
the judiciary, as well as the legal profession, must take initiatives and make
constant efforts towards the development of legal infrastructure and institution-
building in the field of alternative dispute resolution, including arbitration. In this
respect the following tentative suggestions may be worth considering:
(1) The efficacy of the Arbitration Act, 2001 depends, to a great extent,
on the attitude of the judiciary. When interpreting the new Act
Bangladesh courts should not be detracted from the spirit of
modernization of arbitration as a global phenomenon and should not
be guided by the 1940 Arbitration Act as a source of inspiration. Not
only the judiciary, but also the legal profession must change its
traditional mind-set developed under the old legal regime.
(2) The members of the judiciary as well as the legal profession must
appreciate the reality that in this era of globalization dispute
settlement by alternative methods is not only a domestic matter, but
also an increasingly growing international phenomenon in the context
of cross-border transactions. They have to be open to absorbing
international values, norms and principles while performing their
professional functions in the field of international dispute settlement,
otherwise their professionalism will prove moribund and will be
useless to the international business community.
(3) As noted above, the new Act authorizes the High Court Division to
set aside any arbitral award made in an international commercial
arbitration held in Bangladesh, whereas for recognition and
enforcement of foreign arbitral awards, it is the District Judge’s
Court, exercising jurisdiction within the district of Dhaka, that is
entrusted with responsibility. With this latter provision the Act seems
to have downplayed the importance of international arbitration for
which so much effort has been given to modernize the arbitration law
in Bangladesh. International commercial arbitration is a complex
matter. It involves expertise in public international law, private
international law and also knowledge of international commerce, law
and practice. One may wonder whether District Court Judges are
equipped with sufficient knowledge, expertise and training to handle
foreign arbitral awards that may very often involve complicated
international legal issues. It may be that the High Court Judges are
better placed to deal with the responsibility for enforcement of foreign
arbitral awards. It is desirable that this specific responsibility be given
to the High Court Division even if it means adjusting the Code of
Civil Procedure mutatis mutandis for this purpose.
(4) In due course, the need to create a specialist arbitration bench in the
High Court Division may arise for the purpose of dealing with
international arbitration matters more effectively and professionally.
Such a specialist bench may be constituted by appointing a certain
number of judges in the High Court Division with the appropriate
expertise and background in the field of arbitration. It may even mean
the relaxation of the constitutionally requisite qualifications and
experience for the appointment of judges in order to attract suitable
people for the positions.188 The constitution of a specialist bench in
the High Court Division would demonstrate the Government’s
seriousness in the matter of international arbitration. Such an
arrangement would command respect from the international business
community and create confidence in prospective parties to settle their
disputes in Bangladesh and to enforce any foreign arbitral awards
there. The Government has to consider seriously these matters in
order to promote arbitration in Bangladesh and make it an attractive
place for dispute resolution by arbitration.
(5) It is not enough to enact a piece of legislation on arbitration to effect

the modernization of arbitration law. The Government, the Bar and
the Bench must attend to the development of the culture of arbitration
in Bangladesh. Judges and lawyers must be aware of the value of
alternative dispute resolution when the courts are heavily
overburdened with caseloads. They must actively promote arbitration
and ADR.
(6) The Government and professional organizations should promote

arbitration and ADR and enhance the understanding of them by
sponsoring and conducting educational and training programs for both
the bar and the bench and for arbitration and ADR professionals to
keep them abreast of recent developments in theory and practice of
arbitration, and by allowing cross-fertilization of knowledge in the
field of dispute resolution by organizing occasional seminars and
188
See Art. 95, The Constitution of the People’s Republic of Bangladesh, 1972.
regional and international conferences under the auspices of the

Ministry of Law and Parliamentary Affairs and concerned institutions.
(7) Last but not least, the Arbitration Act, 2001 could be amended, on a
later occasion, to incorporate rules on conciliation based on The
UNCITRAL Model Law on International Commercial Conciliation
(2002).189 There seems to be a trend in many countries nowadays to
incorporate arbitration and conciliation rules in the same document.190
189
See http://www.uncitral.org/en-index.htm.
190
See, e.g., The Indian Act.

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THE NEW LAW OF INTERNATIONAL COMMERCIAL

ARBITRATION IN BANGLADESH: A COMPARATIVE

Bangladesh has recently enacted a new arbitration law, known as “The

Electronic copy available at: http://ssrn.com/abstract=1342329

Interminable, time consuming, complex and expensive court procedures impelled

In light of their common historical experience as such, both Bangladesh and

Electronic copy available at: http://ssrn.com/abstract=1342329

II. INTERNATIONAL COMMERCIAL ARBITRATION DEFINED

In defining “international commercial arbitration,” the new Bangladesh Act

III. ARBITRATION AGREEMENT

IV. COMPOSITION OF THE ARBITRAL TRIBUNAL

of an arbitrator, both in domestic and international commercial arbitration, it is the

V. JURISDICTION OF ARBITRAL TRIBUNALS

A. The Doctrine of Compétence-Compétence

In keeping pace with the recent developments in the field of international

B. Autonomy of the Arbitration Clause

The second doctrine, i.e. “autonomy of the arbitration clause”58 described by

fiction. International arbitral practice has, however, embraced the doctrine as a

VI. OBJECTION TO THE JURISDICTION OF THE ARBITRAL TRIBUNAL

scope of its authority is raised.77 A delayed plea concerning jurisdictional

VII. INTERIM MEASURES : THE ARBITRAL TRIBUNAL

VIII. PARTIES’ OPTION FOR MEDIATION OR CONCILIATION IN

IX. CONDUCT OF THE ARBITRAL PROCEEDINGS

advisors or assessors,”133 and “powers of the arbitral tribunal in case of default of

X. ARBITRAL AWARD AND THE TERMINATION OF PROCEEDINGS

XI. RECOURSE AGAINST THE ARBITRAL AWARD

have expressed confidence in him to do so. Otherwise, a simple error of fact or

XII. ENFORCEMENT AND RECOGNITION OF AWARDS

XIII. CONCLUDING REMARKS AND PERSPECTIVE

The foregoing examination of the new Bangladesh Act, 2001 from a

order to make Bangladesh an attractive place for much-needed foreign investment,

(5) It is not enough to enact a piece of legislation on arbitration to effect

(6) The Government and professional organizations should promote

regional and international conferences under the auspices of the

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