The existing arbitration law should be amended for reducing the cost and time in disposal of cases, and to make the law user-friendly to help boost inflow of Foreign Direct Investment (FDI) in Bangladesh, said experts.
Talking to the Bangladesh Post on Friday Director of the Bangladesh International Arbitration Centre (BIAC) Akmal Azad said that the Law Commission had prepared a draft of the Arbitration (Amendment) Act in 2018 for making the arbitration process user-friendly.
Arbitration is becoming a suitable and dynamic method of dispute resolution between the foreign investors and the buyers in Bangladesh.
Previously, the arbitration process was maintained by the ‘Arbitration Act, 1940’, while the process is currently being maintained by the ‘Arbitration Act, 2001’. However, there are some inconsistencies and loopholes in the existing law.
Against this backdrop, amendment to the ‘Arbitration Act, 2001’ is needed to bring clarity to its legal provisions and to improve the effectiveness of the process. If the law is amended, the stakeholders would benefit from it and it will invite more foreign investments, contributing to the overall development of the country’s economy, said experts.
If the draft is finalised and fresh law is enacted, it will settle the commercial disputes more dynamically through arbitration activities outside the court. Many foreign investors remain reluctant to invest without strong protection. If the law is amended, investors and buyers from many foreign countries, including China, would be more interested to invest in Bangladesh, said BIAC director Akmal Azad.
He also said that the arbitration law was updated in India. It should be amended in Bangladesh as the law has many limitations and loopholes. He called upon the authorities concerned to take initiative in this regard.
The Law Commission had prepared the draft law by incorporating provisions on fixing the fee of the arbitrator and limiting the time for disposal of cases, proposing 53 amendments to the existing law enacted in 2001.
The draft law has not yet been amended although it was prepared three years ago. The 38-page draft was uploaded on the website of the Law Commission in 2018.
Chief Research Officer at the Law Commission Fowzul Azim said that the ‘Arbitration Act, 2001’ was enacted with the spirit of recognising and dealing with aspects of international commercial arbitration.
The draft was prepared to update the law. The draft will be finalised and sent to the authorities concerned after obtaining opinions of the individuals, experts and organisations. He, however, said that the arbitration framework in Bangladesh would be more attractive for both Bangladeshi and international clients, once the amendment to the arbitration law is approved in line with the international best practices.
The Law Commission had prepared the draft of the ‘Arbitration (Amendment) Act, 2018’ with 53 amendments in order to ensure transparency and impartiality in the arbitration proceedings. The jurisdiction of the arbitrator and the court has been specified in the draft, while the definition of the arbitration and appellate court has also been cleared in order to ensure justice for all.
There will be a tribunal for the settlement of arbitral disputes. That tribunal will perform in a fair and impartial manner. The arbitral tribunal will dispose of it within 365 days of filing the arbitration. However, if a written application is received from any party, the settlement period can be fixed up to a maximum of 30 days.
Sources said that about 35 lakh cases were pending in courts across the country. Legal experts expressed the views that amendment to the Arbitration Act would ensure smooth disposal of a number of civil cases in the country.