Maritime Arbitration in Bangladesh: Charter Party Disputes and Arbitration Act 2001

Maritime arbitration Bangladesh parties face: the 2026 position

Maritime arbitration Bangladesh businesses take part in is, for the most part, arbitration that happens somewhere else. Bangladeshi importers charter bulk carriers on London terms, Chattogram ship recyclers buy vessels from cash buyers under English-law contracts, local shipyards sign newbuilding contracts with foreign owners, and almost every one of those documents sends disputes to the LMAA in London, the SMA in New York or the SCMA in Singapore. The arbitration itself may never touch Dhaka. Its consequences always do: the ship that must be arrested, the bank guarantee that must be furnished, and the award that must be enforced against assets in Bangladesh.

This guide, written for Bangladeshi parties and their foreign counterparties, covers charter party clauses, seat choice, the limits of the Arbitration Act 2001 for foreign seats, arrest under the Admiralty Court Act 2000 after Accom Travels, shipbuilding and recycling disputes, BIAC, and enforcement in Dhaka.

Summary: Most maritime contracts involving Bangladeshi parties provide for arbitration in London under the LMAA Terms, with New York (SMA) and Singapore (SCMA) as the main alternatives. The Arbitration Act 2001 applies in full only where the seat is in Bangladesh; for a foreign seat only the foreign award provisions in sections 45 to 47 apply. With section 7A relief currently unavailable for foreign seats, ship arrest under the Admiralty Court Act 2000 is the practical route to security, and the award is enforced through the District Judge, Dhaka within three years.

Key point: Under the LMAA Terms 2021, if a party served with a notice of arbitration fails to appoint its own arbitrator within 14 days, the claimant's arbitrator may be appointed as sole arbitrator and the award binds both sides. Bangladeshi respondents that ignore a London notice lose the right to shape the tribunal.

At a glance

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Table of Contents

Why maritime arbitration Bangladesh parties agree to usually happens abroad

Shipping runs on standard forms, and standard forms run on English law and London arbitration. A Bangladeshi charterer importing wheat, clinker or coal rarely negotiates the dispute clause; it accepts the owner's form with a London, New York or Singapore option already selected. The same is true of bills of lading, ship sales and many shipbuilding contracts, so maritime arbitration Bangladesh parties encounter is overwhelmingly foreign-seated and run under maritime arbitral terms.

The Bangladeshi party is usually a charterer or cargo receiver, a shipowner with a Bangladesh-flag fleet, a shipyard, a ship recycler, or a local agent or supplier. A charterer worries about demurrage and hire; a recycler about price, delivery and permits; a shipyard about delay, refund guarantees and defects.

Where the Arbitration Act 2001 stops

Section 3(1) of the Arbitration Act 2001 provides that the Act applies where the place of arbitration is in Bangladesh. Section 3(2) then adds that sections 45, 46 and 47, the provisions on recognition and enforcement of foreign awards, also apply where the place of arbitration is outside Bangladesh.[1] Everything else is built for a Bangladeshi seat; for a London charter party, the Act's role is largely confined to enforcement.

When a maritime dispute is international

Under section 2(c), an arbitration is an international commercial arbitration where the relationship is commercial and at least one party is foreign by nationality, residence, incorporation or central management and control, or is a foreign government.[1] Most charter parties with a foreign owner qualify. With a Dhaka seat, that classification decides whether the High Court Division or the District Judge hears any challenge to the award.[1] Our overview of arbitration law in Bangladesh explains the general framework.

Charter party arbitration clauses: what Bangladeshi parties actually sign

A charter party arbitration clause usually does four jobs in a few lines: it chooses the governing law, fixes the seat, names the arbitral terms and sets the number of arbitrators. In many forms those choices are made by filling in a box, and the clause is accepted without a second look. That is where a Bangladeshi party first loses leverage.

The BIMCO Law and Arbitration Clause 2020

BIMCO's current London clause provides for English law, a London seat "even where any hearing takes place in another jurisdiction", three arbitrators unless the parties agree otherwise, and arbitration under the LMAA Terms. BIMCO publishes parallel versions for New York, Singapore and Hong Kong, and the earlier mediation wording has been moved into a separate clause that the parties must choose to incorporate.[8]

Clauses incorporated into bills of lading

Bills of lading issued under a charter party frequently incorporate "all terms and conditions" of the charter, including its law and arbitration clause. The Arbitration Act 2001 accepts incorporation by reference: under the Explanation to section 9, a reference in a written contract to a document containing an arbitration clause constitutes an arbitration agreement if the reference makes that clause part of the contract.[1] For Bangladeshi receivers and their cargo insurers, this means a cargo claim may have to be arbitrated in London even though the receiver never saw the charter party. Our guide to cargo loss and short delivery claims covers the substantive side.

Fixtures made by email

The Act requires an arbitration agreement to be in writing, but treats it as written if it is contained in a signed document, in an exchange of letters, fax, email or other telecommunication that records the agreement, or in an exchange of statements of claim and defence where one side alleges the agreement and the other does not deny it.[1] A fixture concluded through broker emails will usually satisfy that test. The risk lies in a recap that says "otherwise as per" a pro forma without identifying which arbitration option applies.

Drafting points for charterers and owners

• Choose the seat deliberately: it decides whether Bangladeshi courts can grant interim relief.
• Name the terms: LMAA, SMA, SCMA or BIAC, with a small claims threshold that suits the trade.
• Fix the number of arbitrators: a sole arbitrator for demurrage and hire; three for high-value claims.
• Preserve arrest rights: state that the clause does not prevent either party from arresting a ship or obtaining security anywhere.

For clause drafting outside the maritime context, see our analysis of the arbitration clause in Bangladesh.

LMAA arbitration in London: terms, procedures and the 14-day trap

The London Maritime Arbitrators Association is not an administering institution in the ICC or SIAC sense. It publishes terms and procedures, and its President appoints arbitrators when the parties' own mechanism fails.[7] Most charter party arbitration involving Bangladeshi parties is conducted under the LMAA Terms 2021.

Default law and seat

Unless the parties agree otherwise, parties to an arbitration under the LMAA Terms 2021 agree that the law applicable to their arbitration agreement is English and that the seat is in England.[7] The proceedings are governed by the Arbitration Act 1996 as varied or supplemented by the Terms, and where the seat is outside England and Wales the Terms still apply except to the extent mandatory local law provides otherwise.[7] A clause that says only "LMAA arbitration" therefore points firmly to London.

Appointment and the sole-arbitrator default

If the clause names the LMAA Terms but is silent on numbers, the tribunal is three arbitrators. Each party must appoint its arbitrator within 14 days after a written request.[7] A claimant who appoints its arbitrator and gives notice requiring the other side to do the same within 14 calendar days may, if the respondent does not respond in time, appoint its own arbitrator as sole arbitrator, and that sole arbitrator's award binds both parties as if appointed by agreement.[7]

This is where Bangladeshi respondents most often go wrong. A notice arrives by email, nobody instructs London solicitors, and two weeks later the tribunal is the claimant's nominee alone. The respondent can still take part, but it has lost the right to appoint, and in the Litmond Shipping enforcement proceedings the award debtor's later complaint that it had no notice of the LMAA reference was still being litigated in Dhaka more than a decade after the award.[4]

Small and intermediate claims

Much charter party arbitration concerns demurrage, detention, hire balances or short freight, and the sums may not justify a full three-arbitrator reference. The LMAA Small Claims Procedure applies by default under the BIMCO clause where neither the claim nor any counterclaim exceeds USD 100,000, and the Intermediate Claims Procedure is available for claims up to USD 400,000.[8] Both are streamlined procedures designed to keep costs proportionate to the sums at stake, which suits Bangladeshi charterers whose evidence is mostly port records, statements of facts and laytime calculations.

SMA in New York and SCMA in Singapore

London dominates, but two other maritime arbitral bodies appear regularly in contracts with Bangladeshi parties: the Society of Maritime Arbitrators in New York, typically under US-origin charter forms, and the Singapore Chamber of Maritime Arbitration, increasingly chosen for Asia-based fixtures and ship sales.

Society of Maritime Arbitrators, New York

The SMA Rules operate with Title 9 of the United States Code, the Federal Arbitration Act. Unless the parties agree otherwise in advance, awards may be published by the Society, a real consideration for a Bangladeshi party that values confidentiality. The Rules provide for consolidation of related disputes, require written reasons and, absent an agreed timetable, give the other party twenty days after written notice to appoint its arbitrator. The SMA also publishes rules amended with effect from 1 October 2024 and a Shortened Arbitration Procedure.[9]

Singapore Chamber of Maritime Arbitration

The fourth edition of the SCMA Rules applies to arbitrations commenced on or after 1 January 2022. It introduced an Expedited Procedure for disputes where the aggregate of claim and counterclaim does not exceed USD 300,000, replacing the former Small Claims Procedure with its USD 150,000 limit; the procedure uses a sole arbitrator, a 14-day period for case statements and a 21-day period for the award where there is no oral hearing.[10] Email service, electronic awards and virtual hearings are permitted.[10] For a Bangladeshi party, Singapore offers a nearer time zone and an Asian arbitrator pool.

Where SIAC and BIAC fit

General institutions appear in logistics and container contracts. The Legend World Tank dispute over 107 tank containers, for example, arose under an agency agreement providing for SIAC arbitration in Singapore.[3] Our guide to SIAC arbitration for Bangladeshi parties covers the SIAC Rules 2025.

Seat choice: Dhaka, London, Singapore or New York

The seat is a legal choice, not a venue: it decides which courts supervise the arbitration and where the award can be challenged. For maritime arbitration Bangladesh parties negotiate, it also decides whether a Bangladeshi court can help before the award is made. The table compares the realistic options. On a phone, scroll it sideways.

What a Dhaka seat gives you

With a Bangladeshi seat the whole Arbitration Act 2001 applies. A party sued in breach of the clause can seek a reference to arbitration and a stay under section 10 before filing a written statement.[1] The tribunal can order interim measures under section 21, and the court can enforce them.[1] Section 7A allows the High Court Division, in an international commercial arbitration, to order interim custody or sale of goods, restrain transfers that would frustrate enforcement, appoint a receiver or grant an ad interim injunction, before or during the arbitration and until enforcement.[1] Any challenge to an award in an international commercial arbitration held in Bangladesh goes to the High Court Division within sixty days.[1]

What a foreign seat gives up in Bangladesh

With London, Singapore or New York as the seat, the supervisory court is abroad and the award cannot be set aside in Bangladesh. The Bangladeshi court's role shrinks to enforcement, and, on the current law, interim relief under section 7A is unavailable until the enforcement stage.[3] That suits a foreign owner that expects to arrest a ship, but can leave a Bangladeshi charterer or shipyard without a local protective remedy.

A working rule

If the counterparty's assets are ships calling at Chattogram, Mongla or Payra, a foreign seat costs little, because arrest remains available. If they are bank balances, receivables or land in Bangladesh, a Dhaka seat deserves serious consideration. If the Bangladeshi party expects to be respondent, a smaller-claims procedure and a sole arbitrator limit cost more than any choice of city.

Section 7A after Accom Travels: the interim relief gap

Section 7A, inserted with effect from 19 February 2004, allows orders "before or during continuance of the proceedings or until enforcement of the award under section 44 or 45", section 45 being the foreign award provision.[1] [3]

The Larger Bench ruling

In Accom Travels and Tours v Oman Air SAOC, reported at 27 BLC 596, a Larger Bench of the High Court Division held by a 2:1 majority that sections 7, 7A and 10 do not apply to foreign-seated arbitration, except that section 7A measures may be granted when a foreign award is being enforced. A suit brought in breach of a foreign clause may still be stayed under section 151 of the Code of Civil Procedure.[3]

Legend World Tank, July 2026

On 12 July 2026, in Legend World Tank Pte v Multinational Shipping Co Ltd, the High Court Division applied Accom to a section 7A application seeking to restrain a Bangladeshi agent from scrapping or disposing of 107 tank containers pending a Singapore-seated SIAC arbitration. The judge expressed detailed reservations about Accom, citing the Appellate Division's ECOM decisions, but held himself bound, dismissed the application and recalled the earlier interim order.[3]

Still an open question

In the Italian-Thai case the Appellate Division disposed of the petition without deciding whether that reading of section 7A was right, so the question remains open.[3] Until it is settled, plan on the basis that section 7A will not help in Bangladesh before an award exists. That is the gap admiralty arrest fills.

Arrest in support of arbitration under the Admiralty Court Act 2000

The Admiralty Court Act 2000 makes the High Court Division the Admiralty Court and lists the maritime claims within its jurisdiction. It says nothing about arbitration.[2] That silence is significant. An admiralty arrest is not a section 7A interim measure; it is the court's own jurisdiction in rem over a ship within its reach, so the Accom limitation on section 7A does not on its face apply to it. Our full guide to the Admiralty Court Act Bangladesh framework covers jurisdiction and procedure; this section focuses on how arrest interacts with an arbitration clause.

Security now, merits in London

Practitioner commentary on Bangladesh describes ship arrest as available "for security", and reports that where a maritime arbitration is pending the court maintains the arrest order for the purpose of security and stays the substantive suit.[11] In practice, the claimant files an admiralty suit and applies for arrest; once security is furnished, the suit is stayed and the security stands for the eventual award. For maritime arbitration Bangladesh claimants, this is the most effective protective step available. A defendant that wants arbitration should apply for a stay rather than plead to the merits.

Which charter party and shipbuilding claims support arrest

Section 3(2) of the Act covers, among other heads, claims arising from an agreement relating to the carriage of goods in a ship or to the use or hire of a ship, and claims in respect of the construction, repair or equipment of a ship.[2] Freight, hire, demurrage and charter party damages therefore fall within the list, as do many shipbuilding and repair claims.

The time-charterer problem

Being within the list is not enough to arrest a particular ship. For these claim heads, section 4(4) allows an action in rem only where the person who would be liable in personam, whether owner, charterer or person in possession or control when the claim arose, is the beneficial owner of all the shares in the ship to be arrested, or in another ship.[2] A Bangladeshi party with a claim against a time charterer generally cannot arrest the owner's ship; commentary notes that a ship on bareboat charter can be arrested but one on time charter cannot.[11] Map the ownership chain before filing.

Security and release

Release usually requires a cash deposit or a local bank guarantee covering the claim, interest and costs. A P&I club letter of undertaking is not accepted as security unless the claimant agrees to accept it, and the court may reduce security that is shown to be inflated.[11] Foreign owners should line up a Bangladeshi bank guarantee early; the claimant should frame its claim figure so that it can be defended on a reduction application. See also our guide to vessel arrest and release in Bangladesh.

Settling and remitting the security

Many arrest-backed disputes settle once security is in place. On 2 August 2026, in Nautical Bulk Carriers SA v MV Prosperity, the Admiralty Court dealt with two suits decreed on compromise where Bangladesh Bank had approved remittance abroad only subject to deduction of VAT, tax and advance income tax. The court held that an amount decreed, or awarded in an arbitration, assumes the character of a judgment debt, that no such deductions may be made from it, and that the conditional permission had no legal foundation; it directed remittance as originally ordered.[6]

Shipbuilding disputes: newbuildings, refund guarantees and repairs

Bangladeshi yards build vessels for local and foreign buyers and repair much of the domestic fleet. Export newbuilding contracts commonly use international forms such as BIMCO's NEWBUILDCON or yard-drafted terms, usually with English law and London arbitration. Disputes concern delay, specification shortfalls, variations and cancellation.

The refund guarantee is the real battleground

A foreign buyer paying instalments to a Bangladeshi yard will require a refund guarantee from a bank. If the buyer cancels and calls it, and the yard disputes the cancellation, the Accom line means the yard cannot easily obtain section 7A relief in Dhaka to restrain the call while a London arbitration runs.[3] Its protection lies in the guarantee wording, such as deferral of payment pending an award, and in the clause chosen at signature. Our analysis of whether a performance guarantee can be stopped explains the local injunction standards.

Domestic newbuilding and repair contracts

For domestic contracts between Bangladeshi owners and yards, a Dhaka seat is usually the better fit: the full Act applies and the court can grant section 7A measures over the vessel under construction.[1] A repairer with an unpaid account also has the admiralty route, because claims for construction, repair or equipment of a ship are within section 3(2).[2]

Ship recycling disputes: cash buyers, recyclers and permits

Bangladesh's ship recycling yards buy end-of-life tonnage, usually through cash buyers who purchase from the last owner and resell for delivery off Chattogram. The sale contracts, whether based on BIMCO's RECYCLECON or a cash buyer's own form, generally provide for English law and London arbitration. Disputes arise over price renegotiation, delivery and beaching, condition, letters of credit and the hazardous materials inventory.

The no-objection certificate condition

A Bangladeshi recycler cannot lawfully import or locally acquire a ship for recycling without a no-objection certificate from the Bangladesh Ship Recycling Board under section 6(2) of the Bangladesh Ship Recycling Act 2018. Section 26 makes doing so without an NOC an offence punishable by imprisonment of up to two years, a fine of ten to thirty lakh taka, or both, and section 7 requires yards to maintain international standards.[13] A sale contract that leaves the risk of NOC delay unallocated invites a dispute that a London tribunal will decide on English contract principles.

Security against a beached ship

An unpaid seller or supplier may need security before the hull is cut up. Commentary notes that in a suit in rem a ship can be attached if it is beached for scrap before the suit is instituted, and that the court can restrain a party from scrapping or removing a vessel by injunction.[11] Speed matters more here than in any other maritime dispute, because the asset physically disappears.

BIAC for domestic maritime and logistics disputes

Not every dispute needs London. Lighterage, coastal charters, stevedoring, agency and freight forwarding disputes are often between Bangladeshi companies, in taka. For this part of maritime arbitration Bangladesh parties can keep at home, the Bangladesh International Arbitration Centre offers a domestic institutional option.

Clause, seat and timetable

The BIAC model clause provides for arbitration under the BIAC Rules by one or more arbitrators, with the laws of Bangladesh applying and Dhaka as the seat unless the parties agree otherwise, and Rule 17 makes Dhaka the default seat.[12] The tribunal must start oral hearings within 30 days of the written pleadings and conclude them within 180 days of the first hearing.[12]

Fast track for smaller claims

Under Rule 28, where the amount in dispute does not exceed Taka 50 million, a party may ask BIAC before the preliminary conference to treat the case as a fast track arbitration, in which case the time limits are shortened so that the award is made within three months of the tribunal's constitution unless exceptional circumstances justify extension.[12] That suits demurrage and lighterage claims between local operators. Our guide to BIAC arbitration in Bangladesh covers fees, panels and procedure.

Enforcing a maritime award in Bangladesh

A London, New York or Singapore award is enforced under section 45 by the District Judge's Court in Dhaka as if it were a decree, on production of the authenticated award and arbitration agreement; section 46 allows refusal on New York Convention grounds, including lack of proper notice.[1]

Lessons from recent cases

In Litmond Shipping v Tiryaki Agro, an LMAA award of 13 February 2014 for USD 825,094.17 was put into execution in Dhaka in January 2017; the debtor's lack-of-notice objection failed in 2023 because the award copy it filed was not attested, and in February 2025 the High Court Division directed disposal of the execution case within ninety days.[4] In Jess Smith & Sons Cotton v Patriot Spinning Mills (26 February 2026), the court held that execution of a foreign award must be sought within three years under Article 182 of the Limitation Act 1908, without condonation.[5]

Enforcement is the last stage of every maritime arbitration Bangladesh dispute, so award creditors should file well inside three years with authenticated documents ready. Our detailed guide to foreign arbitral award enforcement in Bangladesh covers procedure and asset recovery; for Dhaka-seated awards see how to set aside an arbitral award in Bangladesh.

A step-by-step plan for a maritime arbitration Bangladesh dispute

The sequence applies whatever the seat.

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Mistakes Bangladeshi parties should avoid

• Ignoring the notice of arbitration: under the LMAA Terms the 14-day appointment window is short and the sole-arbitrator default is real.[7]
• Counting on section 7A in a foreign-seated case: after Accom Travels and Legend World Tank, it is not available before enforcement.[3]
• Arresting the wrong ship: section 4(4) requires the person liable to be the beneficial owner of the ship arrested, which a time charterer usually is not.[2]
• Leaving permits out of recycling contracts: the Ship Recycling Board NOC is a legal precondition, and the contract should allocate the risk.[13]
• Letting the award go stale: the three-year execution period cannot be extended.[5]

What to watch in maritime arbitration Bangladesh law in 2026

Three developments will shape maritime arbitration Bangladesh practice over the coming year. First, whether the Appellate Division or a larger bench revisits Accom Travels after the reservations in Legend World Tank.[3] Second, reform of the Arbitration Act 2001: in May 2026 the Law Minister, Md Asaduzzaman, said its limitations "can be fixed easily", pointing to arbitrator fees and long-pending cases, and BIAC referred to proposed reforms.[14]

Third, the Commercial Courts Act 2026, passed in April 2026, which the Minister acknowledged leaves gaps for international investors.[14] Meanwhile, the Admiralty Court's August 2026 ruling on remittance removes a practical obstacle to getting settlement and award money out of Bangladesh.[6]

Contracts signed now should combine a deliberate seat, express preservation of arrest rights, a smaller-claims procedure and enforcement planning from day one. TRW's international arbitration practice advises on maritime clauses, LMAA, SMA, SCMA and BIAC references, admiralty arrests in support, and enforcement in Dhaka. For the wider landscape, see our guides to maritime law in Bangladesh and alternative dispute resolution in Bangladesh, or contact TRW.

Frequently asked questions

Does the Arbitration Act 2001 apply to a London charter party arbitration?

Only in part. Section 3 applies the Act where the seat is in Bangladesh, and applies only sections 45 to 47, on foreign awards, where the seat is abroad.[1]

What happens if a Bangladeshi respondent does not appoint an arbitrator in an LMAA case?

Under the LMAA Terms 2021, if the respondent fails to appoint within the 14 days specified in the claimant's notice, the claimant may appoint its own arbitrator as sole arbitrator, and the resulting award binds both parties.[7]

Can a ship be arrested in Bangladesh when the charter party has a London arbitration clause?

Yes, if the claim is within section 3(2) of the Admiralty Court Act 2000 and section 4 permits an action in rem against that ship. Commentary reports that the court maintains the arrest for security and stays the suit pending the arbitration.[2] [11]

Can a Bangladeshi court grant section 7A interim relief for a foreign-seated maritime arbitration?

Not before the enforcement stage on current law; the High Court Division applied Accom Travels on 12 July 2026.[3]

Is a bill of lading holder bound by the charter party arbitration clause?

It can be. Under the Explanation to section 9, a reference in a written contract to a document containing an arbitration clause is an arbitration agreement if the reference makes that clause part of the contract.[1]

What are the LMAA small and intermediate claims thresholds?

Under the BIMCO Law and Arbitration Clause 2020, the Small Claims Procedure applies where neither claim nor counterclaim exceeds USD 100,000 unless the parties agree otherwise, and the Intermediate Claims Procedure is available up to USD 400,000.[8]

Will a P&I club letter of undertaking release an arrested ship in Bangladesh?

Generally not unless the claimant agrees; release usually requires a deposit or a local bank guarantee.[11]

Which court enforces an LMAA or SCMA award in Bangladesh?

The District Judge's Court exercising jurisdiction in Dhaka, under section 45 of the Arbitration Act 2001, as if the award were a decree of that court.[1]

How long does an award creditor have to enforce a maritime award in Bangladesh?

Three years from the date of the award, under Article 182 of the Limitation Act 1908, as held in Jess Smith & Sons Cotton v Patriot Spinning Mills in February 2026. The delay cannot be condoned.[5]

Can BIAC handle maritime disputes?

Yes. The BIAC Rules 2019 cover business disputes generally, default to a Dhaka seat, and offer fast track arbitration for disputes up to Taka 50 million with an award within three months of the tribunal's constitution.[12]