Mediation vs Arbitration in Bangladesh 2026: Choosing, Combining and Enforcing the Outcome

Mediation vs arbitration Bangladesh: the choice in 2026

Mediation vs arbitration Bangladesh decisions used to be made once, in the dispute clause, and forgotten. In 2026 they are made repeatedly. Statute now pushes many disputes into mediation before a case can even be filed, the commercial courts expect a settlement attempt first, arbitration remains the only route to a binding private decision, and labour, income tax, VAT and customs law each run their own conciliation or facilitator schemes. Choosing well means knowing what each process can and cannot deliver: who decides, how long it takes, what it costs, whether the outcome binds, and how it is enforced.

This guide compares mediation, arbitration and conciliation side by side, explains med-arb clauses, labour conciliation, tax ADR, settlement enforcement and online hearings. It does not repeat our detailed guides to mediation in Bangladesh, court-annexed mediation and arbitration versus litigation; it links to them where the detail lives.

Summary: In the mediation vs arbitration Bangladesh comparison, mediation produces a negotiated settlement that binds only once it is signed and, ideally, wrapped in a court order, decree or award; arbitration produces an award that is final, binding and enforceable as a decree, with a single sixty-day challenge window. Conciliation is a statutory process in labour disputes and, in substance, in tax ADR. The strongest outcomes usually combine the routes: mediate first, arbitrate if talks fail, and record any settlement in the form that is easiest to enforce.

Key point: A mediated settlement is not automatically enforceable as a judgment. Its force depends on the wrapper: a certified legal aid settlement has the status of a court order, a commercial court settlement accepted by the court is treated as a decree, a court-annexed settlement becomes a compromise decree, and a settlement reached in arbitration can be recorded as an award on agreed terms. A purely private settlement is only a contract.

At a glance

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Table of Contents

Mediation vs arbitration Bangladesh: the difference that matters

The single most important distinction is who decides. In mediation, a neutral helps the parties reach their own agreement and has no power to impose one. The BIAC Mediation Rules 2019 describe mediation as a non-binding process in which the parties appoint a neutral to help them negotiate, and as confidential, consensual, non-adversarial and private.[7] In arbitration, the parties hand the decision to a tribunal. Section 39 of the Arbitration Act 2001 makes the award final and binding, and section 44 provides for its enforcement.[1]

Binding and non-binding outcomes

Mediation is non-binding in process and binding only in result: nothing happens unless both sides sign, but once they do, the settlement is a contract and, if properly recorded, a court-enforceable instrument. Arbitration is binding in process as well as result. A party that has agreed to arbitrate cannot walk away from the reference, and a party that loses cannot reargue the merits. A domestic award can be challenged only by an application to set aside within sixty days of receipt, and once that period expires or a challenge fails, the award is enforced through the court as if it were a decree.[2]

Control against certainty

Mediation keeps the outcome in the parties' hands, allows commercial solutions a tribunal could never order, such as revised supply terms or a staged buy-out, and preserves relationships. Arbitration gives up that control for a decision that ends the dispute even when the other side will not cooperate.

Neither route escapes the courts: mediated settlements often need a court to convert them into decrees, and arbitration depends on courts for interim measures, challenges and enforcement. Our guides to setting aside an arbitral award and enforcing an arbitral award cover that court stage in depth.

Mediation vs arbitration Bangladesh compared: consent, cost, time, enforceability and confidentiality

The table below sets mediation vs arbitration Bangladesh law against the five factors clients most often ask about, with statutory labour conciliation added because it is the main conciliation process in Bangladeshi law. On a phone, scroll it sideways.

Consent

Arbitration is always consensual at its root: there must be an arbitration agreement. Mediation is increasingly compulsory. Section 89A of the Code of Civil Procedure now says the court "shall" refer a contested suit to mediation after the written statement is filed, a change from "may" made in 2012.[3] Section 21B of the Legal Aid Services Act 2000 requires mediation through a legal aid office before filing listed disputes, and section 7 of the Commercial Courts Act 2026 requires pre-suit mediation where no urgent interim relief is sought, once government rules exist.[4] [5] Compulsory attendance is not compulsory settlement: no one can be made to sign.

Cost

Mediation is almost always cheaper. Court-led mediation under section 89A carries no fee, and a successful mediation entitles the parties to a certificate for refund of court fees paid on the plaint or written statement, payable within sixty days.[3] Arbitration costs include arbitrator fees, legal fees, institutional fees and expert costs, generally fixed by the tribunal.[2] Our analysis of the cost of arbitration in Bangladesh breaks those figures down.

Time

Mediation runs on short statutory clocks. Court-annexed mediation must finish within sixty days of the mediator's appointment, extendable by up to thirty days.[3] In-suit mediation in the commercial courts must finish within thirty days, extendable by a further thirty.[4] A BIAC mediator's appointment cannot run beyond sixty days without the parties' written consent and BIAC's approval.[7] Arbitration is slower. The Arbitration Act sets no time limit for making an award.[2] Institutional rules help: under the BIAC Arbitration Rules 2019, oral hearings must begin within thirty days of the written pleadings and conclude within 180 days of the first hearing.[8]

Enforceability

An arbitral award is enforceable as a decree once the challenge window closes.[2] A mediated settlement is enforceable only to the extent of its wrapper, discussed in the settlement agreement section below. Across borders the gap widens: Bangladesh acceded to the New York Convention on arbitral awards on 6 May 1992, but has not signed the Singapore Convention on mediated settlements.[2] [9]

Confidentiality

The Arbitration Act 2001 is silent on the confidentiality of arbitral proceedings and awards, so confidentiality depends on the parties' agreement, the institutional rules and the tribunal's orders.[2] The BIAC Arbitration Rules make all hearings private and confidential.[8] Mediation is better protected by statute: court-annexed mediation communications are privileged and cannot be used as evidence in the same suit or other proceedings, and the BIAC Mediation Rules extend confidentiality to the settlement agreement except where disclosure is needed for enforcement.[3] [7] If confidentiality matters, write it into the arbitration clause expressly.

The four mediation routes in 2026, in brief

Bangladesh now has four main mediation tracks. Each is covered in depth elsewhere on this site; what follows is the summary needed to compare them with arbitration.

Court-annexed mediation under sections 89A to 89C

Once a defended suit reaches the written statement stage, the trial court must adjourn and either mediate itself or refer the dispute to a legal aid officer, the parties' lawyers, the parties or a panel mediator. A full or partial compromise is recorded as an agreement and the court passes an order or decree under Order XXIII within seven days; no appeal or revision lies against it. Money-loan suits under the Artha Rin Adalat Ain 2003 are excluded from section 89A.[3] Our guide to court-annexed mediation in Bangladesh covers the procedure.

Commercial Courts Act 2026: pre-suit and in-suit mediation

The Commercial Courts Act 2026 (Act No 23 of 2026), dated 10 April 2026 and deemed effective from 1 January 2026, contains a special mediation provision in section 7. A plaintiff whose suit does not involve urgent interim relief must first complete the pre-suit mediation process prescribed by government rules, if those rules exist when the suit is filed.

At any stage before judgment the court may, with both parties' consent, send the dispute to a panel mediator or another mediator it approves.[4] The settlement must be in writing and signed by the parties and the mediator, and once the court is satisfied that no third party is harmed it is treated as a decree enforceable by the commercial court.[4] See our guide to the Commercial Courts Act.

Mandatory pre-case mediation under section 21B

Sections 21B to 21E were inserted into the Legal Aid Services Act 2000 by the Legal Aid Services (Amendment) Act 2026 (Act No 45 of 2026), which replaced the 2025 Ordinance. For disputes in the Act's schedule, an aggrieved party must first apply to the legal aid office for mediation and may go to court only if it fails, filing a report of the failed mediation with the plaint. Time spent in mediation is excluded from limitation.[5] By SRO No 288-Law/2026, the requirement applies from 31 July 2026 in 30 districts, including Sylhet, Mymensingh, Rangpur, Comilla, Bogura, Jessore, Cox's Bazar and Tangail.[5]

At launch the covered disputes included family, house rent, partition, pre-emption and parents' maintenance claims, and a settlement signed by the parties and certified by the chief legal aid officer was described as final, binding and enforceable with the status of a court order.[6] Our guide to legal aid in Bangladesh explains eligibility.

BIAC mediation

For private commercial disputes, the Bangladesh International Arbitration Centre administers mediation under its 2019 Mediation Rules. Offers may be made without prejudice at any stage, a signed settlement is authenticated by BIAC, and if talks fail BIAC certifies that the mediation has not succeeded.[7] Our guide to mediation in Bangladesh explains how a session runs and how to prepare.

The Singapore Convention: has Bangladesh signed?

No. The United Nations Convention on International Settlement Agreements Resulting from Mediation, known as the Singapore Convention, gives settlement agreements from international commercial mediation a direct enforcement route in contracting states. Bangladesh is neither a signatory nor a party. In South Asia, India, Sri Lanka, the Maldives and Afghanistan have signed, and Sri Lanka ratified in February 2024; Pakistan, Nepal and Bhutan, like Bangladesh, have not signed.[9]

For cross-border parties this is the most important mediation vs arbitration Bangladesh point. A settlement mediated in Bangladesh cannot rely on the Convention for enforcement abroad, and a foreign mediated settlement has no special status in a Bangladeshi court; it is enforced, if at all, as a contract. The practical answer for cross-border parties is to convert a mediated settlement into an arbitral award. Section 22 of the Arbitration Act 2001 lets a tribunal record a settlement as an award on agreed terms, with the same status and effect as any other award.[1] That award can then travel under the New York Convention. Our guide to foreign arbitral award enforcement explains the inbound side.

Med-arb, arb-med and stepped dispute clauses

The mediation vs arbitration Bangladesh question is often a false choice. Well-drafted commercial contracts use both, in sequence.

Med-arb: mediate first, arbitrate if it fails

The BIAC model med-arb clause refers a dispute first to BIAC mediation and provides that if no settlement is reached within sixty days of the mediator's appointment, the dispute shall be referred within a further sixty days to BIAC arbitration.[7] This is the structure we recommend most often for domestic commercial contracts. It gives a fixed, short settlement window without letting a reluctant party stall the claim indefinitely. Our guide to drafting an arbitration clause in Bangladesh covers seat, rules and language.

Can the mediator become the arbitrator?

Under BIAC's rules, no. Before mediation begins, the parties must undertake in writing that the mediator will not be appointed as arbitrator or adjudicator in later proceedings arising from the mediation or from other disputes under the same contract.[7] That protects candour: no party will reveal its real settlement range to someone who may later decide the case.

Arb-med: settlement inside the arbitration

Section 22 of the Arbitration Act 2001 allows the tribunal, with all parties' consent and at any stage, to use mediation, compromise or other procedures to encourage settlement.[1] If the parties settle, the BIAC Arbitration Rules let them ask the tribunal for an award recording the settlement, which need not give reasons.[8] This is the cleanest way to give a negotiated deal the enforceability of an award.

Drafting points for a stepped clause

• Fix the windows: a negotiation period, a mediation period running from a defined event, and a deadline to commence arbitration.
• Name the institution and rules for both stages, or the clause may be unworkable.
• Carve out urgent relief so either party can seek interim measures while talks continue.

Conciliation in Bangladesh: what it is and where the law uses it

Conciliation is the third option in any mediation vs arbitration Bangladesh analysis. It is often treated as a synonym for mediation, but in Bangladesh the distinction is statutory as much as conceptual. Conceptually, a conciliator plays a more active role and may propose terms; a mediator facilitates but does not advise. Statutorily, conciliation appears mainly in labour law.

The Arbitration Act 2001 has no conciliation regime

Unlike some Model Law jurisdictions that enacted a separate conciliation part, the Arbitration Act 2001 contains no standalone conciliation procedure. Its index runs from scope and arbitration agreements through awards, setting aside and foreign awards, with no conciliation chapter. Conciliation-type settlement appears only inside an arbitration, through section 22, which is headed "settlement otherwise than by arbitration".[1] A free-standing commercial conciliation therefore has no statutory framework: it is a contractual process, and any resulting agreement is a contract unless it is recorded as a decree or award.

Conciliation against mediation in practice

In practice, a labour conciliator is a government-appointed officer working to statutory deadlines, while a mediator is usually chosen by the parties. A labour conciliator must try to persuade the parties to arbitrate and issues a certificate of failure if they will not, opening the way to a strike or the Labour Court.[10] And a tax facilitator, although the statutes call the process alternative dispute resolution, works much like a conciliator, guiding the taxpayer and the revenue towards an agreed figure that then binds both sides.

Labour dispute resolution: conciliator, arbitrator and Labour Court

In labour matters the mediation vs arbitration Bangladesh choice is largely made by statute. Labour law has the most developed conciliation and arbitration machinery in the country, and it differs from commercial ADR in one crucial respect: for collective industrial disputes the steps are mandatory and the deadlines unforgiving. Our guide to the Labour Court in Bangladesh covers adjudication; this section covers the stages before it.

Collective disputes: bargaining and conciliation under section 210

Under section 210 of the Bangladesh Labour Act 2006, an employer or collective bargaining agent that foresees a dispute must set out its views in writing. The other side must arrange a bargaining meeting within fifteen days. If no settlement is reached within one month of the first meeting, or no meeting is arranged, either party may refer the dispute to the government-appointed conciliator within fifteen days. The conciliator must begin within ten days, and conciliation fails if there is no settlement within thirty days of the request unless the parties agree in writing to extend it.[10] A settlement at either stage is recorded in a signed memorandum of settlement.[10]

Labour arbitration

If conciliation fails, the conciliator must try to persuade the parties to refer the dispute to an arbitrator, who may come from the government panel or be any other person the parties agree. The arbitrator must make an award within thirty days of the request, or a longer agreed period. The award is final, no appeal lies against it, and it is valid for the period the arbitrator fixes, up to two years.[10]

If the parties will not arbitrate, the conciliator issues a certificate of failure within three days. The party raising the dispute then has fifteen days either to serve strike or lock-out notice or to apply to the Labour Court, and a dispute not pursued within the statutory times lapses and cannot be raised again for a year.[10]

How long settlements and awards last

A labour settlement takes effect on the agreed date or on signature, lasts for the agreed period or one year if none is agreed, and continues to bind until two months after either party gives written notice that it no longer wishes to be bound. A Labour Court award lasts for the period it specifies, up to two years.[10] Section 213 lets an employer, worker or collective bargaining agent apply to the Labour Court to enforce any award, settlement or agreement.[10] Our guide to trade union law in Bangladesh covers strike ballots and bargaining agents.

Individual employment disputes

Individual grievances follow a different path. A worker with a complaint about dismissal or other action under Chapter II must raise it with the employer in writing within thirty days; the employer has thirty days to decide; and the worker may then complain to the Labour Court within thirty days, with an appeal to the Labour Appellate Tribunal. No court fee is payable.[10] Negotiated exits remain common, and workers can use state legal aid: labour legal aid cells in Dhaka and Chattogram had assisted 29,829 workers by December 2025, taking 3,309 disputes to ADR and settling 1,920 of them.[13] See our guide to wrongful dismissal in Bangladesh.

The new labour ADR authority

The Bangladesh Labour (Amendment) Act 2026 (Act No 43 of 2026), dated 10 April 2026, inserts new sections 348B and 348C into the 2006 Act.[11] Section 348C provides for an Alternative Dispute Resolution Authority for labour disputes, first introduced by the 2025 amendment ordinance; commentators have urged that it be established and made operational without delay.[12] Until its rules are made, the section 33 and section 210 deadlines continue to run, and no employer or union should let them lapse while waiting for the new body.

Tax ADR: income tax, VAT and customs disputes

Tax disputes sit outside the usual mediation vs arbitration Bangladesh debate: revenue disputes run through statutory assessment and appeal, but each revenue statute also offers a negotiated alternative. Each of the three revenue statutes contains a facilitator-led process that can settle a dispute while it sits before an appellate authority, the tribunal or the Supreme Court.

Income tax ADR under the Income Tax Act 2023

Chapter III of Part 20, sections 296 to 308, applies to disputes where an assessment, or an appellate order, fixes income above the amount declared in the return.[14] The taxpayer may apply where the dispute is with an appellate authority, the Taxes Appellate Tribunal or the Supreme Court, but needs the court's permission for a case pending there, and a dispute already brought as a writ petition is excluded. The admitted tax liability must be paid first. A facilitator appointed by the National Board of Revenue conducts the process between the taxpayer and a Commissioner's representative not below Deputy Commissioner rank.[14]

If no agreement is reached within three months from the end of the month of application, none is deemed reached. A signed agreement binds both sides and cannot be challenged before any authority, tribunal or court, though it is void if obtained by fraud or misrepresentation and is subject to post-verification by the Board. If ADR fails, the taxpayer may still appeal, and the time spent in ADR is excluded from limitation.[14] The Finance Act 2026 extended ADR to orders already disposed of by the Tribunal, introduced a mechanism to involve the Board more directly and tightened recovery of tax agreed in ADR.[15]

VAT ADR: section 125 and rule 99

Section 125 of the Value Added Tax and Supplementary Duty Act 2012 lets a taxpayer apply to a facilitator chosen from the prescribed panel. A consensus settlement cannot be objected to in any court, unresolved issues return to the ordinary process, and time spent in an unsuccessful ADR does not count against the appeal deadline. Forgery or criminal offences and disputes involving a question of law are excluded.[16]

Under rule 99 of the VAT Rules 2016, the application is made in form VAT-17.1 to the Commissioner, the Commissioner (Appeal), the Appellate Tribunal or the relevant Division of the Supreme Court, depending on where the dispute sits, and the dispute must be resolved within ninety working days of the facilitator receiving the file.[17]

Facilitators under rule 101 include retired VAT officers not below Additional Commissioner, retired judges not below Additional District Judge, lawyers and chartered or cost and management accountants with at least seven years' VAT experience, and experienced businesspeople. An agreed outcome is recorded in form VAT-17.3 and is obligatory on both parties.[17] For exporters fighting a refused refund, our guide to the VAT refund in Bangladesh explains when ADR beats an appeal.

Customs ADR under the Customs Act 2023

Chapter XXV of the Customs Act 2023, sections 216 to 219, lets an importer or exporter seek ADR for disputes about customs valuation, or fines linked to valuation and classification, whether pending before customs, the Commissioner (Appeal), the Appellate Tribunal or a court. The application must be made before adjudication or appeal is complete.[18] Section 217(2) excludes fraud and criminal cases, seizure of prohibited, restricted or smuggled goods, money laundering, classification disputes, and alleged evasion through misdeclaration of description, quantity or HS code, forged documents, import and export policy violations or bond breaches.[18] That makes customs ADR a valuation tool. Our guides to customs valuation and HS code disputes explain the consequences.

When tax ADR is the right choice

Tax ADR works best for factual or quantitative disputes, such as disallowed expenses, a valuation uplift or input credit, where both sides prefer a number to a precedent. It works poorly on pure points of law. Because agreements are final, be sure of the figure before signing. Our tax disputes practice handles ADR alongside appeals, and our guide to tax audits in Bangladesh explains where most income tax disputes start.

Settlement agreements: out-of-court settlement, drafting and enforcement

Whichever side of the mediation vs arbitration Bangladesh divide a dispute starts on, most end in a settlement. The settlement agreement is the product of the whole exercise, and its value depends on two things: precise drafting and the right enforcement wrapper.

The out-of-court settlement process

An out-of-court settlement starts with a without-prejudice exchange of positions, moves to heads of terms, and ends with a signed agreement. If proceedings are pending, the agreement must then be placed before the court or tribunal so that the proceedings end on its terms; a private deal that leaves the suit pending invites a second dispute. Before signing, confirm every signatory's authority, obtain board resolutions for companies, and check whether any regulatory approval is needed for performance. Compoundable criminal complaints that run alongside a civil dispute need their own route; see our guide to compromise in criminal cases.

Choosing the enforcement wrapper

The same settlement terms have very different force depending on how they are recorded:

Each wrapper rests on a specific provision: section 21B for legal aid, section 7(4) of the Commercial Courts Act, section 89A of the Code, section 22 of the Arbitration Act, section 213 of the Labour Act and section 305 of the Income Tax Act.[1] [3] [4] [6] [10] [14] A purely private settlement, including one authenticated by BIAC, is enforceable only by a suit for breach unless it is wrapped in a decree or award.[7]

Drafting tips that survive enforcement

• Precise obligations: amounts, currencies, instalment dates, bank accounts and property descriptions that an executing court can apply without interpretation.
• Default clause: what happens on a missed payment, including acceleration, interest and revival of the original claim where the law allows.
• Full and final release: identify exactly which claims are released, and carve out anything that is not.
• Withdrawal mechanics: who withdraws which suit, complaint or appeal, and when.
• Confidentiality and costs: who bears which costs and what may be disclosed.
• Dispute clause: a short arbitration clause for disputes about the settlement itself, so a breach does not send the parties back to the trial queue.

If a settlement does become a decree and the other side defaults, execution follows the ordinary route set out in our guide to execution cases in Bangladesh.

Online dispute resolution and virtual hearings

Online dispute resolution is at an early stage, but the legal basis for virtual hearings exists and the first dedicated ODR facility has opened.

Virtual hearings in the courts

The Use of Information and Communication Technology by Courts Ordinance, promulgated on 9 May 2020, allowed courts to conduct trials, hearings, evidence, arguments and judgments by audio-video or other electronic means, and treated virtual presence as satisfying any requirement of physical presence under the civil and criminal procedure codes or any other law.[19] Parliament approved the corresponding bill on 8 July 2020.[20] Virtual hearings are therefore a lawful option for courts, subject to Supreme Court practice directions.

Online arbitration and virtual arbitral hearings

The Arbitration Act 2001 leaves the determination of procedure to the parties' agreement under section 25 and says nothing specific about remote hearings.[1] [2] The BIAC Arbitration Rules 2019 expressly allow the preliminary conference to be held in person or by teleconference.[8] The BIAC Mediation Rules do not address online sessions directly, but let the mediator and parties agree how the mediation will be conducted.[7] The safe course is to record the parties' agreement to virtual hearings in the first procedural order, together with protocols for witness identification, document sharing and recording, so that no party can later argue it was denied a proper opportunity to present its case.

ODR platforms and pilots

On 21 August 2026 the NGO Friendship, in collaboration with the Directorate of Bangladesh Legal Aid, inaugurated what it describes as the country's first ODR Centre at the Chowki Adalat in Paikgacha, Khulna, where eligible parties can join virtual mediation sessions on a digital platform without travelling to the district town.[21] There is no general ODR statute and no special rule for online settlements, which are enforced like any other settlement.

Trade dispute resolution for exporters and importers

Trade disputes test the mediation vs arbitration Bangladesh choice hardest, because the counterparty and its assets are usually abroad. In 2026 Bangladeshi exporters reported about USD 40 million in unpaid shipments by around 40 factories and buying houses to the Polish retailer LPP; they rejected an informal proposal to accept a 50 per cent reduction, and trade bodies threatened to blacklist the buyer.[22] A Bangladeshi judgment is hard to enforce abroad; an arbitral award travels under the New York Convention. Exporters should insist on arbitration with a neutral seat and institution in every sales contract, and treat mediation or trade-body intervention as the first step, not the only one.

Documentary credit disputes follow the credit's own rules and are covered in our guide to LC disputes in Bangladesh. Valuation disputes with customs and VAT disputes can use the statutory ADR routes above; classification disputes cannot. Our guide to international trade law in Bangladesh sets out the wider framework.

Step by step: choosing between mediation and arbitration

The following sequence reflects how we advise clients facing a live mediation vs arbitration Bangladesh decision, whether under an existing clause or after a dispute has arisen.

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Throughout, keep settlement communications marked without prejudice, calendar every limitation date and statutory deadline, and never let a negotiation run past a challenge or appeal window without protective steps in place.

Mistakes to avoid

• Treating a settlement as self-enforcing: a signed deal that is not converted into a decree, award or certified settlement can leave you suing on it years later.
• Ignoring mandatory mediation: in a covered district, a scheduled dispute must go to the legal aid office first, and a later case must be filed with the report of the failed mediation.[5]
• Letting labour deadlines lapse: a collective dispute not pursued within the section 210 to 212 time limits ceases to exist and cannot be raised for a year.[10]
• Using tax ADR for a point of law: VAT ADR excludes questions of law, and customs ADR excludes classification.[16] [18]
• Assuming confidentiality in arbitration: the Act is silent, so write it into the clause.[2]
• Relying on the Singapore Convention: Bangladesh has not signed it; use a consent award for cross-border deals.[9]

Our view: which should you choose?

For the mediation vs arbitration Bangladesh decision, our default advice is simple. Mediate when the relationship matters, the issues are commercial rather than legal, or the law makes mediation compulsory. Arbitrate when you need a binding decision against an unwilling counterparty, when assets are abroad, or when the dispute turns on a point of law or technical evidence that only a determination will settle.

In most commercial contracts, use both: a short mediation window followed by arbitration with a clear seat, rules and language. Our alternative dispute resolution practice and international arbitration practice advise on clause design, mediation, arbitration and settlement drafting, and our employment disputes team handles conciliation and Labour Court work. For the wider map of every route, read our overview of alternative dispute resolution in Bangladesh, or contact TRW to discuss your dispute.

Frequently asked questions

Mediation vs arbitration Bangladesh: what is the main difference?

A mediator helps the parties reach their own agreement and cannot impose one; an arbitral tribunal decides the dispute, and its award is final and binding under section 39 of the Arbitration Act 2001 and enforceable as a decree.[1] [2] [7]

Is a mediated settlement binding in Bangladesh?

Once signed it is a binding contract, and its enforceability depends on how it is recorded: a certified legal aid settlement has the status of a court order, a court-annexed or commercial court settlement becomes a decree, and a settlement in arbitration can become an award on agreed terms.[1] [3] [4] [6]

Has Bangladesh signed the Singapore Convention on Mediation?

No. Bangladesh is neither a signatory nor a party, so cross-border mediated settlements should be recorded as arbitral awards on agreed terms under section 22 of the Arbitration Act 2001.[1] [9]

Does the Arbitration Act 2001 cover conciliation?

Not as a separate procedure. Section 22 only allows a tribunal, with all parties' consent, to use mediation, compromise or other methods during an arbitration and to record any settlement as an award on agreed terms.[1]

How does labour conciliation work in Bangladesh?

After failed bargaining, either party may refer a collective dispute to the conciliator, who must start within ten days. Conciliation fails after thirty days unless extended; the parties may then go to an agreed arbitrator, whose award is final, or the conciliator issues a certificate of failure.[10]

Is pre-suit mediation compulsory in the commercial courts?

Under section 7 of the Commercial Courts Act 2026, a plaintiff not seeking urgent interim relief must first complete pre-suit mediation, provided the government's rules exist when the suit is filed. In-suit mediation is by consent and must finish within thirty days, extendable by thirty.[4]

Can an income tax dispute be settled through ADR?

Yes. Sections 296 to 308 of the Income Tax Act 2023 allow a facilitator-led ADR for disputes pending before an appellate authority, the Tribunal or the Supreme Court, after the admitted tax is paid. An agreement binds both sides and cannot be challenged.[14]

How long does VAT ADR take?

Under rule 99 of the VAT Rules 2016, the dispute must be resolved within ninety working days of the facilitator receiving the application and documents.[17]

Can customs classification disputes go to ADR?

No. Section 217(2) of the Customs Act 2023 excludes classification disputes and alleged misdeclaration of description, quantity or HS code; customs ADR is mainly for valuation disputes.[18]

Are virtual hearings lawful in Bangladesh?

Yes. The 2020 courts technology law treats virtual presence as physical presence in court proceedings, and arbitral tribunals may hold virtual hearings where the parties agree; BIAC's rules allow conferences by teleconference.[8] [19] [20]