One way to characterize a Commercial Disputes is as a disagreement that develops between parties involved in a Commercial Disputes transaction. Which leads to disagreements on monetary matters, such as price, the amount of products, or other topics.
Therefore, a disagreement between two or more enterprises about the provision of products or services may be considered to be an example of a commercial conflict. In spite of the fact that disagreements may be settled in a variety of ways, the focus of this article will be on the arbitration process, which is one method for doing so.
Arbitration: In the process of resolving a dispute via arbitration, the parties to the conflict reach an agreement that the concerns they have with one another will be decided or resolved by a neutral and independent third party.
The side further acknowledges that the arbitrator’s judgment will be binding upon them and will be the last word on the matter. The Arbitration Act of 2001 is the governing document for the arbitration procedure in Bangladesh.
Organizing an arbitration: The contesting parties will have the opportunity to choose the location of the arbitration proceedings. Who exactly will sit on the arbitration panel, and what is the process that will be followed throughout the arbitration?
In addition, any party may seek a settlement via any of the available arbitration institutions. The manner in which the arbitral tribunal will be assembled is something that the parties themselves should decide. According to the case of Bux Shipping Line vs.
Bangladesh Water Development Board & others, 2002, 31 CLC (AD), the term of time for ending an arbitration procedure is set at a period of four months, which is mentioned in section 3 of the First Schedule of the Arbitration Act. This amount of time is fixed.
Regarding the formal arbitration procedure, the following are the Commercial Disputes that are being discussed:
Arbitration clause: Arbitration clauses are essential to be included in a business contract since, in the absence of such provisions, it would be difficult to ascertain to what organization or court the parties will turn in order to reach a settlement.
Therefore, the agreement must be written down and signed by both parties. The paragraph that should be included in the agreement must state that the institution has the authority to settle the issues or the procedure for doing so.
Because it produces binding consequences for the parties and then prohibits court interference in the resolution of a dispute, the arbitration provision is important. At the very least, before the award is rendered, the court cannot become involved in the matter.
In addition to this, it provides the arbitrators with the authority to resolve any issues that may arise between the parties, which paves the way for effective procedures and an award that is legally enforceable.
It is important to note that even in the absence of a specific arbitration provision, a dispute may still be resolved by the parties themselves via the use of a separate arbitration agreement. This agreement must include the whole process of arbitration as outlined in chapter III of the Arbitration Act of 2001.
legislation that applies to the Arbitration Process The arbitration clause is often controlled by the same legislation as the rest of the contract, and the legality of the provision will be evaluated in accordance with the law of that nation.
Because an arbitration provision is its own separate entity that exists outside of the contract, the procedure of arbitration is open to the application of a variety of legal systems. Therefore, in the event that one of the parties to the contract desires for the law that governs the arbitration provision to be different from the law that governs the contract as a whole, the arbitration clause should specifically specify that this need is necessary.
If both parties agree, the lex arbitri rule may also be put into effect. If the law of a third country is to be used, every effort should be made to ensure that it is of the same sort of legal system as one’s own national law, if that choice is made.
The arbitrator has the right to reject to implement a law in certain circumstances, such as when a party adopts a legislation that is detrimental to the public interest.
Composition of the Arbitral Tribunal: The composition of the tribunal is discussed in chapter IX of the Arbitration Act, which was passed in 2001. An arbitrator may be of any country, although in general, the chair of a three-member arbitral tribunal and a solitary arbitrator must be of the same nationality.
The number of arbitrators: Numerous country laws governing arbitration stipulate that there must be an uneven number of arbitrators. Arbitrators in Commercial Disputes often number one, but sometimes all three. The party may decide whether they want one, three, or none at all.
Arbitrator Serving Only One Party When there is only one arbitrator serving both parties, the parties have the choice of either choosing the arbitrator in advance or choosing them after a conflict has arisen. When there is a disagreement, it is common practice to choose a single arbitrator to resolve the issue.
The parties need to come to an agreement on how the arbitrator will be chosen and how he will carry out his duties as the arbitrator. Additionally, the appointment may be made by an arbitration institution if that institution so chooses.
More Than One Arbitrator The typical number of arbitrators in cases involving more than one is three. Each party is responsible for the appointment of its own arbitrator, and the two arbitrators who were selected by the parties then choose the third arbitrator who will preside over the arbitration hearing.
In the event that the appointment of any of the arbitrators is delayed for whatever reason, an appointing authority has to be identified so that the arbitrators may be appointed. When it comes to selecting each arbitrator, the party that is making the claim must inform the party that is being responded to of its request for arbitration in writing and by sending it by registered mail or by using a courier service.
In addition, the party making the claim must concurrently pick an arbitrator. Following the acceptance of the request for arbitration, the responding party is required to provide a response, which must be in writing and sent by registered mail or a courier service. The answer must also include the respondent party’s selection of an arbitrator.
Procedures Involved in Arbitration Since arbitration is an informal process, the arbiter will continue things in whichever manner he or she feels appropriate.
The process of the arbitration begins with the applicant filing an application, and although the hearing may be oral or written, the majority of the time it is written. The arbitrator may need oral or written testimony from witnesses and proof, depending on what they judge to be appropriate.
The method outlined in the Evidence Act of 1872 must be followed in order for the evidence to be taken into consideration in accordance with the Arbitration Act of 2001.
Language of the Arbitration: In most Commercial Disputes transactions, the contract is made in more than one language in order to ensure that the transaction goes as smoothly as possible. In most cases, the disputing party has the ability to choose the language that will be used throughout the disagreement; nevertheless,
if the parties are unable to come to an agreement. If this is the case, the language that was spoken throughout the negotiating process as well as the fulfillment of the contract must be fluent.
judgment: If the parties are able to achieve a settlement agreement during the course of the arbitration, they may request that the terms of the settlement be included in the judgment.
In most cases, a decision of an arbitration panel will be made based on the majority vote of the arbitrators, and if that fails, the decision will be made by the president of the panel. In the event that there is only one arbitrator, the president has the ability to issue the award.
The victorious party has the option of petitioning the national court of the losing party in order to have the award put into effect. It should be brought to everyone’s attention that the parties will be required to abide by the award.
Under the Arbitration Act of 2001, a party has the right to appeal the result in certain extraordinary circumstances, and they also have the right to seek that the verdict be overturned.
In accordance with the Arbitration Act, 2001, the High Court Division may, on the application of a party and within sixty days of the party’s receipt of the award, set aside an arbitral award that was rendered in an international commercial arbitration that was conducted in Bangladesh.
This power is granted to the High Court Division. For instance, in the case of Nurul Abser vs. Golam Rabbani, 68 DLR (AD) (2016) indicates that an application to set aside an arbitral decision must be lodged within 60 days, and after the expiration of 60 days, the award becomes enforceable.
This was said in the context of the case in which the award was being challenged. Due to the fact that the petitioning party did not submit a challenge to the decision within the allotted amount of time, the award has now become final and is subject to enforcement.
The enforcement of arbitral awards is discussed in Chapter IX of the Arbitration Act of 2001. This section of the act is titled “The Enforcement of Awards.” If the time limit for filing an application to set aside the arbitral award has passed or if such an application has been denied, then the request for enforcement of the award should be submitted in accordance with the Code of Civil Procedure, in the same way as if it were a decision of the Court.
This is the same procedure that must be followed. The court will carry out the execution of the foreign arbitral award in the same way as it would if it were a decree issued by the court. This will ensure that the award is legally binding.
Appeals: In accordance with the Arbitration Act of 2001, the High Court Division is the appropriate venue for any appeals brought on the following grounds:
a) The decision to vacate an arbitral award or the refusal to vacate the award,
(a) Refusing to implement the decision of the arbitrator, and
(c) Refusing to accept or enforce any decision made by an international arbitral tribunal.
Cost: The amount of money spent on the arbitration process may be affected by the number of arbitrators involved. The cost of one arbitrator is much lower than that of three. There’s also the possibility that the parties may agree on the fee before the arbitration ever begins. In terms of the institution’s role as arbitrator, the fee will be determined by the institution.
In conclusion, it is possible to state that since there are various institutions of arbitration, the parties are able to choose a regulated professional organization as their preferred option. The parties are enticed to settle their disagreement via arbitration since it is often a secret procedure, and this draws them to choose arbitration over going to court because the process is quicker. Because the results reached in the arbitration are legally binding across international borders, it is well suited for conflicts involving many nations.