Technology Arbitration in Bangladesh 2026: IT and Software Disputes, AI, Crypto and Data Protection

Technology arbitration Bangladesh: the 2026 landscape

Technology arbitration Bangladesh businesses face in 2026 looks very different from the software-delivery claims of a decade ago. A failed core-banking rollout, a SaaS outage that breaches a service-level agreement, a licensor accusing a Dhaka developer of code misuse, a crypto loss suffered by a Bangladeshi resident on an offshore exchange, an arbitrator suspected of drafting an award with a chatbot, a tribunal moving employee records from Dhaka to Frankfurt: each is now a live arbitration problem. The procedural law is still the Arbitration Act 2001, but the evidence, the risks and the regulatory overlay have changed.

This guide is written for Bangladeshi technology companies, banks and telecom operators buying systems, foreign vendors selling into Bangladesh, and the counsel who advise them. It covers four connected subjects: IT and software disputes, including escrow and intellectual property clauses; the use of artificial intelligence by parties and by arbitrators; crypto disputes, which Bangladesh's foreign exchange rules make unusually risky; and data protection in international arbitration under the GDPR, the ICCA-IBA Roadmap and Bangladesh's new Personal Data Protection Act 2026. Where TRW has already published a detailed guide on a related subject, we link to it rather than repeat it.

Summary: Technology disputes involving Bangladeshi parties are best resolved by arbitration under a clause that fixes the seat, the institution, an expert tier and urgent court relief. In 2026 four issues decide outcomes: proving digital evidence, protecting source code and IP, managing AI use by counsel and tribunals, and complying with data protection law when evidence crosses borders. Crypto claims carry an added illegality risk under Bangladesh Bank's 2022 prohibition.

Key point: An award that rests on a transaction Bangladeshi law forbids, such as a resident buying virtual assets in breach of FE Circular No. 24 of 2022, can be attacked in Bangladesh on public policy and illegality grounds. Crypto exposure must be assessed before arbitration starts, not at enforcement.

At a glance

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Table of Contents

Why technology arbitration Bangladesh contracts favour

Technology contracts are long-tail relationships. A core-banking or telecom billing system takes years to implement, is licensed for longer, and is supported under service agreements that outlive the project team that signed them. When something goes wrong, the dispute is technical, document-heavy and often cross-border: the vendor is in India, Singapore or Europe, the customer in Dhaka, the servers somewhere else. Arbitration answers each of those features better than litigation in the ordinary civil courts.

Expertise, confidentiality and speed

Parties can choose arbitrators who understand software development, network architecture or payments, and can appoint independent technical experts. Under section 32 of the Arbitration Act 2001 the tribunal may appoint an expert to report on specified issues, and Rule 16 of the BIAC Arbitration Rules 2019 gives a BIAC tribunal the same power and lets the parties question the expert at a hearing.[1] [2] BIAC Rule 30 also requires the parties and the tribunal to treat all matters relating to the proceedings and the award as confidential, which matters when the evidence is source code or a security incident report.[2]

Enforceability across borders

A foreign vendor will rarely accept the courts of Dhaka, and a Bangladeshi bank will rarely accept the courts of Bangalore. Arbitration gives a neutral forum and an award that can be enforced through the New York Convention. In Bangladesh, a foreign award is enforced on application as a decree of the court under section 45 of the Arbitration Act 2001, and section 46 lists the only grounds on which recognition may be refused.[1] Our guide to foreign arbitral award enforcement in Bangladesh explains the procedure.

What the courts still do

Arbitration does not remove the courts. Where the seat is in Bangladesh, section 7A lets the court grant interim orders, including an ad interim injunction or the appointment of a receiver, before or during the arbitration, and section 21 lets the tribunal order interim measures of protection.[1] If a party sues in breach of a valid clause, section 10 requires the court to refer the parties to arbitration and stay the suit unless the agreement is void, inoperative or incapable of being performed.[1] The specialist commercial courts created under the Commercial Courts Act 2026 handle disputes that stay in court; our guide to intellectual property law in Bangladesh explains how they affect IP claims.

IT and software disputes: where technology arbitration Bangladesh claims come from

Four families of dispute account for most technology claims involving Bangladeshi parties. Each turns on a different part of the contract, and each needs a different evidence plan.

Implementation and delivery failures

The classic dispute is a system that is late, over budget or does not work. The customer says the vendor missed milestones and delivered defective software; the vendor says the customer changed the scope, failed to provide data or staff, and refused acceptance unreasonably. These cases are won on the change-control record, the acceptance-testing documents and the project steering committee minutes. A customer that signs acceptance certificates under pressure to go live, or a vendor that performs extra work without a signed change request, gives away most of its case before any notice of arbitration is served.

SaaS, cloud and service levels

Subscription and cloud contracts generate disputes over availability, response times, data loss and service credits. The questions are whether the service level was measured correctly, whether service credits are the exclusive remedy, and whether a serious outage allows termination. Monitoring logs, incident tickets and root-cause reports are the core evidence, and they are often held by the vendor alone. A Bangladeshi customer should secure contractual rights to that data while the relationship is still working.

Outsourcing and IT-enabled services

Bangladesh's software and IT-enabled services exporters face the mirror image: unpaid invoices, abrupt termination by a foreign client, staff poaching and claims that deliverables infringe third-party rights. These disputes are usually governed by the client's law and seated abroad. Before signing, the Bangladeshi provider should check that the seat is realistic, that the institution's fees are proportionate to likely claim values, and that the limitation of liability works in both directions.

Licence scope, fees and remittances

Licensors claim under-reporting of users, deployment beyond the licensed territory or entity, and unpaid fees. In Bangladesh, the licensee's ability to pay is also a regulatory question, because royalty, technical fee and software payments abroad are governed by foreign exchange rules. Our guide to blockchain law in Bangladesh covers the 2026 remittance rules for technology transfer, software and cloud fees. A licence dispute that ignores those rules can produce an award the licensee cannot lawfully pay.

Escrow, IP clauses and what an arbitrator can decide

Technology contracts allocate three valuable things: the code, the rights in it and the customer's ability to keep running if the vendor fails. Each needs drafting that works alongside the arbitration clause.

Source code escrow

A source code escrow agreement places the vendor's source code, build instructions and documentation with an independent escrow agent, to be released to the customer on defined events such as insolvency, cessation of support or uncured material breach. For a Bangladeshi bank or telecom operator running mission-critical software, escrow is often the only protection that matters. The release triggers must be objective, the deposit must be verified as buildable, and the escrow agreement should say whether a release dispute goes to the agent's own procedure, to expert determination or to the main arbitration. A release that has to wait for a final award is worth very little.

IP ownership and licence clauses

The contract should state who owns bespoke deliverables, what background IP each side keeps, the scope of any licence back, and what happens on termination. Ambiguity here is the most common source of technology disputes we see. Bangladesh has modernised its IP statutes, including the Patent Act 2023, the Design Act 2023 and the Copyright Act 2023; our guide to intellectual property law in Bangladesh covers the framework and our analysis of intellectual property infringement in Bangladesh covers enforcement.

Arbitrability of IP issues

Contractual IP disputes, such as licence scope, royalties, ownership of deliverables between the parties and breach of confidentiality, are commercial disputes that an arbitrator can decide. The Arbitration Act 2001 does not list non-arbitrable subjects, but section 3(3) preserves other laws under which a dispute may not be submitted to arbitration, and an award on a non-arbitrable subject can be set aside under section 43 or refused enforcement under section 46.[1] The validity of a registered right is the risk area: it affects third parties and is decided by the registry or the courts. Draft so that the tribunal decides contractual rights between the parties, while challenges to a registration go to the competent authority.

Urgent relief against misuse

Where code is being copied or confidential data leaked, waiting for a tribunal to be constituted can be fatal. The clause should expressly preserve the right to seek urgent injunctions from the court, and for a Bangladeshi seat section 7A supplies that power.[1] International institutions also offer emergency arbitrator procedures, but an emergency order binds only the parties and may need court support to be effective against a Bangladeshi respondent's servers or bank accounts.

Drafting the technology arbitration Bangladesh clause

Our general guide to the arbitration clause in Bangladesh sets out sample clauses and common defects. For technology contracts, five choices deserve particular care.

Seat and institution

The seat fixes the supervising courts and the setting-aside regime. A Dhaka seat brings the Arbitration Act 2001 into full play, including interim court relief under section 7A and a setting-aside application to the High Court Division within sixty days for an international commercial award.[1] For a mid-sized domestic dispute, BIAC's fast-track procedure applies where the amount in dispute, including counterclaims, does not exceed Taka 50 million, with the award due within three months of the tribunal's constitution.[2] Cross-border contracts often choose Singapore or London instead; see our guides to BIAC arbitration and SIAC arbitration.

Specialist forums

The WIPO Arbitration and Mediation Center specialises in IP and technology disputes and reports more than 3,700 such matters referred to its procedures, arising from software and patent licences, research and development, IT, technology transfer and data processing agreements.[14] It also reports that about 70 per cent of its mediations and 33 per cent of its arbitrations have ended in settlement.[14] For licence-heavy relationships, a WIPO mediation-then-arbitration clause is worth considering.

An expert determination tier

Many technology disagreements are really technical questions: does the software meet the specification, was the outage within the agreed tolerance, what is the correct user count. A clause that sends defined technical questions to a fast expert determination, with arbitration reserved for legal issues and quantum, can save months. The tier must have a fixed timetable, a clear statement of which questions it covers, and an express right to start arbitration if the expert stage stalls.

Electronic agreement and notices

Technology contracts are often formed by click-through, e-signature or email exchange. Section 9(2)(b) of the Arbitration Act 2001 accepts an arbitration agreement made by exchange of letters, fax, email or other telecommunication that provides a record of the agreement.[1] BIAC Rule 5 likewise allows notices by email or other telecommunication that records transmission.[2] Keep the executed version, the platform logs and the version history of the terms; our guide to digital signature law in Bangladesh covers execution.

Data, AI and confidentiality terms

The clause, or a companion protocol, should address confidentiality of the proceedings, permitted use of AI tools, and where evidence containing personal data may be hosted. Settling these points before a dispute is far easier than negotiating them at the first procedural conference.

Proving the case: logs, code and digital records

Technology arbitrations are evidence-driven. The decisive documents are commit histories, ticketing systems, server logs, test reports and messaging threads, not board minutes. Section 24 of the Arbitration Act 2001 provides that the tribunal is not bound to follow the Code of Civil Procedure or the Evidence Act,[1] but where an award may be challenged or enforced in Bangladesh, proof that would satisfy a Bangladeshi court is the safer standard.

The Evidence (Amendment) Act 2022 made digital records admissible in Bangladeshi courts, defining them broadly to include records generated, sent, received or stored electronically, and providing for forensic examination to authenticate digital evidence.[5] The practical lesson is to preserve evidence at source: issue a litigation hold, take forensic images of key systems, document the chain of custody and keep hash values. Opponents increasingly allege that screenshots or exported logs have been edited, and a forensic record answers that allegation quickly.

AI in international arbitration: tools parties and counsel use

Artificial intelligence is already embedded in arbitration practice. Counsel use AI for document review, translation, chronology building, legal research and first drafts; experts use it to process data sets; institutions use it for case management. In technology arbitration Bangladesh parties run, the efficiency gain is real, particularly in disputes with large English and Bangla document sets that need translation.

The risks counsel must manage

Three risks dominate. First, accuracy: generative tools can invent authorities or misstate facts, and a submission that cites a non-existent case damages credibility with the tribunal. Second, confidentiality: uploading pleadings, witness statements or source code to a public AI service may breach confidentiality duties under BIAC Rule 30 or the parties' own agreement.[2] Third, data protection: personal data processed through an AI service may be transferred abroad, engaging the Personal Data Protection Act 2026 and, for EU data, the GDPR. Every AI tool used in a matter should be approved, closed to model training on client data, and recorded.

Bangladesh's AI policy position

Bangladesh has no AI statute. The Draft National AI Policy Bangladesh 2026 to 2030, published in January 2026, proposes prohibited, high-risk, limited-risk and low-risk tiers, algorithmic impact assessments and strict human oversight for high-risk uses, an independent oversight committee to be created by an Act of Parliament, and a permanent AI Act by 2030.[6] Our guide to technology law in Bangladesh tracks how the elected government is taking that work forward.

When arbitrators use AI: due process and enforceability

The harder question is the tribunal's own use of AI. Parties pay for an arbitrator's judgment. If that judgment is replaced, rather than assisted, by a machine, the award is exposed.

The CIArb Guideline of 2025

In July 2025 the Chartered Institute of Arbitrators published its Guideline on the Use of AI in Arbitration. It accepts that arbitrators may consider using AI tools within their mandate, encourages them to consult the parties on any AI tool they use, and indicates that disclosure may be required where AI use affects the evidence or the outcome or involves delegating a duty owed to the parties.[7] It treats regulation of the parties' AI use as part of the tribunal's general power to conduct the proceedings, and includes a template AI agreement and a template procedural order with specific rules for high-risk AI tools.[7]

The LaPaglia v Valve test case

In LaPaglia v Valve Corp, a claimant asked the US District Court for the Southern District of California to vacate an American Arbitration Association award, alleging that the arbitrator had relied on AI in reaching it. On 9 December 2025 the court dismissed the amended petition for lack of subject-matter jurisdiction and did not reach the AI argument.[8] The case settled nothing on the merits, but it shows the shape of future challenges: unusual factual references, rapid drafting and an arbitrator's own remarks about AI will be used as circumstantial evidence.

The EU AI Act and enforcement risk

The EU AI Act treats certain AI systems used in legal decision-making, including in alternative dispute resolution, as high-risk. Commentators have argued that an enforcing court could refuse recognition under Article V(2)(b) of the New York Convention on procedural public policy grounds if a tribunal relied on non-compliant AI.[9] For an award likely to be enforced against assets in the EU, the tribunal's AI practice is therefore an enforceability question, not just an ethical one.

The position under Bangladeshi law

The Arbitration Act 2001 says nothing about AI, but its due process provisions apply directly. Section 23 requires each party to be given a reasonable opportunity to present its case, and section 43 allows a Bangladeshi-seated award to be set aside where a party could not present its case, where the procedure departed from the parties' agreement, or where the award conflicts with the public policy of Bangladesh.[1] An award resting on AI-generated facts outside the record, which the parties never had a chance to address, invites exactly those challenges. A procedural order that records what AI use is permitted, and requires disclosure of material use, is the simplest protection for everyone.

Crypto arbitration and Bangladeshi parties

Crypto arbitration is now a recognised international practice area, covering exchange account disputes, token sale claims, DeFi protocol failures, mining and hosting contracts and custody losses. For anyone in Bangladesh, the analysis begins with a domestic prohibition. Our guide to blockchain law in Bangladesh explains the regulatory position in depth; the points below concern disputes.

The 2022 prohibition

Bangladesh Bank's FE Circular No. 24 of 15 September 2022, issued under section 20(3) of the Foreign Exchange Regulation Act 1947, states that transactions in, from or to Bangladesh to obtain virtual assets or virtual currencies are not permitted, that facilitating exchange, transfer or trading of virtual assets is not permitted, and that persons and entities operating in Bangladesh must refrain from dealing in them.[4] Violations are treated as contraventions of section 5(1)(e) of the Act, subject to cognizance under section 23(1).[4]

Illegality and public policy at enforcement

That prohibition shapes every crypto arbitration involving a Bangladeshi resident. An award enforcing a crypto trade, a token purchase or a crypto-denominated debt against a person in Bangladesh may be resisted under section 46 on public policy grounds, and a Bangladeshi-seated award may be set aside under section 43 as conflicting with public policy or being prima facie opposed to the law of Bangladesh.[1] The same illegality can cut the other way: a Bangladeshi claimant suing an offshore exchange may find its own conduct examined. Assess the illegality risk before serving a notice, not after the award.

The consumer lesson from Payward v Chechetkin

Crypto platforms routinely impose arbitration clauses on retail users. In Payward v Chechetkin [2023] EWHC 1780 (Comm), the English Commercial Court refused to enforce a San Francisco JAMS award obtained by the operator of the Kraken exchange against a UK customer. It held that the customer was a consumer, that the Californian arbitration clause was unfair under the Consumer Rights Act 2015, and that enforcement would be contrary to public policy because it would shut out his claim under the Financial Services and Markets Act 2000.[12] Platforms cannot assume that a one-sided clause will survive enforcement where consumers are involved.

On-chain rules and digital asset property

Specialist rules have emerged. The UK Jurisdiction Taskforce's Digital Dispute Resolution Rules, published on 22 April 2021, provide for an English seat, a target of determination within 30 days of appointment, optional anonymity, and tribunal power to operate, modify, sign or cancel digital assets using the parties' keys, with no appeal on a point of law.[13] These tools are attractive for smart-contract disputes between sophisticated offshore parties, but they do not cure the Bangladeshi illegality problem for residents.

Tracing, freezing and evidence

Crypto disputes often involve fraud, so speed and tracing matter more than the merits. Blockchain analytics can follow funds to exchange wallets, and courts in several jurisdictions grant freezing and disclosure orders against exchanges. Arbitration may follow, but the first steps are usually in court where the exchange sits. Where hacking or fraud is involved in Bangladesh, the Cyber Security Act 2026 may also be engaged; see our guide to cyber law in Bangladesh.

Data protection in international arbitration

Every arbitration processes personal data: names in emails, employee records, customer databases, CCTV and call recordings. Technology disputes process more of it than most, and moving it between parties, counsel, experts, institutions and arbitrators in several countries engages data protection law at each step. Data protection is no longer a background compliance point in technology arbitration Bangladesh parties run; it is a procedural issue for the first case management conference.

Why the GDPR reaches Bangladeshi parties

The GDPR applies to processing in the context of an EU establishment and to processing related to offering goods or services to people in the EU.[11] A Bangladeshi outsourcing provider serving EU clients, or a Bangladeshi party arbitrating against an EU company whose counsel and arbitrators sit in Europe, will meet GDPR requirements on lawful basis, minimisation, transfers and security, whatever the seat.

The ICCA-IBA Roadmap

The ICCA-IBA Roadmap to Data Protection in International Arbitration, launched at the ICCA Congress in Edinburgh on 20 September 2022, is the leading practical guide.[10] It treats parties, counsel, tribunal members and the institution as likely controllers of their own processing, recommends mapping data flows and applicable laws at the outset, minimising personal data and using redaction or pseudonymisation where possible, recording a data protection protocol that allocates responsibilities, and putting processing agreements in place with vendors such as translators and transcribers.[11] For transfers out of the EU it points to adequacy decisions, standard contractual clauses or a narrow derogation for legal claims, used only where genuinely necessary.[11]

Bangladesh's Personal Data Protection Act 2026

Bangladesh now has its own regime. The Personal Data Protection Act 2026, Act No. 63 of 2026, passed in April 2026 and repealed the 2025 ordinance.[3] It applies to processing outside Bangladesh connected with offering products or services to, or monitoring, data subjects in Bangladesh; classifies sensitive and sensitive personally identifiable data; restricts large-scale cross-border transfers of categories such as national identity, biometric, genetic and criminal record data; and provides administrative fines of up to Taka 25 lakh for security and data subject rights failures, and up to Taka 50 lakh for significant data fiduciaries.[3] The Authority can also order suspension of transfers abroad.[3] Our guide to Bangladesh data protection law in 2026 covers the regime in detail.

Building a data protection protocol

In practice, personal data in an arbitration with a Bangladeshi party should be handled under a short protocol, ideally embedded in the first procedural order. It should identify the categories of personal data expected, the lawful basis relied on, the platform where documents will be hosted and its location, security standards including encryption and access controls, rules for redaction, restrictions on AI tools, breach notification between participants, and retention and deletion after the award. Health, banking and telecom data deserve special care; our analysis of patient data and cloud hosting in Bangladesh shows how sector rules add to the general law.

Cyber security of the proceedings

Arbitrations are targets. Phishing of payment instructions, compromised email accounts and leaked hearing bundles have all occurred internationally. Use a secure case platform rather than email attachments, verify any change in bank details by telephone, and agree how a cyber incident affecting the proceedings will be reported to the tribunal and the other side.

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Critical mistakes in technology arbitration Bangladesh disputes

Signing acceptance to go live

Acceptance certificates signed to meet a launch date are the vendor's best evidence. If defects remain, accept with a written defect list and a reservation of rights.

Escrow that has never been tested

An escrow deposit that cannot be built into working software is worthless on release. Require verification at deposit and after major releases.

Leaving IP validity inside the clause

Asking a tribunal to cancel a registered right invites an arbitrability challenge under sections 43 and 46.[1] Keep validity with the registry or the court and contractual rights with the tribunal.

Uploading the file to a public AI tool

One careless upload can breach confidentiality and data protection duties together. Approve tools centrally and record their use.

Ignoring the crypto prohibition

A Bangladeshi resident who pursues or defends a crypto claim without considering FE Circular No. 24 of 2022 may win an award it cannot enforce, or expose itself to regulatory risk.[4]

Treating data protection as an afterthought

Raising transfer restrictions halfway through document production delays the case and can lead to sanctions. Agree a protocol at the outset.

Technology arbitration Bangladesh: what to watch in 2026 and 2027

Four developments will shape technology arbitration Bangladesh parties face over the next year. First, the regulations, transfer rules and enforcement practice of the data protection authority under the Personal Data Protection Act 2026.[3] Second, whether the elected government turns the 2026 draft AI policy into legislation, and whether it addresses AI in courts and arbitration.[6] Third, whether institutions, including BIAC, adopt AI rules modelled on the CIArb Guideline.[7] Fourth, whether Bangladesh Bank revisits its virtual asset prohibition, which would change the legality analysis for crypto claims overnight.[4]

For a Bangladeshi technology business, the agenda is practical: review the dispute clauses in key vendor, licence and outsourcing contracts, put escrow and data rights in place before they are needed, and adopt a written policy on AI and data handling in disputes. TRW's international arbitration practice acts on technology disputes seated in Dhaka and abroad.

Frequently asked questions

What is technology arbitration in Bangladesh?

Technology arbitration Bangladesh parties use is arbitration of disputes under software, IT services, SaaS, cloud, outsourcing, licence and other technology contracts involving Bangladeshi parties. Where the seat is in Bangladesh it is governed by the Arbitration Act 2001; foreign awards are enforced under sections 45 and 46.[1]

Can an email exchange or click-through create a valid arbitration agreement?

Yes, if it provides a record of the agreement. Section 9(2)(b) of the Arbitration Act 2001 accepts agreements made by exchange of letters, fax, email or other telecommunication.[1] Keep the platform logs and the version of the terms accepted.

Can an arbitrator decide intellectual property disputes?

Contractual IP disputes between the parties, such as licence scope, royalties and ownership of deliverables, are generally arbitrable. Validity of a registered right affects third parties and is safer left to the registry or the courts, because an award on a non-arbitrable subject can be set aside or refused enforcement.[1]

Why does source code escrow matter in a dispute?

It lets the customer keep critical software running if the vendor fails or stops support. Release triggers should be objective and release disputes should have a fast route, so the customer does not wait for a final award.

Can I get an urgent injunction in Bangladesh if a technology contract has an arbitration clause?

Where the seat is in Bangladesh, section 7A of the Arbitration Act 2001 allows the court to grant interim orders, including an ad interim injunction, before or during the arbitration, unless the parties have agreed otherwise.[1]

May an arbitrator use AI to draft an award?

The CIArb Guideline of 2025 accepts that arbitrators may use AI tools within their mandate, encourages consultation with the parties, and indicates that disclosure may be required where AI affects the evidence or outcome or involves delegating a duty.[7] The decision itself must remain the arbitrator's.

Could AI use by a tribunal make an award unenforceable?

Potentially. If AI introduced facts outside the record that the parties could not address, the award may be challenged for denial of a reasonable opportunity to present a case or for conflict with public policy under the Arbitration Act 2001, and similar arguments are being made under the New York Convention.[1] [9]

Is cryptocurrency legal in Bangladesh?

No. FE Circular No. 24 of 2022 states that transactions in, from or to Bangladesh to obtain virtual assets are not permitted and directs persons operating in Bangladesh to refrain from dealing in them.[4] That prohibition creates illegality and public policy risk for crypto awards involving Bangladeshi residents.

Does the GDPR apply to an arbitration with a Bangladeshi party?

It can. The GDPR applies to processing by EU-established participants and to processing related to offering goods or services to people in the EU, so EU counsel, arbitrators or counterparties bring it into the case.[11] The ICCA-IBA Roadmap explains how to comply.[10]

Does the Personal Data Protection Act 2026 affect arbitration evidence?

Yes. The Act reaches certain processing outside Bangladesh, restricts large-scale transfers of sensitive identifiers and allows the Authority to suspend transfers abroad, so evidence containing Bangladeshi personal data should be handled under a data protection protocol.[3]