Arbitration

Arbitration is settlement of a dispute by the decision not of a regular and ordinary court of law
but of one or more persons who are called arbitrators, whose decision the parties agree to accept
as binding whether they agree to the decision or not.
The person appointed to adjudicate upon the difference is called Arbitrator. Where two
arbitrators are appointed and the submission provides that in the event of their disagreement, the
matter in dispute shall be referred to the decision of a third person; such third person is called an
Umpire.
Modes of Submission
A reference or submission to arbitration may be made in either of following three ways:
(i)
By agreement between the parties without the intervention of the court: or,
(ii)
through the intervention of the Court invoked by a joint petition of both the
parties; or
(iii)
By the operation of law.
Who can submit to Arbitration?
Generally speaking, any person who can enter into a contract can submit to
arbitration as long as he is interested in the subject-matter.
An agent duly authorized may enter into a submissive agreement and bind his
principal.
A partner in a trading firm cannot submit to arbitration without the authority of all
other partners.
Infants cannot submit to arbitration so as to be bound by the award. The guardian
of the lunatic may consent of behalf of a lunatic to be submission of arbitration.
Attorneys and counsels can refer the case of their clients to arbitration with the
consent of their clients.
Composition of Arbitral Tribunal
Section 11 of the Arbitration Act, 2001, provides that:
1) Subject to the provisions of sub-section (3), the parties shall the determination of a
number of arbitrators.
2) The Arbitration Tribunal shall consist of three arbitrators failing the determination of
a number referred to in sub-section (1)
3) The appointed arbitrators shall jointly appoint an additional arbitrator who shall act as
a Chairman of the arbitration tribunal, unless otherwise agreed by the parties, where
they appoint an even number of arbitrators.
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Removal of Arbitrators
Arbitrator cannot be removed except with the permission of the Court where the parties to the
reference had reserved the rights of revoking the authority of the arbitrators. On the application
of any party to a reference, the Court may remove an arbitrator or an umpire who fails to use all
reasonable dispatch in entering on and proceeding with the reference and making an award or
who has misconduct himself or the proceedings.
Where the authority of an arbitrator or arbitrators or an umpire is revoked by leave of the Court,
or where the Court removes an umpire or a sole arbitrator or all the arbitrators, the Court may, on
the application of any party to the arbitration agreement, either:
(a) Appoint a person to act as sole arbitrator in the place of the person or persons so displaced;
or
(b) Order that the arbitration agreement shall cease to have effect with respect to the difference
referred.
Powers and duties of Arbitration and Umpires
The powers and duties of the arbitrators or umpires depend mainly on the terms of the
submission under which they are appointed. Subject to such terms, the arbitrators and umpires as
laid down in Section 17 of the Act, have power to:
(a) Administer oath or the parties and witness appearing;
(b) State a special case for the opinion of the Court on any question of law arising in course
of the arbitration proceeding to the Court for the latters opinion thereon;
(c) Administer to any party to the arbitration such questions as may, in the opinion of the
arbitrator or the umpire, be necessary;
(d) Make an award, which may be made conditional or in the alternative;
(e) Correct in an award any clerical error arising from any accidental slip or omission.
Duties
The first and foremost duty of an arbitrator is to act with impartiality. He should have personal
interest in the matter in dispute. But if he happens to be an interested party of which the parties
had notice at the time of appointment, the submission would be good. He should also see that he
accepts no hospitality from any of the parties to the reference. If it is proved to the satisfaction of
the Court that the effects of his accepting hospitality, was to bias his mind in favor of the parties
offering such hospitality, the Court will interfere to set aside the award.
It is also the duty of an arbitrator to consult the convenience of the parties as far as possible. To
that end, if the parties desire to be represented by a legal adviser, the arbitrator must permit them
to do so and must also and adjourn the proceedings to afford such opportunity to both the parties
without distinction.
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The arbitrator has also to see that all the proceedings to on in the presence of the parties or their
legal representatives, except in case where he is justified in acting expert after due notice.
The Award
The award is the written decision of the arbitrator or the umpire.
Section 38 of the Arbitration Act lies down as follows:
1. When the arbitrators or the umpire have made their award, they shall sign it and give
notice in writing to the parties of the making and signing thereof and of the amount of
fees and charges payable in respect of their arbitration and award.
2. The arbitrator must also file the award or a signed copy of it to the Court, at the request
of any party to the arbitration or at the instance of the Court, together with all the
depositions and documents which may have been taken or proved before them, upon the
payment of all fees and charges due in respect of the arbitration and award and of the
costs and charges of filing the award.
Application for setting aside Arbitral Award
Under Section 42 of the Act:
1) The court may set aside any arbitral award under this Act other than an award made in an
international commercial arbitration on the application of a party within sixty days from
the receipt of the award.
2) The High Court Division may set aside any arbitral award made in an international
commercial arbitration held in Bangladesh on the application of a party within sixty days
from the receipt of the award.
Enforcement of Arbitral Award
Section 44 provides that where the time for making an application to set aside the arbitral award
under section 42 has expired, or such application having been made, it has been refused, the
award shall be enforced under the Code of Civil Procedure, in the same manner as if it were a
decree of the Court.
Explanation: The expression Court, in this section means the Court within the local limits of
whose jurisdiction the arbitral award has been finally made and signed.

Effect of submission or reference to arbitral

Submission or reference to arbitration puts a prima facie bar to the institution of a suit in
a Court of law by any party agreeing to the arbitration relating to any of the disputes that
have been reference to arbitration.
If a party to a submission or reference institutes any such proceeding against the other
party, the latter can Conditions staying.
Court proceedings, apply to the Court, before whom the proceedings are pending, to stay
the proceedings and the Court will grant an order staying such suit or proceedings,
provided the following conditions are fulfilled:
1. Before an order can be made for staying the suit, the Court must be satisfied that the
suit has been instituted in respect of a matter agreed to be referred to arbitration. If
however, the suit relates to matters which are partly within the submission and partly
not covered by the submission, it depends on the direction of the Court to grant a
stay order or not.
2. That the applicant was and is still ready and willing to do all things necessary for the
proper conduct of the arbitration.
3. That the party no sufficient reason why the matter should not be referred in
accordance with the arbitration agreement.
4. That the party instituting the suit was not induced to enter into the arbitration
agreement by fraud.
5. That the party asking for the stay order has not filed a written statement by way of
defense in the suit sought to be stayed or taken any other steps in the proceeding.
If the Court is satisfied that the matter should be decided by arbitration, it stays the suit
or proceedings. It does not dismiss the suit, for, in case the award is remitted or set aside;
they stayed suit can be heard without the necessity of instituting it all over again.
Arbitration: Sec -2(m)
Arbitration means any arbitration whether or not administered by permanent Institution.
Arbitration agreement: Sec-2(n)
Arbitration agreement means an agreement by the parties to submit to Arbitration all or certain
disputes which have arisen or which may arise between Them in respect of a defined legal
relationship, whether contractual or not.
Arbitration tribunal: Sec-2(o)
Arbitration tribunal means a sole Arbitrator or a panel of Arbitrator.
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Arbitral award: Sec-2(p)

Arbitral award means a decision by the arbitral tribunal on the issue in Dispute.
Foreign arbitral award: Sec-2(k)
Foreign arbitral award means an award which is 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.
International Commercial Arbitration: Sec-2(C)
International Commercial Arbitration means an Arbitration relating to disputes arising out of
legal relationships, whether contractual or not, considered as commercial under the law in force
in Bangladesh and where at least one of the Parties is
(i) an individual who is a national of or habitually resident in, any country other than
Bangladesh; or
(ii) A body corporate which is incorporated in any country other than Bangladesh; or
(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;
Form of arbitration agreement: (Section -9)
(1) An arbitration agreement may be in the form of art arbitration clause in a contract or in the
form of a separate agreement.
(2) An arbitration agreement shall be in writing and an arbitration agreement shall be deemed to
be in writing f it is contained in
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams, Fax, e-mail or other means of telecommunication
which provide a record of the agreement; or
(c) An exchange of statement of claim and defiance in which the existence of the agreement is
alleged by one party and not denied by the other.
Explanation- The reference in a contract is a document containing an arbitration clause
constitutes an arbitration agreement of the contract is in writing and the reference is such as to
make that arbitration clause part of the contract.
Appointment of arbitrators: (Section-12)
(1) Subject to the provisions of this Act, the parties are free to agree on a procedure for
appointing the arbitrator or arbitrators.
(2) A person of any nationality may be an arbitrator, unless otherwise agreed by the
Parties.
(3) Failing any agreement referred to in sub-section (1).
(a) In an arbitration with a sole arbitrator, if the parties fail to agree on the arbitration within
thirty days from receipt of a request by one party from the other party to so agree the
appointment shall be made upon request of a party5

(i) By the District Judge in case of arbitration other than international commercial arbitration,
and
(ii) in case of international commercial arbitration with three arbitrators, each party shall appoint
one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall be
Chairman of the arbitral tribunal.
Termination of arbitrators mandate: (Section -15)
(1) The mandate of an arbitrator shall terminate.(a) He withdraws himself from office:
(b) He dies;
(c) All the parties agree on the termination of his mandate; or
(d) He is unable to perform his functions of his office or for other reasons fails to act without
undue delay and withdraws from his office or the parties agree on the termination of his
mandate.
(2) If arty arbitrator has incurred disqualifications referred to in clause (d) of subsection
(1) fails to withdraw himself from his office and all the parties fail to Arbitration Act, 2001
Agree on his termination, then on the application of any party within the prescribed period by
rules
(a) The District Judge, in case of other arbitrations excepting international commercial
arbitration;
(b) The Chief Justice or a Judge of the Supreme Court designated by the Chief Justice in case of
international commercial arbitration may terminate the said arbitrator
(3) Where the parties are agreed upon, the termination shall be enforceable by the person agreed
by the parties,
(4) If an arbitrator withdraws himself from his office or where all the parties agree on the
termination of the mandate of an arbitrator under the circumstances as referred to in clause(d) of
sub-section (1), it shall not imply acceptance of the validity on any ground referred to in this
clause or in sub section (3) of action
Explanation
In this section District Judge means that District Judge within whose local Jurisdiction the
concerned arbitration agreement has been entered into.
Jurisdiction of Arbitration Tribunals: (Section 17)
Competence of arbitration tribunal to rule on its own jurisdiction.- Unless otherwise agreed by
the parties, the arbitral tribunal may rule on its own jurisdiction on any questions including the
following issues, namely (a) Whether there is existence of a valid arbitration agreement.
(b) Whether the Arbitral Tribunal is properly constituted;
(c) Whether the arbitration agreement is against the public policy;
(d) Whether the arbitration agreement is incapable of being performed; and,
(e) Whether the matters have been submitted to arbitration in accordance with the Arbitration
agreement.
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General Responsibilities of the arbitral tribunal: (Section 23)

(1) The arbitral tribunal shall deal with any of the dispute submitted to it fairly and impartially
and for this purpose
(a) Each party shall be given reasonable opportunity to present his case orally or in writing or
both, and
(b) Each party shall be given reasonable opportunity to examine all the documents and other
relevant
materials filed by other party or any other person concerned before the tribunal,
(2) The arbitral tribunal shall deal with a dispute submitted to it as quickly as possible.
(3) The arbitral tribunal in conducting proceedings shall act fairly and impartially in deciding
procedure and evidence and in exercising other powers conferred on it.
Place of arbitration: (Section-26)
(1) The parties shall be free to agree on the place of arbitration.
(2) Failing such agreement referred to in sub-section (1), the place of arbitration shall be
determined by the arbitral tribunal having regard to the circumstances of the case, including the
convenience of the parties.
(3) Notwithstanding anything contained in sub-section (1), or sub-section (2), the arbitral tribunal
may, unless otherwise agreed by the parties, meet at any place it considers appropriate for
consultation among its members, for hearing witnesses, experts or the parties, or for inspection
of documents, goods or other property.
Commencement of arbitral proceedings: (Section -27)
Unless otherwise agreed by the parties, the proceedings shall be deemed to have commenced if (a) any dispute arises where the concerned arbitration agreement applies; and
(b) Any party to the agreement (i) Has received from another party to the agreement a notice requiring that party to refer, or to
concur in the reference of the Dispute to arbitration; or
(ii) Has received from another party to the agreement a notice requiring that party to appoint an
arbitral tribunal or to join or concur in, or approve the appointment of, an arbitral tribunal in
relation to the dispute.
Form and contents of arbitral award (Section-38)
(1) An arbitral award shall be in writing and shall be signed by the arbitrator or arbitrators.
(2) In arbitral proceedings with more than one arbitrator, the signatures of the majority of all the
members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature
is stated.
(3) No reasons shall have to be stated by the arbitral tribunal where the parties have agreed that
no reasons are to be given, or the award is an arbitral award on agreed terms under section 22.
(4) The arbitral award shall state its date and the place of arbitration as determined in
accordance with section 26 and the award shall be deemed to have been made at that place.
(5) After the arbitral award is made, a copy signed by the arbitrator or arbitrators shall be
delivered to each party.
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(6) Unless otherwise agreed by the parties

(a) Where and in so far as an arbitral award is for the payment of money, the arbitral tribunal
may include in the sum for which the award is moxie Interest, at such rate as it deems
reasonable, on the whole or any part of money, for the whole or any part of the period between
the date on which the cause of action arose and the date on which the award is made.
(b) 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.
Explanation Bank Rate under this sub-section means the rate of interest as Determined by
the Bangladesh Bank from time to time,
(7) Unless otherwise agreed by the parties (a) The costs of arbitration shall be fixed by the arbitral tribunal
(b) The arbitral tribunal shall 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.
Explanation
Under this sub-section, arbitration costs includes reasonable costs relating to the fees and
expenses of the arbitrators and witnesses; legal fees and expenses, any administration fees of the
institution supervising the arbitration and any other expenses incurred in connection with the
arbitral proceedings and the arbitral award.
Enforcement of arbitral award: (Section 44)
Where the time for making an application to set aside the arbitral award under section 42 has
expired, or such application having been mode, has been refused, the award shall be enforced
under the Code of Civil Procedure, in the same manner as of it were a decree of the Court.
Explanation.The expression Court in this section means the Court within the local
Limits of whose jurisdiction the arbitral award has been finally made and signed.
Jurisdiction: (Section 53)
Notwithstanding anything contained elsewhere in this Act, or in any other law for the time being
in force, where with respect to an arbitration agreement any application under this Act has been
made in a Court(a) that court alone shall have jurisdiction over the arbitral proceedings; and (b) all
subsequent applications arising out of that agreement and the arbitral proceedings shall be
made in that court and in no other court.

Limitation: (Section -55)

(1) Subject to the provisions of this Act, the Limitation Act, shall apply to arbitrations under this
Act as they apply to proceedings in Court.
(2) For the purposes of this section and the Limitation Act, arbitration shall be deemed to have
commenced on the date referred to in section 27.
(3) Where an arbitration agreement to submit future disputes to arbitration provided that any
claim to which the agreement applies shall be barred unless some step to commence arbitral
proceedings is taken within a time fixed by the agreement, the court may, on such terms, any, as
the interest of justice, may require, extend the time for such period as it thinks proper.
(4) Where the court orders that an arbitral award be set aside, the period between the
commencement of the arbitration and the date of the order of the court shall be excluded in
computing the time prescribed by the Limitation Act.

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Arbitration Past Years Questions

1. Define Arbitration and Arbitration agreement
2. Describe the power of an Arbitrator and Umpire
3. When and award can be modified or corrected?
4. Award
5. Essentials of an Award
6. When can court set aside and Award?
7. Define Arbitration.
8. What is the effect of Arbitration?
9. What matters cannot be referred to Arbitration?
10. State the modes of submission of Arbitrator?
11. Difference between role of an Arbitrator and Umpire.
12. Powers of an Arbitrator and Umpire.
13. What is Arbitration? What is the composition of an arbitral tribunal under the
Arbitration Act-2001?
14. What do understand about Arbitration?
15. Effect of Arbitration.
16. What are the components of an award under the Arbitration Act 2001?
17. Appointment of an Arbitrator under the Arbitration Act -2001.

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