By Anika Mardiah Chowdhury
In order to harmonize global practice in the commercial field, the United Nations Commission on International Trade Law has adopted the UNCITRAL Model Law on International Commercial Arbitration. Many countries have adopted this in their domestic law; Bangladesh has also adopted this modern practice and adopted the Arbitration Act of 2001 by reforming the Arbitration Act of 1940. Under this Act, a Foreign Arbitral Award is defined as an award made in pursuance of an arbitration agreement in any state other than Bangladesh territory. This paper shall focus on the provisions of the Arbitration Act, 2001, in respect of the enforcement of foreign arbitral awards in Bangladesh, the requirements to be addressed for enforcement, and the challenges the parties may face in the enforcement of foreign arbitral awards in Bangladesh.
The Arbitration Act of 2001 was enacted to expedite arbitration proceedings, particularly the enforcement of foreign arbitral awards in Bangladesh. Also, the Act makes it obligatory for the national courts of Bangladesh to enforce foreign arbitral awards as if they were a court of the courts in the case of Smith Co-Generation (BD)B.D.vt. Ltd. Vs. Bangladesh Power Development Board 3(2010)15 BLC (HCD) 704 where it was held that Sections 45 and 46 of the following Act of 2001 provide the appropriate forum for seeking remedy against the execution of an arbitral award. Hence, a court shall enforce a foreign arbitral award upon an application being made to it by any party under the Code of Civil Procedure 1908 in the same manner as if it were a decCourtf the couCourtder Canada Shipping and Trading SA S.A. TT Katikaayu and another (2002) 54 DLR (HCD) 93, 7.
Chapter X of the Arbitration Act mentions the recognition and enforcement of certain foreign arbitral awards. Where section 45 states that any foreign award that would be enforceable shall be treated as binding for all purposes on the persons between whom it was made and may accordingly be relied on by any of those persons by way of defense, set-off, or otherwise in any legal proceedings in Bangladesh. Also, a foreign arbitral award shall be enforced on the application being made to it by any party by executory of the CouCourtder the Code of Civil Procedure in the same manner as if it were a court of the CouCourto, the provisions have a binding effect on the enforcement of the foreign arbitral award, but the party has followed some rules at the time of application. They have to submit-
- 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;
- the original agreement for arbitration or a duly certified copy thereof and such evidence as may be necessary to prove that the award is foreign.
It is to be mentioned that the party seeking to enforce the award has to bring a translation into English order or award copy, which shall be certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in Bangladesh.
The enforcement process will be much clearer if we see the case of Goenka Impex S.AS.A.Tallu Spinning Mills Ltd [2013] 33 BLD 340, where the award holder applied for enforcement of the foreign judgment. Still, the District Court of Dhaka rejected such on the ground that the attachment of properties can not be made outside Dhaka by them. The High Court Division clarified that when executing foreign awards, the District Court before which the enforcement application is made should treat the foreign award as its decree.
As in the following discussion, we have seen the binding effect of enforcement of foreign awards, but there are some exceptions to this. The UNCITRAL Model Law permitted the legislature to restrict some grounds on which a foreign arbitral award can be denied of enforcement.
Section 46 of the Arbitration Act of 2001 states some requirements for resolving the enforcement of foreign arbitral awards. The main grounds are-
Firstly, if a party to the arbitration agreement was under some incapacity.
Secondly, the arbitration agreement is not valid under the law to which the parties have subjected it.
Thirdly, the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or the arbitral proceedings or was otherwise unable, due to some reasonable causes, to present his case or the concerned foreign arbitral award contains decisions on matters beyond the scope of the submission to arbitration. Court, the couCourt which recognition or execution of the foreign arbitral award is sought, finds that the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force in Bangladesh or the recognition and execution of the foreign arbitral award conflicts with the public policy of Bangladesh can refuse for such enforcement.
There have some other groundsCourte the couCourtn reject the enforcement of an arbitral award if the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or in the absence of such agreement was not in accordance with the law of the country where the arbitration took place or if any competent authority has been set aside the award. It is to be mentioned that the court deemed fit can also reject the rejection of enforcement of the award order for the other party to give suitable security.
Court the courts the power to reject enforcement of the arbitral award, such power is very limited as in the case of Tata Power Company Ltd. v M/S Dynamic Const [2015] 2 SCOB 1Court) the couCourtnnot for simple reason defeats the purpose of the arbitration proceeding, there must be a gross violationCourtwhich court can reject such enforcement of the foreign arbitral award. Thus, the scope of interference is very limited.
In the above discussion, we have seen that Bangladesh has an Act for the enforcement of foreign arbitral awards, but the people face crucial problems with the procedure. The problem is enforcement in Bangladesh is highly time-consuming. Also, a party has to apply before the District Court in Dhaka to enforce such an award, and as w. Aspen, there is a list of circumstances under which the CouCourtll does not enforce an award, so after a lengthy process of time, the party may face crucial rejection. The parties went for arbitration for the quick process, but by enforcement of the award, the purpose of arbitration is hampering.
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Thus, the amendment of the Arbitration Act of 2001 is now required in order to resolve the many problems being faced by arbitration users in Bangladesh. Also, it is to be mentioned that the Arbitration Act of 2001, which is based on UNCITRAL Model Law, has been revised since the enactment of the Arbitration Act of 2001.
