International Commercial Arbitration in Bangladesh 2026: A Guide for Foreign and Bangladeshi Parties

International commercial arbitration in Bangladesh: what cross-border parties need to know

International commercial arbitration in Bangladesh is where most cross-border contract risk is finally priced. Power purchase agreements, EPC contracts, PPP concessions, supply and distribution deals, shipping contracts and joint ventures with a Bangladeshi party almost always end with an arbitration clause. Whether that clause works when a dispute arrives depends on decisions taken at signing: whether the arbitration is international in the statutory sense, where it is seated, which institution administers it, which law governs, and how any award will be turned into money in Dhaka.

This guide is written for foreign investors, lenders and contractors dealing with Bangladeshi counterparties, and for Bangladeshi companies negotiating with foreign partners. It explains how the Arbitration Act 2001 defines an international dispute, the real trade-offs between a Dhaka seat and Singapore, London or Dubai, the leading institutions, governing law and language, the sharp limits on court interim relief for foreign-seated arbitration after Accom Travels, the special risks of contracting with state-owned entities, and the enforcement path for a foreign award in 2026.

Summary: An arbitration is international under Bangladeshi law when at least one party is foreign by nationality, residence, incorporation, management or government status. The seat then decides almost everything else: a Dhaka seat brings the full Arbitration Act 2001 and High Court Division support, while a foreign seat leaves only the foreign award enforcement provisions and, after Accom Travels, no court interim relief in Bangladesh until the enforcement stage.

Key point: Two High Court Division judgments of 12 July 2026 confirmed that section 7A interim relief is still unavailable in support of a Singapore-seated arbitration, while a judgment of 9 July 2026 enforced a London award and held the grounds for refusing a foreign award to be limited and exhaustive. Seat choice is now a decision about interim protection as much as neutrality.

At a glance

Swipe or scroll →

Table of Contents

When an arbitration is international under Bangladeshi law

The starting point for international commercial arbitration in Bangladesh is the definition in section 2(c) of the Arbitration Act 2001. An arbitration is an international commercial arbitration where the dispute arises from a legal relationship considered commercial under Bangladeshi law and at least one party is: an individual who is a national of, or habitually resident in, a country other than Bangladesh; a body corporate incorporated outside Bangladesh; a company, association or body of individuals whose central management and control is exercised outside Bangladesh; or the government of a foreign country.[1] [2]

Nationality, not geography

The Bangladeshi test departs from the UNCITRAL Model Law. Internationality turns on who the parties are, not on where they do business or where the contract is performed.[2] Two Bangladeshi companies building a plant abroad may therefore fall outside the definition, while a Dhaka distribution contract signed with a Singapore-incorporated supplier falls squarely within it. The practical lesson for group structures is that the contracting entity matters. A foreign parent that signs through a locally incorporated subsidiary should not assume that the subsidiary's contracts are international.

Foreign-owned local companies

The "central management and control" limb is where arguments arise. A Bangladeshi-incorporated project company with foreign shareholders may contend that its management and control sit abroad. That contention was advanced in 2026 by a foreign-owned project company in a PPP dispute with RAJUK, relying on section 2(c)(iii), although the High Court Division decided the case on other grounds.[5] Where the classification matters, record the facts that support it: where the board meets, where strategic decisions are taken and who controls the company in substance.

Why the label matters

Classification is not academic. For an international commercial arbitration seated in Bangladesh, applications for interim measures under section 7A go to the High Court Division rather than the District Court, and where the parties' appointment mechanism fails, arbitrators are appointed by the Chief Justice or a Supreme Court judge he nominates rather than by the District Judge.[1] [9] For a foreign party, that means a more senior court supervising the process at each pressure point.

How the seat shapes international commercial arbitration in Bangladesh

The seat is the legal home of the arbitration. It decides which courts supervise the tribunal, which law governs challenges to the award and, in Bangladesh, how much of the Arbitration Act 2001 applies at all. Section 3 provides that the Act applies where the place of arbitration is in Bangladesh; where the seat is abroad, only sections 45, 46 and 47 on recognition and enforcement of foreign awards apply.[1] [2]

The High Court Division has treated an international commercial arbitration seated outside Bangladesh as a foreign arbitration, in Southern Solar Power v Bangladesh Power Development Board.[2] The parties may still hold hearings elsewhere: section 26 lets the tribunal meet at any convenient place for hearings, deliberations or inspections without moving the legal seat.[1] A Singapore-seated case can be heard in Dhaka, and a Dhaka-seated case can be heard in Singapore.

The case for a Dhaka seat

A Dhaka seat gives a party the whole toolkit of the Act: court interim relief under section 7A, a statutory stay of court proceedings under section 10, court support for appointments, and a set-aside regime with a sixty-day challenge window.[1] [2] Costs are generally lower, local counsel and witnesses are at hand, and the award is enforced as a decree once the challenge window closes. For contracts where the assets, the counterparty and the project are all in Bangladesh, and where the foreign party is comfortable with local supervision, a Dhaka seat can be a rational choice.

The case for Singapore, London or Dubai

A foreign seat buys neutrality and a supervisory court with deep arbitration experience. That matters most where the counterparty is a state entity or a politically connected group. The cautionary precedent is Saipem v Bangladesh. In an ICC arbitration seated in Dhaka under a contract with Petrobangla, Bangladeshi courts revoked the tribunal's authority, and the resulting award was later treated as a nullity. An ICSID tribunal held in an award of 30 June 2009 that this court intervention amounted to an expropriation and breached Article II(1) of the New York Convention.[8]

The trade-off nobody mentions at signing

The cost of a foreign seat is felt in Bangladesh. Once the seat is abroad, Bangladeshi courts will not grant interim relief in support of the arbitration and will not apply the statutory stay, at least until the law changes.[2] A foreign party seeking to freeze assets in Dhaka, or a Bangladeshi party seeking to stop a bank guarantee being called, may find that the only protective forum is the tribunal itself or an emergency arbitrator. The seat decision must therefore be made with a view on where the assets are and what urgent relief might be needed.

Interim relief and foreign-seated arbitration after Accom Travels

Section 7A of the Arbitration Act 2001, added in 2004, allows the court to grant interim orders before or during arbitral proceedings and until an award is enforced, unless the parties agree otherwise. For international commercial arbitration the application is made to the High Court Division.[1] The unresolved question has been whether that power extends to a foreign-seated arbitration.

What Accom Travels decided

In Accom Travels and Tours Limited v Oman Air SAOC, reported at 27 BLC (2022) 596, a Larger Bench of the High Court Division held by a 2:1 majority on 12 December 2021 that sections 7, 7A and 10 do not apply where the seat is outside Bangladesh, with the single exception that section 7A interim measures may be granted at the stage of enforcing a foreign award.[5] [2] The court stayed the Bangladeshi suit pending the arbitration in Oman, relying on its inherent power under section 151 of the Code of Civil Procedure rather than on section 10.[2]

The 12 July 2026 judgments

On 12 July 2026 the High Court Division dismissed two section 7A applications in support of Singapore-seated arbitrations. In Legend World Tank Pte Ltd v Multinational Shipping Co Ltd, a SIAC arbitration, the court vacated an interim order it had earlier granted.[4] In SVC Jhilmil Residential BD Limited v RAJUK, a foreign-owned project company sought to restrain termination of a PPP contract and encashment of a Tk 100 crore performance guarantee; the application was rejected as not maintainable.[5]

The significance lies in the reasoning. The judge said he was unable to subscribe to Accom, noting that it did not consider the Appellate Division's decisions in the ECOM litigation, which treated the earlier Unicol line of authority as overruled pro tanto. He nevertheless held that a single bench is bound by a Larger Bench decision and that only the Appellate Division or a bench of equal or greater strength can revisit it.[4] [5] The door is open to a challenge, but for now it is shut.

Protecting your position in practice

Parties choosing a foreign seat should plan for the gap rather than hope a court will fill it. Section 21 lets a tribunal order interim measures and a party may ask the court to enforce them, but the Act has no emergency arbitrator provisions and the reach of section 21 in a foreign-seated case is uncertain after Accom.[1] [2] Institutional rules with fast emergency procedures help. So does contractual protection: security packages, escrow, step-in rights, guarantee wording with clear demand conditions, and a carve-out allowing either party to seek urgent relief from the courts of the place where assets are located. Our note on whether a performance guarantee can be stopped explains the bank-guarantee angle.

Choosing an institution: BIAC, SIAC, ICC and LCIA

Bangladeshi law leaves the choice of institution to the parties, whether the seat is in Bangladesh or abroad. ICC, SIAC and ICSID are the international bodies most commonly chosen by Bangladeshi parties, and the UNCITRAL Rules are widely used for ad hoc cases.[2] The right institution depends on the value of the contract, the identity of the counterparty, the seat and how much the parties will need emergency relief.

Bangladesh International Arbitration Centre

BIAC, established in 2011,[2] administers domestic and international cases under the BIAC Arbitration Rules 2019. It offers a fast-track procedure for disputes up to Tk 50 million, with awards generally due within three months.[10] BIAC is the natural choice for a Dhaka-seated international commercial arbitration where cost discipline and local enforcement matter more than a neutral venue. It brings administrative structure, a fee schedule and a panel to what would otherwise be an ad hoc case, which reduces the scope for procedural obstruction.

SIAC

Singapore is a frequent foreign seat in Bangladeshi cross-border contracts, usually paired with SIAC. The seventh edition of the SIAC Rules took effect on 1 January 2025. It introduced a streamlined procedure for disputes up to S$1 million with a three-month award timetable, ex parte preliminary orders from an emergency arbitrator, a preliminary determination procedure and mandatory disclosure of third-party funding.[11] For a party that cannot count on Bangladeshi courts for interim relief, a fast and credible emergency arbitrator matters.

ICC and LCIA

The ICC is often specified by state entities, lenders and large contractors, and its scrutiny of draft awards adds a layer of quality control. The LCIA, usually paired with a London seat, is common in shipping, trade finance and English-law contracts. London's position changed on 1 August 2025, when the English Arbitration Act 2025 came into force. For arbitrations begun after that date, the law of an arbitration agreement defaults to the law of the seat unless the parties expressly choose otherwise, reversing the Enka v Chubb approach.[12]

Dubai and legacy DIFC-LCIA clauses

Dubai remains attractive for Gulf-linked trade and remittance-heavy businesses. Older contracts need checking: Dubai Decree No. 34 of 2021 abolished the DIFC-LCIA Arbitration Centre, transferring its role to the Dubai International Arbitration Centre, which issued new rules in March 2022. Courts in different jurisdictions have reached different views on DIAC awards rendered under old DIFC-LCIA clauses.[13] Any Bangladeshi contract still naming the DIFC-LCIA should be amended by agreement before a dispute arises.

Governing law, language and foreign counsel

Three further choices shape any international commercial arbitration in Bangladesh: the law that decides the merits, the law of the arbitration agreement, and the people and language through which the case is run.

Law governing the contract

For a Dhaka-seated case, section 36 requires the tribunal to decide in accordance with the rules of law the parties choose. If they make no choice, the tribunal applies the rules of law it considers appropriate given the conflict-of-laws position.[9] English law is common in finance and shipping, Singapore law in Asian supply chains, and Bangladeshi law in contracts with government bodies, which often insist on it. Whatever the choice, mandatory Bangladeshi rules continue to bite on performance in Bangladesh, including foreign exchange controls, tax and sector licensing. Our guide to receiving foreign currency in Bangladesh covers the remittance side of any award.

Law governing the arbitration agreement

Bangladeshi courts will give effect to an express choice of law for the arbitration agreement. Without one, the governing law of the main contract is likely to apply, and failing that the law of the seat.[2] Because England now defaults to the law of the seat, a London-seated contract governed by Bangladeshi law could see the two systems pull in different directions. The simplest fix is to state the law of the arbitration agreement expressly. Our analysis of arbitration agreement enforceability in Bangladesh covers validity in more depth.

Language of the proceedings

The Act leaves procedure, including the language of the proceedings and translation of documents, to the parties, with the tribunal deciding if they do not agree.[1] English is the norm in cross-border contracts. Choose it expressly, and require translations of any Bangla documents to be certified. At the enforcement stage, an award or agreement in a language other than English or Bangla must be accompanied by an English translation certified by a diplomatic or consular agent or in another manner sufficient under Bangladeshi law.[2]

Foreign counsel and arbitrators

Section 31 allows a party to be represented by a lawyer or any other person it chooses, unless the parties agree otherwise.[1] There is no requirement that the representative be admitted to the Bangladesh Bar, in either domestic or international cases.[2] Foreign counsel can therefore lead in a Dhaka-seated arbitration, though local counsel remain essential for court applications, evidence of Bangladeshi law and enforcement. Parties often agree that a sole or presiding arbitrator should be of a nationality different from the parties.

International disputes with Bangladeshi state-owned counterparties

A large share of international commercial arbitration in Bangladesh involves a government body or state-owned enterprise: power purchasers, gas and petroleum corporations, port and development authorities and utilities. These contracts carry particular risks that the dispute clause must address.

Immunity and enforcement

The Arbitration Act 2001 contains no provision allowing the state or a state entity to plead sovereign immunity at the enforcement stage.[2] That is helpful, but it does not guarantee payment. Execution against public assets, the budget process and foreign-exchange approvals can still slow recovery in practice. A sovereign guarantee, a waiver of immunity from suit and execution, and an express undertaking to pay any award promptly are standard protections.

Sector rules and approvals

Some disputes are diverted by statute. Section 40 of the Bangladesh Energy Regulatory Commission Act 2003, for example, sends certain disputes between licensees, and between licensees and consumers, to the Commission.[2] Section 3(3) of the Arbitration Act preserves other laws that bar particular disputes from arbitration.[2] Before relying on an arbitration clause with a public body, confirm that the body had authority to sign it and that no sector law overrides it.

Investment treaty protection

Foreign investors have a second layer of protection. Bangladesh ratified the ICSID Convention in 1980 and has signed 33 bilateral investment treaties, 25 of them in force; key treaty partners include the United Kingdom, the United States, China, Germany, Japan and India. The Foreign Private Investment (Promotion and Protection) Act 1980 offers domestic guarantees, but does not itself refer investors to international arbitration.[7] Treaty claims have featured in Saipem, Chevron and the Niko cases.[7] Structuring the investment through a treaty-protected jurisdiction is worth considering at the outset, and our note on unpaid infrastructure project claims covers the commercial side.

International disputes involving Bangladeshi companies abroad

International commercial arbitration in Bangladesh is not only a foreign investor's tool. Bangladeshi exporters, garment manufacturers, shipowners, contractors and importers are regularly respondents, and sometimes claimants, in arbitrations seated in Singapore, London or elsewhere. The 9 July 2026 judgment in South Express Ltd v Madina Enterprise shows how a London award in a vessel-sale dispute can come home to be enforced against a Bangladeshi party years later.[6]

Do not ignore a foreign notice of arbitration

The most expensive mistake a Bangladeshi company can make is to treat a foreign notice of arbitration as something that cannot touch it at home. The enforcing court in Dhaka does not reopen the merits. The burden is on the party resisting enforcement to prove one of the limited statutory grounds, and arguments that could have been run before the tribunal will rarely succeed later.[6] Participate, or at least object to jurisdiction formally and on time, and keep evidence of any defect in notice or appointment.

Parallel proceedings in Bangladesh

A Bangladeshi party sometimes files a local suit to pre-empt a foreign arbitration. After Accom Travels, the statutory stay under section 10 is not available for foreign-seated clauses, but the court may stay the suit under its inherent power.[2] The foreign party should apply promptly and should not take steps in the suit that could be treated as waiving the arbitration agreement. For broader contract strategy, see our guide to breach of contract in Bangladesh.

Enforcing a foreign award in Bangladesh

Every international commercial arbitration in Bangladesh with a foreign seat ends in the same place: an application under section 45. Bangladesh acceded to the New York Convention on 6 May 1992, without reservations, and the Convention entered into force for it on 4 August 1992.[3] A foreign award is binding for all purposes and may be relied on as a defence or set-off, and on application it is enforced by execution by the District Court in Dhaka as if it were a decree of that court.[2]

What the applicant must file

The application must include the original award or a duly authenticated copy, the original arbitration agreement or a certified copy, and evidence that the award is a foreign award, together with a certified English translation where needed.[2] Practitioner guides report stamp duty on the award at 0.5 per cent of its value, subject to a cap of Tk 40,000.[9] Enforcement typically takes around 12 to 24 months.[10]

Narrow grounds for refusal

Section 46 sets out grounds for refusal that track the New York Convention, including incapacity, invalidity of the agreement, lack of proper notice, excess of mandate, irregular composition or procedure, an award set aside at the seat, non-arbitrability and public policy.[2] In South Express, the High Court Division held that the District Judge had exceeded his jurisdiction by purporting to annul a London award, described the grounds as "limited and exhaustive", and held that foreign awards are to be enforced save in exceptional circumstances.[6] Public policy is read narrowly, following the Appellate Division's "patent illegality" test.[2]

Appeals and interim protection at enforcement

An order on enforcement can be appealed to the High Court Division under section 48, as happened in South Express.[6] Importantly, Accom Travels left section 7A interim relief available at the enforcement stage of a foreign award, so an award creditor can seek to preserve assets once enforcement is under way.[2] Asset tracing, translation and authentication should be prepared before the award is issued, not after.

Dhaka seat or foreign seat: a side-by-side comparison

The table below compares the practical consequences of a Dhaka seat with the main foreign alternatives for international commercial arbitration in Bangladesh. On a phone, scroll it sideways.

There is no universal answer. A foreign seat suits high-value contracts with state entities, where neutrality and treaty-grade protection outweigh the loss of local interim relief. A Dhaka seat under BIAC suits mid-value private contracts where the assets are local and speed of enforcement matters. Whichever is chosen, the clause should state the seat, institution, rules, number of arbitrators, language and law of the arbitration agreement in terms that leave nothing to argue about. Our international arbitration practice advises on this choice for both foreign and Bangladeshi parties.

Running international commercial arbitration in Bangladesh: a practical sequence

Whether you are negotiating a contract or responding to a dispute, the same disciplined sequence protects your position.

Swipe or scroll →

Two points cut across every step. Diary every deadline, including the sixty-day challenge window for a Dhaka-seated award, and keep settlement discussions without prejudice so that a negotiated outcome remains possible alongside the arbitration.[2] Our overview of alternative dispute resolution in Bangladesh covers mediation steps that can sit before arbitration.

What to watch in 2026

Three developments will shape international commercial arbitration in Bangladesh over the next year. First, the commercial courts: the Commercial Courts Act, passed by parliament in April 2026, is meant to speed up commercial litigation and court support for arbitration, though the Law Minister, Md Asaduzzaman, has acknowledged gaps that the government intends to address.[14] Second, reform of the Arbitration Act 2001 itself. The Minister has said its limitations "can be fixed easily", but no amending legislation had been published at the time of writing.[14] [2]

Third, the status of Accom Travels. The 2026 judgments make plain that the current position is doctrinally contested, and a reference to a Larger Bench or a ruling of the Appellate Division could restore court support for foreign-seated arbitration.[4] Until then, contracts should be drafted on the assumption that a foreign seat means no Bangladeshi interim relief before enforcement. If you are negotiating a cross-border contract or facing a dispute, contact TRW for advice on seat, institution and enforcement strategy.

Frequently asked questions

What is international commercial arbitration under Bangladeshi law?

Under section 2(c) of the Arbitration Act 2001, it is an arbitration of a commercial dispute where at least one party is a foreign national or resident, a foreign-incorporated body, a body managed and controlled abroad, or a foreign government.[1] [2]

Does the Arbitration Act 2001 apply to an arbitration seated in Singapore?

Only in part. Where the seat is outside Bangladesh, only sections 45 to 47 on recognition and enforcement of foreign awards apply.[1] [2]

Can a Bangladeshi court grant an injunction in support of a foreign-seated arbitration?

Not before or during the arbitration under current law. Accom Travels held section 7A unavailable for foreign-seated cases except at the enforcement stage, and the High Court Division followed it on 12 July 2026 while questioning its reasoning.[4] [5]

Who appoints arbitrators if the parties cannot agree?

In an international commercial arbitration seated in Bangladesh, the Chief Justice or a Supreme Court judge he nominates. In other arbitrations, the District Judge.[1]

Can foreign lawyers appear in an arbitration in Bangladesh?

Yes. Section 31 allows representation by a lawyer or any other chosen person, and there is no requirement of admission to the Bangladesh Bar.[1] [2]

Can the arbitration be conducted in English?

Yes. The parties may agree the language of the proceedings, and English is standard in cross-border cases. Documents in other languages need certified English translations at enforcement.[1] [2]

Which court enforces a foreign arbitral award in Bangladesh?

The District Court in Dhaka, which enforces the award as if it were its own decree under section 45, with an appeal to the High Court Division.[2] [6]

Can a state-owned company claim sovereign immunity against an award?

The Arbitration Act 2001 contains no sovereign immunity defence at the enforcement stage, but practical recovery against public bodies can still be slow, so contractual guarantees and waivers remain important.[2]

How long does it take to enforce a foreign award in Bangladesh?

Practitioner guidance puts it at around 12 to 24 months, depending on objections and appeals.[10]

Is BIAC suitable for international disputes?

Yes, particularly for Dhaka-seated cases. BIAC administers international arbitrations under its 2019 Rules and offers a fast-track procedure for claims up to Tk 50 million.[10]