In today’s increasingly globalized world, international commercial dispute has emerged as an essential component of many nations’ economic development strategies, including Bangladesh’s. On the other hand, the proliferation of international trade has led to a rise in the possibility of meeting disagreements on economic matters.
It is crucial to retain trust and stability in international business partnerships, which can only be accomplished by resolving these issues in an expedient and fair manner. In this article, we will investigate the several approaches that may be taken in order to settle a international commercial dispute in Bangladesh. We will focus on the benefits of these approaches, as well as the challenges that they provide, as well as the part that they play in fostering an atmosphere that is amenable to international commerce.
Advantages of international commercial dispute
1. Negotiation of international commercial dispute
Negotiation is often the first step in resolving an international commercial dispute in Bangladesh. It involves direct communication between the parties involved, where they attempt to reach a mutually agreeable resolution through compromise and discussion.
- Informal and Cost-Effective: Negotiation is a relatively informal and cost-effective method of dispute resolution.
- Maintains Control: Parties have control over the negotiation process and the final outcome.
- Preserves Relationships: It can help preserve business relationships by resolving disputes amicably.
- Customized Solutions: Parties can craft customized solutions that suit their specific needs.
- Dependent on Willingness: The success of negotiation depends on the willingness of both parties to compromise and reach an agreement.
- Ineffectiveness for Complex Disputes: Negotiation may not be suitable for highly complex or contentious disputes where parties are unwilling to collaborate.
Mediation is a voluntary and non-binding process where a neutral third party, the mediator, assists the disputing parties in reaching a mutually acceptable resolution. The mediator does not make decisions but facilitates communication and helps the parties explore potential solutions.
- Impartial Facilitator: Mediation involves an impartial mediator who can help reduce tensions and encourage constructive dialogue.
- Confidential Process: Mediation proceedings are typically confidential, protecting sensitive information.
- Customized Resolutions: Parties can craft creative and customized solutions to their disputes.
- Cost and Time Savings: Mediation is generally faster and less costly than litigation.
- Voluntary Participation: Mediation requires the willingness of both parties to participate in good faith.
- Non-Binding Outcomes: Mediation outcomes are non-binding, and parties may choose not to adhere to them.
Arbitration is a formal and binding method of resolving international commercial disputes. It involves a neutral third party or a panel of arbitrators who render a final and enforceable decision. Parties agree in advance to abide by the arbitrator’s decision.
- Parties Control the Process: Parties have more control over the arbitration process compared to litigation.
- Efficiency: Arbitration can be faster and more flexible than court proceedings.
- Expertise: Arbitrators with expertise in the subject matter can provide specialized decisions.
- Enforceability: international commercial disputes recognition and enforcement of arbitral awards under the New York Convention.
- Costs: Arbitration can be costly, especially in complex cases.
- Limited Opportunities for Appeal: Arbitration awards may have limited opportunities for appeal.
- Finality: Final awards can be challenging to challenge in court.
4. Litigation in National Courts
Litigation in national courts is another method of resolving international commercial disputes in Bangladesh. Parties bring their dispute to a court in the jurisdiction of one of the parties involved, often referred to as transnational litigation.
- Access to Established Legal Systems: Parties have access to established legal systems and procedures.
- Legally Enforceable Decisions: Court decisions are enforceable by law.
- Public Scrutiny: Court proceedings provide an opportunity for public scrutiny and legal precedent.
- Time-Consuming and Expensive: Litigation can be a lengthy and costly process.
- Unpredictable Outcomes: Court decisions may be unpredictable, and outcomes may vary.
- Jurisdictional Challenges: Jurisdictional issues can arise in international cases.
- Potential for Strained Relationships: Litigation may strain business relationships, especially in cases involving long-standing business partners.
5. Online Dispute Resolution (ODR)
In the digital age, online dispute resolution (ODR) methods have gained prominence. ODR uses technology to facilitate the resolution of disputes, and it can involve negotiation, mediation, or arbitration. These processes occur through digital platforms and communication tools.
- Convenient and Accessible: ODR is convenient and accessible, especially for cross-border disputes.
- Cost-Effective: ODR may be more cost-effective than traditional methods.
- Rapid Communication: ODR allows for rapid communication and document sharing.
- Technological Comfort: Parties must be comfortable with technology for ODR to be effective.
- Security and Privacy Concerns: Security and privacy concerns must be addressed.
- Enforceability: Ensuring the enforceability of decisions in ODR can be a challenge.
6. Choice of Forum Clauses
Choice of forum clauses are contractual provisions where parties agree in advance on the jurisdiction in which any disputes will be resolved. These clauses are commonly used in international commercial dispute agreements to streamline the dispute resolution process.
- Clarity and Predictability: Choice of forum clauses provide clarity and predictability.
- Expertise in Commercial Disputes: Parties can choose a jurisdiction with expertise in commercial disputes.
- Simplifies the Process: It can simplify and expedite the resolution process.
- Careful Drafting: Choice of forum clauses must be carefully drafted to be enforceable.
- Bargaining Power: Parties may have unequal bargaining power when negotiating these clauses.
7. Expert Determination
Expert determination involves appointing a subject matter expert to provide a binding decision on specific technical or factual issues in a dispute. It is commonly used in disputes where specialized knowledge is required, such as in construction or technology contracts.
- Speedy Resolution for Technical Disputes: Expert determination can lead to speedy resolution for technical disputes.
- Efficiency and Cost-Effectiveness: It is an efficient and cost-effective way to address limited technical or factual issues.
- Access to Expertise: Parties have access to an expert’s specialized knowledge.
- Limited Applicability: Expert determination is most suitable for cases where technical or factual issues predominate.
- Limited Decision Scope: Decisions are typically limited to the specific technical or factual issue in question.
Conciliation is a process similar to mediation, with the conciliator playing a more active role in guiding the parties toward a resolution. The conciliator provides suggestions and encourages cooperation while facilitating discussions.
- Facilitates Communication and Cooperation: Conciliation can help parties communicate effectively and cooperate in resolving disputes.
- Customization: It can be tailored to the specific needs and preferences of the parties.
- Confidential Process: Conciliation proceedings are typically confidential.
- Dependent on Conciliator’s Skills: The success of conciliation depends on the skills and experience of the conciliator.
- Outcomes Are Non-Binding: Conciliation outcomes are non-binding.
9. Hybrid Dispute Resolution
Hybrid dispute resolution methods combine two or more of the above techniques to suit the specific circumstances of the dispute. For example, a negotiation may transition into mediation, and if unsuccessful, proceed to arbitration.
- Flexibility: Hybrid dispute resolution provides flexibility in choosing the most suitable methods.
- Adaptability: It can adapt to complex and evolving disputes.
- Cost-Efficiency and Effectiveness: It can optimize cost-efficiency and effectiveness.
- Multiple Agreements and Procedures: Hybrid methods may require multiple agreements and procedures.
- Consistency and Fairness: Ensuring consistency and fairness in the process can be challenging.
International commercial disputes are an inherent part of the global business landscape. The choice of dispute resolution method in Bangladesh will depend on the nature and complexity of the dispute, the parties involved, and their objectives.
By having a variety of methods at their disposal, businesses and individuals engaged in international commerce can tailor their approach to each unique situation. Effective dispute resolution not only resolves conflicts but also maintains trust and confidence in international trade relationships, ultimately contributing to a more stable and prosperous global economy.