A brief summary of the important judgments on arbitration, given in 2023 by the Supreme Court of Bangladesh.
Bangladesh Rural Electrification Board vs. Bangladesh Energy Regulatory Commission (BERC) and others
Reference: Unreported (Civil Appeal Nos 18, 19 and 20 of 2019)
Legal Provision: Section 43 of the Arbitration Act, 2001
Legal Question: Whether the arbitral procedure prescribed in the agreement for reference to a named arbitrator can be ignored
Held: While considering the question of whether the arbitral procedure prescribed in the agreement for reference to a named arbitrator can be ignored, it is also necessary to keep in view of Section 43 of the Arbitration Act, 2001 which provides that an arbitral award may be set aside by the court if the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties. The legislative intent is that the parties should abide by the terms of the arbitration agreement if the arbitration agreement provides for arbitration by a named Arbitrator, the court should normally give effect to the provisions of the arbitration agreement.
Big Boss Corporation vs. Army Welfare Trust
Reference: 17 SCOB [2023] HCD 57
Legal Provision: Section 42 of the Arbitration Act, 2001
Legal Question: Whether the delay in challenging an arbitration award can be condoned under section 5 of the Limitations Act, 1908
Held: As per the provisions of section 29(2) of the Limitation Act, 1908, section 5 of the Limitation Act shall not be applicable to Arbitration Act, 2001. Therefore, any application to challenge an award after the statutory limitation period of 60 days is barred by law.
Mostafizur Rahman vs. Amin Maria & Others
Reference: 75 DLR (2023) HCD
Legal Provision: Sections 2 and 10 of the Arbitration Act, 2001
Legal Question: Can an arbitration agreement be incorporated by reference to another agreement?
Held: “as stated above, the parties to the said baina are now claiming to enforce their rights, or opposing such enforcement, under the parties of the said development agreement. Although the plaintiff was not a party to the said development agreement, by executing baina in question with Clause 12 therein, he has agreed to be bound by the terms of the said development agreement including Clause 17 thereof. Therefore, as per the definition of the ‘arbitration agreement’, as provided by Section 2(Dha) of the Arbitration Act 2001, the said baina should be termed as an agreement which arose from the said development agreement dated 28.07.2011 incorporating an arbitration clause therein under Clause-17. Thus, it cannot be denied that this baina dated 10.04.2014 also contains an arbitration agreement. This being the position, it cannot also be denied that the parties claiming or opposing their rights and title under the said baina are doing so under the parties to the arbitration agreement. Accordingly, the relevant provisions of the Arbitration Act, 2001, in particular Section 10 of the same, may be invoked in case of any proceeding initiated by any of such parties before any Court in Bangladesh.”
Anamika Corp. Ltd. & Others Vs. Humayun M. Chowdhury & Others
Reference: 17 SCOB [2023] HCD 119
Legal Provision: Section 7(ka) of the Arbitration Act, 2001
Legal Question: Whether the District Court can order for Expert Opinion to determine the existence of an Arbitration Agreement under Section 7K of the Arbitration Act, 2001.
Held: The power to issue an order for examination of a signature by a handwriting expert has been conferred upon the Arbitral Tribunal only under the provisions of section 17(ka) of the Arbitration Act, 2001. While issuing an order of ad-interim restraint or injunction whatsoever, the learned District Judge is not empowered to pass an order under section 45 of the Evidence Act. A civil court cannot travel beyond the limited powers of passing ad-interim orders in a situation of urgency conferred upon it under Section 7K of the Act.
Metro Homes Limited vs. Umee Kulsum and Ors.
Reference: LEX/BDHC/0006/2023
Legal Provision: Section 15/16 of the Arbitration Act, 2001
Legal Question: Can a Chairman of an Arbitral Tribunal be replaced for completing the arbitration?
Held: “So it is clear for the last two and a half years no sitting of the Arbitration Tribunal was held. But the learned District Judge has failed to comprehend the urgency of disposing of the proceedings of the Arbitration Tribunal while dismissing the Miscellaneous Case. Though the learned counsel appearing for the opposite party nos. 2-6 does not dispute the power given to the learned District Judge in appointing a new chairman of an Arbitration Tribunal under the provision of clause (ka) of section 15(2) of the Act. However, at last, the learned counsel for the petitioner and those of the opposite parties arrived at a consensus and made a common submission to the effect that, if a chairman is appointed replacing the incumbent one, then a time frame be given to the chairman to be nominated on the concurrence of the parties, so that the arbitration proceedings can be started from the stage where it had finally been ended.”
Abdul Wahab (Md) Vs. Kashba Housing Private Ltd.
Reference: 28 BLC (2023) HCD 673
Legal Provision: Section 12 of the Arbitration Act, 2001, read with section 36 of the Real Estate Development Act, 2010
Legal Question: Whether the District Court can reject an application for appointing an arbitrator on behalf of a party where the other party has nominated an arbitrator.
Held: The District Judge ought to have appointed an arbitrator for and on behalf of the opposite party maintaining the nominated arbitrator already appointed by the petitioner, but the District Judge upon misconception of law as well as misreading and misconstruing the total scenario of the dispute arose between the parties, rejected the application summararily, and as such, it has committed an error of law, in the decision occassioning failure og justice calling interference by this Court.
Agrocorp Intl. Pte. Ltd. Vs. Vietnam Northern Food Corporation
Reference: 18 SCOB [2023] HCD 213
Legal Provision: Section 9, 12, 17 of the Arbitration Act, 2001
Legal Question: Whether the District Court can examine the existence of an arbitration agreement while deciding an application for appointment of arbitrators.
Held: It is necessary to determine the existence of an arbitration agreement to invoke the procedure under section 12 of the Arbitration Act. Thereafter, examining all the annexure the Court found that there
was no arbitration agreement between the parties and no contractual obligation arose between
them from email communications. The Court also held that even in the absence of any arbitration agreement between the parties, they are at liberty to arbitrate through mutual consent. Consequently, the rule was discharged.
Mitul Properties Ltd. Vs. M.N.H. Bulu
Reference: 18 SCOB [2023] HCD 257
Legal Provision: Section 42 of the Arbitration Act, 2001 read with section 115 of the Code of Civil Procedure, 1908
Legal Question: Whether a civil revision is maintainable against any interlocutory order passed in an
application under section 42 of the Arbitration Act, 2001
Held: The term “জেলা জজ” as mentioned in the Arbitration Act, 2001 means the ‘Court of District Judge’, not ‘persona designata’ and any decision passed in a proceeding under this Act is amenable in a civil revision under the Code of Civil Procedure and as such, the civil revision is maintainable.