Arbitration is recognized throughout the world as the most efficient means of resolving commercial disputes.
In general, by using an arbitration provision in a commercial contract, parties can settle their disputes through a final and binding arbitral award by a single arbitrator or an arbitral tribunal on the topic of dispute.
There are two types of arbitral awards: domestic arbitral awards and foreign arbitral awards.
All arbitral procedures in Bangladesh are currently governed by the Arbitration Act, 2001 which also defines “foreign arbitral awards” as awards made in the territory of any other state other than Bangladesh in pursuance of an arbitration agreement but does not include awards rendered in the territories of the state mentioned.
In other words, awards made in another nation and not stated in Bangladesh are referred to as foreign arbitral awards.
How it is enforced in Bangladesh
In terms of enforcement of foreign arbitral judgements in Bangladesh, the issue of whether Bangladesh has the legal jurisdiction to enforce them and how it will enforce them comes first.
It must be noted that by accession in 1992, Bangladesh is a party to the New York Convention, 1958 on the Recognition andEnforcement of Foreign Arbitral Awards,which implies that it is bound by treaties to fulfill its obligations.
Therefore, Bangladesh enacted the Arbitration Act, 2001 with the influence of the UNCITRAL Model Law on Arbitration and incorporates Article III of the New York Convention which makes a foreign arbitral award binding upon the parties to the arbitration agreement for all purposes and the local court can enforce it as a decree of the local court.
Therefore, it can be said that a Bangladeshi local court has the legal jurisdiction to enforce the foreign arbitral awards.
However, in order to enforce such awards, party must follow a legal procedure outlined in the Act of 2001 and shall file an application under section 45 to the District Judge Court in Dhaka to enforce a foreign award, along with the required documents, which includes the original or copy of the arbitral award properly validated in the manner required by the law of the country in which it was awarded, the original or duly approved copy of the arbitration agreement, and any other proof that may be appropriate to show that it is a foreign award.
Following that, it will be enforced by the District Judge Court under Code of Civil Procedure 1908 without any special approval for enforcement from the local court.
In a recent judgment, Goenka Impex SA vs. Tallu Spinning Mills Ltd (Civil), the High Court Division declared that if all the prerequisites are met, the court must recognize a foreign arbitral award as having the same force as its own decree.
Additionally, in Canada Shipping and Trading S vs. TT Katikaayu and others (Admiralty Jurisdiction), it was held that once an arbitration process is completed in a foreign country, the arbitral award will be implemented by a court in that country under the Civil Procedure Code in the same way as if it were a decree of the court on the application of any party.
As a result, foreign arbitral judgements are enforceable through the district judge court if the pre-conditions are met.
When court refused its execution
Party must keep in mind that a foreign arbitral awards become enforceable after the expiration of sixty days from the date of the application to set aside the arbitral award under section 42 of the said Act or after the refusal of such application.
Therefore, parties have to apply to the court for execution of such awards within twelve years after the awards become enforceable; otherwise, there would be a bar under section 48 of the code of civil procedure.
Likewise, it may refuse on the following grounds prescribed in section 46 of the Arbitration Act, 2001:If the opposite party can prove that the:
- incapacity of a party to the arbitration agreement;
- invalidity of the arbitration;
- inadequate notice of the appointment of the arbitrator, or arbitral proceedings, or being unable to present his case due to some reasonable cause;
- a foreign arbitral award contains decisions on matters which are beyond the scope of the submission to arbitration;
- the arrangement of the arbitral tribunal was not in accordance with the agreement;
- the award has been set aside, suspended or not yet become binding upon the parties.
Or where a court finds that:
1. Incapability of settlement by arbitration on the subject matter of the dispute under the existing law;
2. Recognition and execution of award conflicts with the public policy of Bangladesh.
Therefore, it can be concluded that, as per section 46 of the Arbitration Act of 2001, the Dhaka District Judge Court has jurisdiction to enforce foreign arbitration awards in Bangladesh.
The author is a student of LL.M at North South University
