Commercial Debt Recovery in Bangladesh: Courts, Timelines and Strategy in 2026

Commercial debt recovery in Bangladesh after the Commercial Courts Act 2026

Commercial debt recovery in Bangladesh has a new shape in 2026. Since the Commercial Courts Act 2026 (Act No. 23 of 2026) replaced the Commercial Court Ordinance 2026, trade creditors have specialist courts, a fixed trial timetable, summary judgment, statutory interest and loser-pays costs.[1] Banks and financial institutions, by contrast, still recover loans in the Artha Rin Adalat under the Artha Rin Adalat Ain 2003, which the new Act expressly leaves untouched.[4]

This guide is written from the creditor's side of the table. It explains which court hears which debt, the limitation and evidence points that decide a claim before it is filed, what mediation is genuinely compulsory, how procedure and timelines run in each forum, how to secure assets before judgment, and how to turn a decree into money. It closes with separate playbooks for lenders and for suppliers. For a section-by-section commentary on the Act itself, read our guide to the Commercial Courts Act; this article builds on it rather than repeating it.

Summary: Unpaid trade debts, service fees, construction bills and other contract sums now go to 75 specialist Commercial Courts with no minimum claim value, while bank and financial-institution loan recovery stays in the Artha Rin Adalat. The winning creditor files within limitation, pleads interest fully, uses summary judgment where the debt is documented, secures assets early and plans enforcement from day one.

Key point: The Commercial Courts Act does not change limitation. Most contract money claims must be filed within three years, and a plaint presented out of time will be rejected even if the debt is admitted. A signed acknowledgment or a part payment acknowledged in writing restarts the clock, so collect them deliberately during negotiations.

At a glance

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Table of Contents

Commercial debt recovery in Bangladesh: what changed in 2026

Until 2026 a supplier with an unpaid invoice had one practical court route: an ordinary money suit before a Joint District Judge under the Code of Civil Procedure 1908, with no fixed timetable and largely discretionary interest and costs. The Commercial Court Ordinance 2026, promulgated on 1 January 2026, created a separate track for listed commercial disputes, and Parliament replaced it with the Commercial Courts Act 2026, Act No. 23 of 2026.[1] The Law Minister confirmed the Act was passed in April 2026.[3]

On 3 February 2026 the Law and Justice Division, after consulting the Supreme Court, notified 75 Commercial Courts nationwide, including three in the Dhaka metropolitan area and two in the Chattogram metropolitan area.[2] For creditors the reform brings speed, with a ninety-day final hearing; money, with defined interest and costs; and leverage, through summary judgment and asset disclosure.[1]

The creditor's new map of forums

The starting point is now a forum decision. A debt under a sale, supply, service, construction or similar contract belongs in the Commercial Court; a loan owed to a bank or financial institution belongs in the Artha Rin Adalat; a dishonoured cheque opens a parallel criminal route; and a company that will not pay an undisputed debt can face a winding-up petition. Good commercial debt recovery in Bangladesh combines these routes rather than choosing one by habit.

Which court hears your debt claim

Section 2 of the Act defines a commercial dispute by reference to listed subject matters and then excludes two classes: matters within the original jurisdiction of the High Court Division, and matters within the jurisdiction of the Artha Rin Adalat.[1] Everything in a debt recovery strategy flows from those two sentences.

Trade creditors, suppliers and service providers

The listed categories that matter most to creditors are the ordinary transactions of merchants, bankers, financial institutions and traders, including the enforcement and interpretation of mercantile documents; export and import of goods or services; carriage of goods; construction and infrastructure contracts and related tenders; distribution and licensing agreements; management and consultancy agreements; and contracts for the sale of goods or the provision of services.[1]

Two explanations in the definition close common defence arguments. A dispute does not become an ordinary civil dispute merely because immovable property was given as security, or because one party is the government, a government body or a private body providing public services.[1] A contractor owed money by a state entity, or a creditor holding a mortgage, can therefore still use the Commercial Court.

Banks and financial institutions

Section 5 of the Artha Rin Adalat Ain 2003 requires every suit by a financial institution to recover a loan to be filed in and decided by the Artha Rin Adalat, notwithstanding any other law.[4] The definition of financial institution is wide: it covers Bangladesh Bank, state-owned and scheduled banks, financial institutions licensed under the Financial Institutions Act 1993, specialised state lenders and listed multilateral lenders such as the IFC and ADB.[4]

The definition of loan is equally wide. It includes advances, cash credit, overdrafts, discounted bills and Shariah-based investments, and also guarantees, indemnities and letters of credit, together with lawful interest and charges.[4] A bank's claim against its customer for a crystallised LC liability or a paid-out guarantee is therefore loan recovery, not a commercial dispute. Mortgage suits for sale or foreclosure by financial institutions also go to the Artha Rin Adalat.[4]

Where the line blurs

The exclusion works one way. It catches suits by financial institutions to recover loans, not every dispute involving a bank. A beneficiary suing a bank on a guarantee or a supplier claiming under a documentary credit has no loan to recover and will normally sit in the Commercial Court, as will a lender that is not a financial institution under the 2003 Act, such as a group company or an overseas parent. Where state-owned specialised lenders hold small claims, the Ain also preserves a certificate route under the Public Demands Recovery Act 1913 for claims up to Tk 5 lakh, explained in our Public Demands Recovery Act guide.[4]

No pecuniary threshold, but territory matters

The Ordinance text sets no minimum or maximum claim value; jurisdiction depends on subject matter and on the territorial jurisdiction fixed for each court, and our review of the Act confirms the same position.[1] A Tk 3 lakh invoice and a multi-crore construction claim go to the same forum. What does matter is territory: each Commercial Court hears disputes arising within the area fixed by notification, and the three Dhaka metropolitan courts are divided by police-station areas.[2] Check the notification against the place of contracting, performance and payment before drafting the plaint.

The table compares the main routes for commercial debt recovery in Bangladesh. On a phone, scroll it sideways.

Before you file: limitation, demand and evidence

Most creditors lose recoverable money before they reach a courtroom, through limitation, a careless demand letter or an incomplete file. The Commercial Courts Act changes none of these; the general law still governs.

Limitation: the three-year trap

Section 3 of the Limitation Act 1908 requires every suit filed after the prescribed period to be dismissed, even if limitation is not raised as a defence.[11] Section 5, which lets a court admit a late filing for sufficient cause, applies to appeals and certain applications, not to suits.[11] A late plaint cannot be rescued by explaining the delay.

The High Court Division showed how this plays out in a 2024 revision. A claimant sued for compensation in a money suit after its contract was terminated on 15 October 2015, but filed only on 4 November 2019. Applying Article 115 of the First Schedule, which gives three years for compensation for breach of contract, the Court held the suit time-barred, set aside the trial court's order and rejected the plaint.[12] Treat three years from the breach or due date as the outer limit for most commercial money claims unless advice on the specific article says otherwise.

Acknowledgments and part payments restart time

Section 19 of the Limitation Act gives a fresh period from the date of a written acknowledgment of liability signed by the debtor or its authorised agent, provided it is made before the period expires. The acknowledgment can be sufficient even if it does not state the exact amount, says payment is not yet due, refuses payment or claims a set-off.[11] Section 20 gives a fresh period from a payment on account of the debt, provided the payment is acknowledged in the handwriting of, or a writing signed by, the payer.[11]

Every negotiation is therefore also evidence gathering. A signed reconciliation statement or payment plan letter can extend limitation and later support summary judgment, so ask for them in writing and keep the signed originals.

The letter of demand

Bangladesh law does not make a pre-action demand a general precondition for a money suit, but a properly drafted demand does real work. It fixes the date from which the dispute arose, which matters because the Commercial Court may award pre-judgment interest from that date at the contract rate or a rate it fixes.[1] It also invites the acknowledgment that protects limitation. State principal and interest, give a short deadline and avoid concessions. Our guide to legal notices in Bangladesh covers drafting and service.

Building the documentary file

The Commercial Court can decide a suit on affidavits and documents without oral evidence.[1] Assemble the contract, purchase orders, delivery challans or completion certificates, invoices, the statement of account, every acknowledgment and the demand correspondence, and prepare the interest calculation now.

Mandatory mediation: what is compulsory and what is not

Creditors are often told that mediation is now mandatory. The position is more precise, and it differs between the two forums.

Commercial Courts: pre-suit mediation depends on rules

Section 7(1) requires a plaintiff to follow the pre-suit mediation procedure prescribed by rules, but only where the suit does not involve urgent interim relief and only if such rules exist when the suit is filed.[1] We have not located any published rules prescribing that procedure as at October 2026, so the obligation is not yet operative. That can change by a single gazette notification, so check the position on the day of filing. A creditor seeking attachment or an injunction should plead the urgency expressly, which takes the suit outside section 7(1) in any event.

Commercial Courts: mediation during the suit

After filing and before judgment, the court may permit mediation if both parties consent, using a panel mediator or another suitable mediator with the court's permission. Mediation must be completed within thirty days, extendable by a further thirty days. A written settlement signed by all parties and the mediator is treated as a decree once the court is satisfied no third party's interest is harmed, and the Commercial Court enforces it.[1] For a creditor, that makes a mediated payment plan as enforceable as a judgment.

Artha Rin Adalat: court-referred mediation

In the loan court, section 22 of the Artha Rin Adalat Ain 2003 lets the court, after the written statement, refer the case to mediation through the parties' lawyers or a neutral such as a retired judge or banker. The parties must name the mediator within ten days or the court appoints one, and mediation must be completed within sixty days, extendable by up to thirty days.[4]

A mediated settlement order is final and not open to appeal or revision, and the court issues a certificate allowing the plaintiff to recover the court fee paid on the plaint.[4] Under section 23 the parties may also opt for mediation at any stage before judgment, but this does not extend the statutory disposal deadlines.[4]

Using mediation tactically

Mediation helps most when the debtor can pay only over time. Bring draft terms with an acceleration clause, default interest and consent to decree, and never let talks run past limitation: file first and mediate within the suit.

Procedure and timelines for a commercial debt claim

The Code of Civil Procedure remains the default procedure in the Commercial Court except where the Act makes special provision.[1]

The plaint and early scrutiny

Where interest is claimed, the plaint must contain full particulars of the interest claim in addition to the ordinary requirements of Order VII, rule 1. The court may also reject a plaint at any time if satisfied, after hearing the parties, that the suit is not maintainable.[1] Draft the plaint as if it will be tested immediately, because it may be.

The suit management hearing

On the first hearing date after the written statement, the court holds a suit management hearing. It identifies the issues, separates fact from law, decides whether the case can be determined on documents, fixes which issues need oral evidence, sets the number of witnesses and fixes the stages of the suit and their timing.[1] Ask the court to decide liability on the documents.

Three adjournments and the ninety-day final hearing

Before the final hearing each party may seek time no more than three times, on cause shown and on payment of reasonable costs. Once the court fixes the final hearing, it must be completed within ninety days. A party whose deliberate act or negligence causes delay can be ordered to pay costs and barred from participating until it pays, with unpaid costs added to the decree.[1] These rules remove the debtor's traditional weapon, which was time.

Summary judgment: the creditor's fastest route

After summons has been served, any party may apply for summary judgment. If the court finds the application admissible, it must fix a hearing within fifteen days of filing. It may then give judgment on the pleadings and documents where the defendant has no prospect of proving its defence and no oral evidence is needed.[1]

Summary judgment suits the classic unpaid invoice: goods accepted, invoices undisputed, a balance acknowledged in writing. Where part of the claim is genuinely disputed, apply for judgment on the undisputed portion and let the balance go to trial.

Interest and costs

Unless the parties agreed otherwise, a money judgment may carry interest from the date the dispute arose to judgment at the contract rate or, absent one, at a rate fixed by the court, and from judgment to payment at 2% per annum above the prevailing Bangladesh Bank rate unless the judgment orders otherwise.[1] The losing party generally pays the winner's costs, including court fees, lawyers' fees and witnesses' expenses, subject to the court's power to reduce or refuse costs.[1] Keep fee records from day one.

Securing the debt before judgment

A judgment against an empty company is worth nothing. In commercial debt recovery in Bangladesh, the time to protect recovery is at filing, while assets are still visible.

Attachment before judgment

Order XXXVIII, rule 5 of the Code of Civil Procedure allows a court to attach a defendant's property before judgment where the defendant is trying to obstruct or delay execution. The High Court Division's December 2024 decision in a Dhaka supply dispute is a useful model for creditors: the plaintiff sought to attach bills payable to the defendants by a third party, the trial court refused because the bills were described vaguely, and the High Court Division, finding the record sufficient, set that order aside and directed the trial court to attach the bills.[13]

Receivables owed to the debtor by its own customers can therefore be attached, and specificity wins: name the third-party payer, the bill and the amount.

Where a debtor is diverting assets, a temporary injunction may be needed alongside attachment, and pleading that urgency keeps the suit outside pre-suit mediation.[1] See our guide to interim remedies in Bangladesh.

Cheques, guarantees and security instruments

Many trade debts are backed by security cheques or bank guarantees. A dishonoured cheque gives a separate criminal route; see our guides to cheque dishonour and security cheque cases. Call a guarantee strictly on its terms, as our bank guarantee encashment guide explains.

Bank and financial institution recovery under the Artha Rin Adalat Ain 2003

For lenders, the 2026 reform changes less than headlines suggest: loan recovery and the creditor-friendly features of the Artha Rin Adalat remain in place.

Exclusive jurisdiction and the scale of the backlog

Bangladesh Bank data reported in December 2025 showed 222,341 cases pending in the money loan courts, with Tk 407,435 crore of defaulted loans under litigation, and recoveries running far below new filings.[8] The same reporting noted that Bangladesh Bank had directed lenders to act under section 12(3) of the Ain to speed up recovery.[8] A lender's strategy therefore has to work despite delay, not assume it away.

Sell collateral first: section 12

Before suing on a loan secured by a lien or pledge, a financial institution must sell the property it holds. Where it holds mortgaged immovable property or hypothecated movables with a power of sale, it must sell, or try and fail to sell, before filing.[4] The institution may seek the help of the District Magistrate to recover possession for sale, and a valid sale passes good title that cannot be challenged, leaving the borrower a claim for compensation for procedural irregularity.[4] Where collateral is not sold, the court deducts its assessed value from the claim.[4]

Statutory timelines

The Ain sets hard timelines on paper. A suit should be disposed of within thirty days of service where the defendant does not appear, or within ninety days of the written statement where it does, extendable once by thirty days for recorded reasons.[4] The final hearing may be adjourned only once on a party's application, with further adjournments only on a deposit of Tk 1,000 to Tk 3,000, and judgment is due within ten days of the close of evidence or arguments.[4]

Hurdles for defaulting borrowers

Three provisions shift leverage toward lenders. A borrower cannot sue the institution under the Ain on the loan, and cannot raise set-off or a counterclaim.[4] A defendant seeking to set aside an ex parte decree must apply within thirty days and deposit 10% of the decretal amount within fifteen days of filing, failing which the application is dismissed.[4] And an appeal requires a deposit of 50% of the decretal amount; where the decree is below Tk 50 lakh, the appeal lies to the District Judge rather than the High Court Division.[5]

Reform on the horizon

In January 2026 the law ministry declined a Bangladesh Bank draft for an entirely new money loan court law, which had proposed an appellate court, recovery officers and sanctions such as suspension of defaulters' passports, and asked for targeted amendments to the 2003 Ain instead.[9] The Bangladesh Bank Governor has since said steps are being taken to amend the Ain to speed up disposal of default loan cases.[10] No amendment had been enacted when this guide was updated. Our Bangla readers can also consult our Artha Rin Adalat guide in Bangla.

Enforcement: turning a decree into cash

A decree is a step, not a result, so enforcement planning should begin before filing.

Commercial Court decrees

Execution of a Commercial Court decree follows the Code of Civil Procedure, but the Act adds a disclosure tool. To identify the judgment debtor's property, the court may order the debtor to provide information and may direct any government or private person or authority to assist.[1] Use it to reach bank balances, land records and share registers. Our execution case guide covers attachment, sale and arrest under the Code.

Artha Rin execution and its time limits

Execution in the loan court has its own limitation rules. Under section 28(3) and (4), a second or subsequent execution case must be filed within one year of the disposal of the previous one, and no new execution case may be filed more than six years after the first was filed. The High Court Division applied both limits in a January 2024 revision brought by a state-owned bank, upholding dismissal of a late execution case.[6]

Section 34 allows the court to order civil detention of a judgment debtor for up to six months to compel payment. In May 2024 the High Court Division held that the court must specify the period of detention, and that a bare arrest warrant without such an order is unlawful.[7]

Winding up as leverage

Against a corporate debtor, a winding-up petition under sections 241 and 242 of the Companies Act 1994 can be the most effective pressure available. In September 2025 the High Court Division ordered the winding up of a telecom company that had failed to pay undisputed invoices despite written promises to clear them, restating that a winding-up petition is a legitimate way to enforce a just debt and that a debt for this purpose must be a definite amount.[14] The corollary is that a genuinely disputed or unascertained claim belongs in the Commercial Court first. See our guide to winding up a company in Bangladesh for the procedure.

Arbitration awards and foreign creditors

Where the contract contains an arbitration clause, arbitration remains the primary forum and the Commercial Court becomes the supervisory and enforcement court, since arbitration agreements, proceedings and awards under the Arbitration Act 2001 are a listed category.[1] Foreign creditors holding an award made abroad should read our guide to foreign arbitral award enforcement in Bangladesh before choosing where to enforce.

Lender strategy for commercial debt recovery in Bangladesh

• Classify the claim. Loans, LC liabilities and guarantee pay-outs owed by the customer go to the Artha Rin Adalat; other bank disputes go to the Commercial Court.
• Exhaust section 12 first. Sell pledged and hypothecated collateral, or document a failed attempt, before filing.
• Join every obligor. Third-party mortgagors and guarantors are joined as defendants and decrees are joint and several.[4]
• Oppose delay. Hold the court to the section 17 timelines and insist on the statutory deposits.
• Diary execution limits. One year between execution cases and six years overall leave no margin.

Supplier strategy: from unpaid invoice to payment

Suppliers, contractors and service providers are the main beneficiaries of the Commercial Courts Act. This is the sequence we use.

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Cross-border suppliers should also check whether the contract chose a foreign court or arbitral seat, and appoint a Bangladeshi representative under a legalised power of attorney early.

Mistakes to avoid in commercial debt recovery in Bangladesh

• Letting limitation run during talks. Negotiation does not stop time. Obtain a signed acknowledgment or file first.
• Choosing the wrong forum. A bank filing a loan claim in the Commercial Court, or a supplier filing a trade debt as an ordinary suit where a Commercial Court exists, loses months.
• Omitting interest particulars. The Act requires them in the plaint, and pre-judgment interest runs from when the dispute arose.
• Leaving assets unsecured. Apply to attach identified receivables and property at filing, with specific particulars.
• Treating a winding-up petition as a collection letter. It works for a definite, undisputed debt; a disputed claim invites dismissal and costs.
• Ignoring execution deadlines. Artha Rin execution cases carry their own one-year and six-year limits.

Most of these mistakes happen in the first month of a dispute, which is why early advice on commercial debt recovery in Bangladesh usually saves more than it costs.

What to watch for the rest of 2026

Three developments could change the analysis. The first is amendment of the Commercial Courts Act: in May 2026 the Law Minister, Md Asaduzzaman, said the Act had been passed in haste, that regulatory, tax, labour and criminal issues faced by investors were largely absent, and that the government would bring amendments; he also said the Arbitration Act 2001 needed reform.[3] A former Dhaka Chamber president cited World Bank data putting average contract enforcement time at 1,442 days.[3]

The second is rules under the Act, in particular the pre-suit mediation procedure and panel mediator rules, which would make section 7(1) operative.[1] The third is amendment of the Artha Rin Adalat Ain 2003, which both the law ministry and Bangladesh Bank have signalled.[9] [10] Until any of these is gazetted, the framework in this guide applies, and TRW's banking and finance litigation team tracks each change as it happens.

Frequently asked questions

Which court hears an unpaid supplier invoice in Bangladesh in 2026?

The Commercial Court with territorial jurisdiction, because contracts for the sale of goods or provision of services are a listed commercial dispute. Seventy-five Commercial Courts were notified in February 2026.[1] [2]

Is there a minimum claim value for the Commercial Courts?

No. Jurisdiction depends on the subject matter of the dispute and on territory, not on the amount claimed, so small and large commercial debts go to the same court.[1]

Can a bank recover a loan in the Commercial Court?

No. Matters within the Artha Rin Adalat's jurisdiction are excluded, and section 5 of the Artha Rin Adalat Ain 2003 requires loan recovery suits by financial institutions to be filed in that court.[1] [4]

How long do I have to sue for an unpaid commercial debt?

For most contract money claims, three years under the First Schedule to the Limitation Act 1908, and a late suit must be dismissed. A written acknowledgment or an acknowledged part payment before expiry starts a fresh period.[11] [12]

Is mediation compulsory before filing a commercial debt claim?

Only if rules prescribing a pre-suit mediation procedure exist when the suit is filed, and never where urgent interim relief is sought. We had not located such rules as at October 2026.[1]

How fast is summary judgment in the Commercial Court?

Once an application is found admissible, the court must fix a hearing within fifteen days of filing, and may give judgment on the papers where the defendant has no prospect of proving its defence.[1]

What interest can a creditor recover on a Commercial Court judgment?

Unless otherwise agreed, pre-judgment interest at the contract rate or a court-fixed rate from when the dispute arose, and post-judgment interest at 2% above the Bangladesh Bank rate unless the judgment orders otherwise.[1]

Can I freeze a debtor's receivables before judgment?

Yes, through attachment before judgment under Order XXXVIII, rule 5 of the Code of Civil Procedure, which courts have applied to bills payable to the debtor by third parties when the application identifies them specifically.[13]

What must a borrower deposit to appeal an Artha Rin decree?

Fifty per cent of the decretal amount. Where the decree is below Tk 50 lakh, the appeal lies to the District Judge.[5]

Can I wind up a company that will not pay my invoice?

Where the debt is a definite, undisputed sum and the company has neglected to pay, the High Court Division can order winding up, as it did in September 2025. A genuinely disputed claim should go to the Commercial Court first.[14]