Enforcement of Foreign Arbitral Award in Bangladesh
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 also has adopted this modern practice and adopted the law Arbitration Act, 2001 by reforming the Arbitration Act, 1940. Under this Act, Foreign Arbitral Award defines an award that is made in pursuance of an arbitration agreement in the territory of any state other than Bangladesh. 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, 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 decree of the court. As in the case of Smith Co-Generation (BD) Pvt. 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 decree of the court under Canada Shipping and Trading SA vs. TT Katikaayu and another (2002) 54 DLR (HCD) 93, 7.
Chapter X of the Arbitration Act mentions recognition and enforcement of certain foreign arbitral awards. Where section 45 states that any foreign award which would be enforceable shall be treated as binding for all purposes on the persons as 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 on the application being made to it by any party be enforced by execution by the Court under the Code of Civil Procedure in the same manner as if it were a decree of the Court.
So, the provisions make the binding effect of 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 a foreign award.
It is to be mention that the party seeking to enforce the award have 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.A. v Tallu Spinning Mills Ltd  33 BLD 340 where the award holder filed an application for enforcement of foreign judgment but 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 own decree.
As in the following discussion we have seen the binding effect of enforcement of foreign award but there has some exception to this. The UNCITRAL Model Law permitted the legislature to restricted some grounds on which a foreign arbitral award can be denied of enforcement.
Section 46 of the Arbitration Act, 2001 states some for refuging the enforcement of the foreign arbitral award. 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 of 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.
Also, the court in 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 is in conflict with the public policy of Bangladesh can refuse for such enforcement.
There have some other grounds where the court can reject the enforcement of 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 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 mention that the court if deem fit can also with the rejection of enforcement of award order the other party to give suitable security.
Though the court has the power to reject enforcement of arbitral award such power is very limited as in the case of Tata Power Company Ltd. v M/S Dynamic Const  2 SCOB 15 (AD) the court held that the court cannot for simple reason defeat the purpose of the arbitration proceeding, there must be a gross violation for which 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 such crucial problems in 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 we have seen there is a list of circumstances under which the Court will not enforce an award, so after a lengthy process of time, the party may face rejection which is crucial. Whereas the parties went for arbitration for the quick process but by enforcement of award the purpose of arbitration is hampering.
Thus, the amendment of the Arbitration Act of 2001 is now urged required in order to resolve the many problems being faced by arbitration users in Bangladesh. Also, it is to be mention that the Arbitration Act, 2001 which is based on UNCITRAL Model Law, has been revised since the enactment of the Arbitration Act of 2001.