How to Set Aside an Arbitral Award in Bangladesh 2026: Grounds, Deadlines and Appeals

How to set aside arbitral award Bangladesh law makes final: the 2026 position

Anyone who wants to set aside arbitral award Bangladesh law has made final has one statutory door, a sixty-day clock and a closed list of grounds. The Arbitration Act 2001 makes every award final and binding, allows recourse only by an application under section 42, and limits the court to the grounds in section 43. In 2025 and 2026 the High Court Division made both limits sharper: it refused to extend the sixty days, and it restated that it does not sit in appeal over an arbitral tribunal.

This guide is about the challenge itself. It covers which court hears the application, how the time limit runs, each ground in section 43 and the public policy case law, deposit and stay of enforcement, appeals under section 48 and civil revision, and the strategy an award creditor should use to defeat a challenge. Enforcement of an award that survives, and the wider arbitration framework, are covered in companion TRW guides.

Summary: A domestic award is challenged before the District Judge, and an award in an international commercial arbitration held in Bangladesh before the High Court Division, in each case within sixty days of receiving the award. The court can set the award aside only on the grounds in section 43, cannot review the merits, and may order the award money to be deposited or secured while the application is pending. The District Judge's decision can be appealed to the High Court Division under section 48.

Key point: The sixty days are a hard stop. In Lily Begum Ahmed v Navana Real Estate (11 August 2025) the High Court Division held that the Act is a self-contained code, that sections 5 and 18 of the Limitation Act 1908 do not apply, and that a District Judge acted without jurisdiction in condoning a 116-day delay. A party that misses the window loses its challenge entirely.

At a glance

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Table of Contents

How recourse against an award works under the Arbitration Act 2001

Section 39 of the Arbitration Act 2001 states that an award made under an arbitration agreement is final and binding on the parties and those claiming through them, while preserving the right to challenge it "in accordance with the provisions of this Act".[1] Chapter VIII, headed "Recourse against arbitral award", then provides a single route: an application to set aside under section 42, decided on the grounds in section 43.[1] [2] There is no appeal on the merits from a tribunal to a court.[3]

Three consequences follow for any party that wants to set aside arbitral award Bangladesh tribunals have made. First, a party cannot rewrite the remedy by contract: the Act contains no provision allowing the parties to exclude or widen the grounds of challenge.[3] Second, the applicant carries the initial burden of proving a ground.[4] Third, the challenge must be brought within the Act. Section 7 bars any court from hearing proceedings on matters covered by the arbitration agreement except as the Act provides, so a declaratory suit that an award is void is not a substitute for a section 42 application.[1]

What a successful challenge achieves

Setting aside annuls the award, wholly or in part. It does not substitute the court's own decision. Where decisions on matters submitted to arbitration can be separated from those that were not, the proviso to section 43(1)(a)(iv) allows only the offending part to be set aside.[1] Section 55(4) then protects the claimant's position on limitation: where the court sets an award aside, the period between commencement of the arbitration and the court's order is excluded in computing time under the Limitation Act.[1] That matters when the underlying claim is old and the parties must start again.

Which court can set aside arbitral award Bangladesh parties obtain

The forum depends on whether the arbitration was an international commercial arbitration. Section 42(1) gives the "Court" power to set aside any award other than one made in an international commercial arbitration. Section 42(2) gives the High Court Division power to set aside an award made in an international commercial arbitration held in Bangladesh.[1] Both applications must be made within sixty days of receipt of the award.

The District Judge for domestic awards

"Court" means the court of the District Judge and includes any Additional District Judge's court the Government appoints by gazette notification to discharge the District Judge's functions under the Act.[1] The explanation to section 43 fixes territorial jurisdiction: the relevant court is the one within whose local limits the award was finally made and signed.[1] Section 53 adds a rule that is easily overlooked. Once any application under the Act has been made in a court in respect of an arbitration agreement, that court alone has jurisdiction over the arbitral proceedings, and all later applications must be made there.[1] If the District Judge appointed the tribunal or granted section 7A relief, the setting-aside application belongs before that same court.

The High Court Division for international commercial arbitration

Where at least one party is foreign within section 2(c), the challenge is filed in the High Court Division in its statutory original jurisdiction. Manikganj Power Generations v Yew Choon, decided on 10 August 2026, was such an application, brought under sections 42 and 43 against an award in a heavy-lift transport dispute.[7] Filing in the wrong forum is a serious risk: because the sixty days cannot be extended, an application rejected for want of jurisdiction may leave no time to refile.[5]

Foreign awards cannot be set aside in Bangladesh

An award made in an arbitration seated abroad is not open to a section 42 application. Bangladeshi courts may only recognise and enforce it, or refuse to do so on the grounds in section 46. On 9 July 2026, in South Express v Madina Enterprise, the High Court Division declared that a District Judge had exceeded his jurisdiction by purporting to set aside a London award, and held that the power to annul lies with the courts of the seat.[13] A party resisting a foreign award must challenge it at the seat or object at the enforcement stage.

The table below summarises the routes. On a phone, scroll it sideways.

The sixty-day limit to set aside arbitral award Bangladesh law imposes

The sixty days run from "the receipt of the award".[1] Section 38(5) requires a copy of the award signed by the arbitrators to be delivered to each party, and section 5 deems a written communication received if delivered personally or at the addressee's place of business, habitual residence or mailing address, or, if none can be found after reasonable inquiry, if sent to the last known address by registered letter or other recorded means.[1] Section 5 does not apply to communications in proceedings of a judicial authority.

Lily Begum Ahmed v Navana: no power to condone delay

The award in Lily Begum Ahmed v Navana Real Estate was made and received on 29 February 2024. The losing party applied to set it aside 116 days late. The District Judge, Dhaka, condoned the delay under section 5 of the Limitation Act on condition that 10 per cent of the award money be paid as costs. On revision, the High Court Division set that order aside on 11 August 2025.[5]

The court held that section 42(1) is "plain and peremptory", that the Act contains no power to condone delay, and that sections 5 and 18 of the Limitation Act, including the fraud provision, do not apply. Time runs separately for each party from actual or deemed receipt. Personal delivery, registered post or court-authorised substituted service of the award counts as deemed receipt, and a bare denial of knowledge does not stop the clock. A newspaper publication made before the tribunal was appointed was not service of the award.[5]

The earlier, more lenient line

The position has not always been so strict. In NEETI Construction v BCIC, decided on 5 June 2024, a Division Bench restored a setting-aside application filed with a request to condone 767 days' delay under section 5. The applicant proved that it first learned of the award on 27 March 2018 and filed within days of obtaining a certified copy.[6] Read with Lily Begum, the safer analysis is that a party who never received the award should argue that time never started, supported by evidence, rather than ask the court to forgive delay. Where receipt is proved, there is no discretion left.[5]

Corrections, interpretations and additional awards

Under section 40, a party may within fourteen days of receipt ask the tribunal to correct computation, clerical or typographical errors, to interpret a specific point, or to make an additional award on claims omitted; any correction or interpretation forms part of the award.[1] The Act does not say that a section 40 request restarts the sixty days. Until a court decides the point, calendar the deadline from receipt of the original award and treat any correction as a reason to amend, not to delay, the application.

Grounds to set aside arbitral award Bangladesh law recognises under section 43

Section 43(1) divides the grounds into two groups. Under clause (a), the applicant must furnish proof of a defect. Under clause (b), the court must be satisfied of a defect affecting the subject matter or the award itself.[1] Fraud and corruption fall within clause (b), and a court may examine corruption on its own motion even where no party raises it.[4] In the High Court Division's words in 2026, section 43 "exhaustively enumerates" the circumstances in which an award may be set aside.[7]

Incapacity of a party: section 43(1)(a)(i)

The award may be set aside if a party to the arbitration agreement was under some incapacity.[1] In practice this covers minors and persons of unsound mind, and authority questions such as a signatory acting without power to bind a company or statutory body. Evidence of the counterparty's constitutional documents and board approvals is central.

Invalid arbitration agreement: section 43(1)(a)(ii)

The English text refers to an arbitration agreement "not valid under the law to which the parties have subjected it".[1] Chambers notes that the Bangla text, which prevails, departs from the Model Law because of a translation error and speaks of the law under which the parties entered into the agreement not being a valid law.[3] Section 56 confirms that the Bangla Act prevails over the English text in any conflict.[1] Counsel should plead this ground in both formulations.

No proper notice or inability to present the case: section 43(1)(a)(iii)

The applicant must show it was not given proper notice of the appointment of an arbitrator or of the proceedings, or was otherwise unable for reasonable cause to present its case.[1] This is the most common ground in default awards. It overlaps with limitation: a party that genuinely had no notice of the proceedings will often also argue that it never received the award.

Excess of mandate: section 43(1)(a)(iv)

An award that deals with a dispute not contemplated by or outside the terms of the submission, or that decides matters beyond its scope, may be set aside, but only the severable excess if the remainder can stand.[1] Compare the claims as pleaded, the terms of reference and the dispositive part of the award line by line.

Composition or procedure: section 43(1)(a)(v)

The award may be set aside if the composition of the tribunal or the procedure did not follow the parties' agreement, unless that agreement conflicted with the Act, or, absent agreement, did not follow the Act.[1] Unilateral changes to the tribunal, a missing chairman or the exclusion of one arbitrator from deliberations all fall here. This ground is closely tied to waiver, discussed below.

Non-arbitrability: section 43(1)(b)(i)

The court may set aside an award if the subject matter is not capable of settlement by arbitration under the law in force in Bangladesh.[1] The Act lists no excluded subjects; criminal and competition matters are generally treated as non-arbitrable, and sector statutes such as section 40 of the Bangladesh Energy Regulatory Commission Act 2003 send some disputes to a regulator.[3]

Prima facie opposed to law: section 43(1)(b)(ii)

This ground, which goes beyond the Model Law, allows the court to set aside an award that is "prima facie opposed to the law for the time being in force in Bangladesh".[1] It is the ground most often stretched into a merits appeal. The 2026 Manikganj judgment held that it cannot be read as conferring a general appellate jurisdiction over every alleged error, because the distinction between an appeal and a setting-aside application would otherwise disappear.[7]

Public policy: section 43(1)(b)(iii)

An award in conflict with the public policy of Bangladesh may be set aside.[1] The term is undefined, and its scope is set by the case law in the next section.

Fraud or corruption: section 43(1)(b)(iv)

The award may be set aside if it was induced or affected by fraud or corruption.[1] An allegation of fraud does not, however, extend the sixty days: Lily Begum rejected the argument that section 18 of the Limitation Act suspended time.[5] Evidence of fraud must be gathered and filed within the statutory window.

Public policy and the limits of court review

Public policy is the ground on which most challenges to set aside arbitral award Bangladesh courts receive are ultimately argued. The courts have given it a narrow core and a small number of recognised extensions.

The Appellate Division test

In Saudi Arabian Airlines v Saudi Bangladesh Services, 73 DLR (AD) (2021) 277, the Appellate Division held that public policy must be understood in the context of each case, that an award is contrary to it if it is patently illegal, with the illegality going to the root of the matter, and that an award may also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court.[3]

No review of the evidence

The High Court Division has repeatedly refused to reweigh evidence. Chambers cites BPDB v Arab Contractors, 15 MLR (2010) (HCD) 185, Bangladesh Railway v Pamkaya, 2 CLR (2014) (HCD) 114, and Jalalabad Gas v Lafarge Surma Cement, 23 BLC (2018) (HCD) 775, as refusing to set aside awards on substantive grounds.[3] The exception was Gas Transmission Co v Drilltec-Maxwell JV (2021), in which the court re-examined the substance of an award and set it aside; an appeal was reported as pending.[3]

Manikganj Power v Yew Choon (2026)

The tribunal had awarded USD 511,150 for a 103-day delay in a power project and BDT 35,50,000 in costs. The award debtor argued that the tribunal had reversed the burden of proof, relied on the claimant's own logbooks and ignored its documents, so the award was perverse and prima facie opposed to law.[7] The High Court Division dismissed the application on 10 August 2026. It said the court "does not sit in appeal over an arbitral award" and that its jurisdiction is "supervisory and not appellate".[7]

The judgment is now the clearest statement of perversity in this context. A finding is perverse only where it rests on no evidence, ignores material evidence entirely, depends solely on inadmissible or inherently unreliable evidence, or is so irrational that no reasonable tribunal could reach it. Weight of evidence belongs to the tribunal. The court also read Drilltec as permitting interference only for demonstrably perverse findings or complete non-consideration of material evidence.[7]

The costs challenge failed too. The claimant had recovered about 17.88 per cent of its claim, but the court held that costs need not follow a strict arithmetic proportion and that a tribunal's discretion under section 38 is reviewable only if exercised arbitrarily or on a wrong principle.[7]

Where public policy has succeeded

Process failures fare better than complaints about outcome. In Sinha Power v BPDB, decided on 18 December 2024, the High Court Division upheld a District Judge's order setting aside a rental power award. The tribunal had closed the hearing in February 2018 and announced in October 2019 that the award was ready on stamp paper, and the chairman's partial dissent began by saying he had "gone through the award passed by the learned co-arbitrators".[8]

The court held that no deliberation had taken place, that this was opposed to public policy and that the tribunal had breached its duty under section 23(3) to act fairly and impartially. It relied on the Appellate Division's earlier Saudi Airlines decision, 15 BLC (AD) 186, which treated the exclusion of an arbitrator from deliberations as fatal.[8]

Where public policy was overused

The opposite outcome is just as instructive. In BASIC Bank v Business Resources, a District Judge set aside a 2023 award for floor space in a Dhaka building, holding the arbitration violative of public policy. On appeal the High Court Division allowed the bank's appeal on 26 November 2024, affirmed the award and directed the execution case to proceed.[9] The lesson is that public policy arguments may succeed at first instance and still fail on appeal, which is why both sides should plan for two levels from the outset.

Waiver: objections that must be raised during the arbitration

Section 6 provides that a party who knows a derogable provision of the Act or a requirement of the arbitration agreement has not been complied with, and proceeds without objecting without undue delay or within any time limit, is deemed to have waived the objection.[1] Section 14 requires a challenge to an arbitrator to be made within thirty days of becoming aware of the circumstances, with an appeal to the High Court Division within thirty days of the tribunal's decision.[1]

The courts enforce these rules strictly when a party later tries to set aside arbitral award Bangladesh tribunals have issued. In Rupayan Housing v Mustafa Zaman, decided on 22 April 2025, the award debtor alleged that the sole arbitrator had acted as the claimant's lawyer in an earlier land case. The High Court Division held the objection waived under section 6, because it had not been raised in the two years of the arbitration, and rejected the argument that the earliest opportunity means whenever a party chooses to discover the facts.[10] The court also held that stamping and registration objections arise when the award is filed for enforcement under section 44, not as grounds to set it aside.[10]

For a party that expects to challenge an award, the work starts during the hearing: record every procedural objection in writing, use section 14 on arbitrator independence, and raise jurisdiction under section 19 no later than the defence.[10]

How to set aside arbitral award Bangladesh procedure works in practice

A domestic challenge is filed as an Arbitration Miscellaneous Case before the District Judge; an international commercial challenge is filed as an Arbitration Application in the High Court Division.[5] [7] The petition should identify each section 43 ground relied on, attach the award and arbitration agreement, and explain how the application is within time. The sequence we follow is set out below.

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Put the arbitral record before the court yourself

The Act contains no provision for the court to call for the tribunal's record. In Gas Transmission Co v Dipon Gas, the applicant asked the District Judge to call for the record when it filed its challenge in 2021; the record never arrived, the case stalled, and the High Court Division eventually directed disposal within three months of the record's receipt.[12] The lesson is to file the pleadings, transcripts and exhibits that support each ground as annexures, rather than depend on the tribunal to transmit them.

Expect a long first-instance phase

Challenges are not quick. The Manikganj award was dated 20 June 2023 and the High Court Division's judgment was delivered on 10 August 2026.[7] In Sinha Power the award was dated 6 May 2021, the District Judge decided on 23 November 2023 and the appeal was dismissed on 18 December 2024.[8] Where delay favours one side, the other should seek a direction for disposal within a fixed period, which the High Court Division routinely gives.[6] [11]

Deposit, security and stay of enforcement

Section 43(2) provides that where an application to set aside is made, the court or the High Court Division may order that any money payable under the award be deposited in court or otherwise secured pending determination of the application.[1] The power is discretionary, not automatic. For a creditor facing an attempt to set aside arbitral award Bangladesh courts have not yet decided, it is the award creditor's principal protection, and it should be requested at the first hearing with evidence of the debtor's financial position and any dealings with assets.

The effect of a pending challenge on enforcement

Section 44 allows a domestic award to be enforced as a decree once the time for a section 42 application has expired or an application has been refused.[1] A pending challenge therefore holds back execution in practice. When BASIC Bank's award was set aside, the executing court rejected the execution case; once the award was affirmed on appeal, the High Court Division held there was no bar to proceeding.[9] Challengers also commonly ask the court to stay the operation of the award, as the applicant did in Gas Transmission v Dipon Gas.[12]

Section 7A while the challenge is pending

Section 7A allows interim measures from before the arbitration until the award is enforced under section 44.[1] Both sides can use it after the award. In Pubali Traders v Ministry of Food, decided on 9 December 2025, the award debtor had lost the arbitration and filed a section 42 challenge; the High Court Division restrained encashment of its performance guarantee until that challenge was decided and directed the District Judge to dispose of it within six months.[11] An award creditor can equally seek to restrain the disposal of identified assets. Our analysis of whether a performance guarantee can be stopped covers the guarantee angle.

Conditions imposed on late applicants

A court cannot cure a time bar by imposing terms. In Lily Begum the District Judge had admitted the late application subject to payment of 10 per cent of the award money as costs; the High Court Division set the order aside as without jurisdiction.[5]

Appeals under section 48, revision and the Appellate Division

Section 48 provides that an appeal lies to the High Court Division from orders of the Court setting aside or refusing to set aside an award under section 42(1), refusing to enforce an award under section 44, and refusing to recognise or enforce a foreign award under section 45.[1] Either party may appeal: the challenger when its application fails, and the award creditor when the award is set aside.

How the appeal is heard

Section 48 appeals are filed in the High Court Division's appellate jurisdiction, recently both as Arbitration Appeals and as First Miscellaneous Appeals. Rupayan was Arbitration Appeal No 16 of 2023; Sinha Power and the set-aside appeal in BASIC Bank proceeded as First Miscellaneous Appeals.[8] [9] [10] The appellate court applies the same section 43 standard. It does not acquire a merits jurisdiction that the District Judge lacked, as Rupayan shows: grounds that were "disputed question of facts" failed on appeal as they had at first instance.[10]

The Act itself fixes no period for a section 48 appeal, and section 55 applies the Limitation Act to arbitrations subject to the Act.[1] Confirm the applicable period on the day the order is made and file promptly. A pending appeal does not by itself freeze related proceedings, so an appellant who needs protection should apply for a stay or a section 7A order at the same time.

Civil revision for interlocutory orders

Orders made during a setting-aside case that are not listed in section 48 are challenged by civil revision under section 115 of the Code of Civil Procedure. Lily Begum was a revision against an order condoning delay and admitting the application, and Gas Transmission v Dipon Gas was a revision against a procedural order on the arbitral record.[5] [12] For an award creditor, revision is the tool to kill a time-barred challenge early rather than defend it on the merits.

When the High Court Division decided first

Section 48 covers orders of "the Court", meaning the District Judge, so it does not cover the High Court Division's own decision on an international commercial award under section 42(2).[1] Further recourse then lies to the Appellate Division, which under article 103 of the Constitution hears appeals from the High Court Division, and outside the listed cases only with its leave.[14] In domestic cases, the Appellate Division sits above the section 48 appeal on the same leave basis.

Strategy for award creditors resisting a challenge

An award creditor facing an application to set aside arbitral award Bangladesh courts will hear should treat the challenge as the first stage of enforcement, not a separate dispute. Five points carry most cases.

• Prove receipt and test limitation first: keep the signed delivery record, courier receipt or registered post slip. If the application is out of time, object at admission and, if it is admitted, move in revision as the award-holder did in Lily Begum.[5]
• Seek a section 43(2) deposit: ask the court to order the award money deposited or secured pending the challenge, so that the debtor's delay costs it something.[1]
• Plead waiver: map every objection against the procedural record. Bias, composition and procedural complaints not raised during the arbitration are vulnerable under section 6.[10]
• Reframe merits arguments: show the court that "perversity" and "prima facie opposed to law" are being used to reargue the evidence, relying on the tests in Manikganj.[7]
• Ask for a timetable: request a direction for disposal within a fixed period and keep the execution file ready so that it moves the day the challenge ends.[9] [11]

Award creditors should also protect the award's integrity while the arbitration is still running. A reasoned award that addresses each party's documents, records the tribunal's deliberations and allocates costs with stated reasons is far harder to attack. The Sinha Power outcome shows how a gap in the deliberation record can undo years of work.[8]

For the party that wants to challenge

The mirror image applies. Diary the deadline from the earliest possible date of receipt, choose the strongest two or three grounds rather than all nine, and support each with documents from the arbitral record. Process failures, such as lack of notice, a tribunal improperly constituted or the exclusion of an arbitrator from deliberations, carry far more weight than complaints about how the evidence was weighed. Our guide to arbitration law in Bangladesh explains the statutory framework behind each ground.

Where the challenge fits in the wider dispute

A challenge is rarely the only proceeding. Guarantee calls, execution cases, parallel suits and regulatory steps often run alongside it, and section 53 keeps most of the arbitration-related applications before one court.[1] Parties should map every live proceeding before filing, because an order in one can decide the others. Our overview of alternative dispute resolution in Bangladesh shows how arbitration sits beside mediation and settlement, and a negotiated outcome can still be recorded at any stage. Clause drafting choices that reduce challenge risk are discussed in our analysis of arbitration agreement enforceability in Bangladesh.

What to watch in 2026

Three issues will shape how parties set aside arbitral award Bangladesh tribunals issue over the coming year. First, whether the Appellate Division endorses the strict view of the sixty-day limit in Lily Begum and resolves the tension with the more lenient approach in NEETI Construction.[5] [6] Second, whether the narrow perversity test in Manikganj settles the uncertainty left by Drilltec.[3] [7] Third, how far public policy will continue to reach process failures such as non-deliberation, after Sinha Power.[8]

The first weeks after an award decide most challenges: proving receipt, choosing the forum, framing the grounds and securing the money. TRW acts for award creditors and award debtors in setting-aside cases, section 48 appeals and revisions. Our international arbitration practice and dispute resolution team can review an award within the sixty-day window, or you can contact TRW directly.

Frequently asked questions

Can an arbitral award be appealed on the merits in Bangladesh?

No. Section 39 makes the award final and binding, and the only recourse is an application to set aside under section 42 on the grounds in section 43. The High Court Division has said it does not sit in appeal over an award.[1] [7]

How long do I have to apply to set aside an award?

Sixty days from receipt of the award, for both domestic and international commercial awards made in Bangladesh.[1]

Can the court extend the sixty days?

In August 2025 the High Court Division held that it cannot: the Act is a self-contained code, and sections 5 and 18 of the Limitation Act 1908 do not apply. A party that never received the award should instead show that time has not started.[5]

Which court hears the application?

The District Judge's court within whose local limits the award was made and signed, for domestic awards; the High Court Division for international commercial arbitrations held in Bangladesh.[1]

Can a Bangladeshi court set aside a foreign award?

No. It can only recognise and enforce a foreign award or refuse to do so under section 46. In July 2026 the High Court Division declared a District Judge's attempt to set aside a London award to be without lawful authority.[13]

What does public policy mean for setting aside an award?

The Appellate Division treats an award as contrary to public policy if it is patently illegal in a way that goes to the root of the matter, or so unfair that it shocks the conscience of the court. Lack of deliberation among arbitrators has been held to qualify.[3] [8]

Do I have to deposit the award money to challenge it?

Not automatically. Under section 43(2) the court may order the money payable under the award to be deposited or otherwise secured while the application is pending.[1]

Can the award be enforced while a challenge is pending?

Section 44 permits enforcement of a domestic award once the challenge period has expired or the application has been refused, so a pending challenge holds back execution in practice.[1] [9]

Who can appeal under section 48?

Either party may appeal to the High Court Division against a District Judge's order setting aside or refusing to set aside an award, refusing to enforce a domestic award or refusing to recognise a foreign award.[1]

Can I raise arbitrator bias for the first time after the award?

Usually not. The High Court Division held in 2025 that a bias objection not raised during the arbitration was waived under section 6 of the Act.[10]