Justice Latifur Rahman :
Alternate Dispute Resolution (ADR) is gaining popularity all over the world, including developing countries like Bangladesh. Various forms of alternative dispute resolutions have been in existence in every society from time immemorial. Most human disputes can be profitably resolved outside the court room without unnecessary loss of time and money. ADR can be brought under two broad categories, namely (1) resolution of disputes outside the Court and (2) court-sponsored programs through which disputes may be resolved without a full trial.
Arbitration may be regarded as the fastest growing method selected by parties to resolve their disputes. It flows from the perception that arbitration is a faster and more economic way to resolve domestic and international commercial disputes.
I would like to emphasise that mediation as a form of ADR is an art. One cannot work as a successful mediator unless he or she learns the skill and technique of mediation. In that perspective, the training of Mediation is very important in Bangladesh where we talk of introducing mediation at all possible levels of our court system. We must try to understand at the initial stage the difference between mediation and arbitration. In mediation, a dispute is resolved through mutual consent of the parties; whereas in arbitration the arbitrator passes an award upon evidence presented by the parties.
Lord Woolf, a former Chief Justice of UK in his report described mediation as a form of facilitation of disputes including family disputes, neighbour disputes, industrial and commercial relations.
In our country, since mediation is not in practice, Judges and lawyers who are selected as mediators must have some basic training as to how a dispute can be resolved quickly and within less expenses. For that we need special skill, we need education, training and experience in mediation procedures. I understand that in the United States of America, in many jurisdictions, mediation as an alternative dispute resolution has become a popular mechanism. While I was the Chief Justice of Bangladesh, Mr Justice Clifford Wallace of USA, a retired Justice of the 9th Federal Circuit Court, told me that mediation was being practised in his country for more than 60 years. According to him, this mechanism has brought a great deal of success in reducing backlog of cases with good results.
I am confident that giving effective training to the judicial officers, lawyers and others, we can reap the benefit of mediation in our country. Benefits of mediation are manifold. Procedures can be modified to meet the needs of a particular case. One very important thing is the trust in the mediator. If the parties trust the mediator and take him in confidence then the dispute could be easily resolved. I am sure that the mediator, with some knowledge or expertise in the area of dispute, can settle disputes peacefully with less trouble.
From our common experience we have found that at times small disputes may be settled by negotiation between neighbours, friends and relations. In many cases better results have followed from such informal mediations than that can be obtained through a formal court proceeding. Even big companies decide to mediate business disputes and claims as they do not like to prolong their litigations in court proceedings which is harmful to the interests of the business community.
Strictly speaking, mediating can include arbitration. The Arbitration Act, 2001 contemplates settlement of disputes. According to Section 22 of the Arbitration Act, 2001, in the midst of an arbitration the parties can settle the matter and award may be passed on agreed terms in accordance with Section 38 of the Act. This is really a compromise, in other words a mediation. Mediation is less expensive as it does not require the appointment of an attorney, parties and the mediator disposes the case quickly in a non-formal court procedure. Confidentiality is maintained in mediation.
Mediation is also a form of alternative dispute resolution (ADR), a way of resolving disputes between two or more parties with the help of a mediator who is an expert in this method. The mediator knows the skill as to how the dispute between the parties can be resolved.
In arbitration, the arbitrator acts like a judge, but in mediation the dispute is resolved in an out of court settlement and it is less formal.
Mediation is very common in domestic disputes, such as, divorce, child custody visitation. In developed countries like USA and Europe mediation is practised in almost all cases of contract and civil damage cases.
Mediation does not always result in a settlement. It may fail and then the parties can have recourse to law suits.
Arbitration in USA dates back to the eighteenth century; whereas mediation is referable to nineteenth century.
There is no scope of appeal in mediation, whereas in arbitration appeal is provided under the law. Mediation agreement is enforceable in a court of law.
We are in the midst of economic development when our institutions and procedures for dispute settlement must be made efficient, fair and business-friendly. We live in a global village and our business, commerce, trade and industry are extended throughout the globe and there is interchange and exchange of commerce and trade for the benefit of all the countries of the world. Today, no nation can live in isolation and, in fact, the frontiers of trade and commerce have extended the boundaries of nations. Hence it is profitable to settle commercial disputes quickly, outside the rigours of Strict Court Procedure.
I may mention that the Jurisprudential Concept and the philosophy relating to arbitration have undergone a great change due to free market economy throughout the world. Free-market economy presupposes freedom of the parties to transactions without state interference and statutory constrains as far as possible, which is true in case of domestic as well as international transactions. As Bangladesh is a developing country, it is entering into various international commercial transactions with different countries for its economic development.
And hence the Bangladesh International Arbitration Center (BIAC) has a significant role to play in the context of “The Arbitration Act. 2001 and BIAC Arbitration Rules 2011. The international business community desires quick settlement of disputes instead of a lengthly judicial encounter. A foreign award is also enforceable in Bangladesh as if it were an award made on a matter referred to arbitration of Bangladesh.
The court’s intervention is necessary when it is only indispensable.
I must put on record that in Bangladesh the period of conclusion of arbitration proceedings needs to be minimized; otherwise this method of dispute resolution will be meaningless and interest in it will decline.
In Sri Lanka, ADR is being practised both in Civil and Criminal jurisdictions.
At present Conciliation Board Act. 1958 is in force in Sri Lanka and and in a reported decision of the Srilanka Supreme Court it was observed as follows:
“The Act was intended to provide an expeditious and inexpensive means of settling disputes between the parties without the necessity of having recourse to the complicated process of law suit.”
In India, Lok Adalat has been set up in several states under Legal Service Authority Act, 1987, and the People of India are getting positive benefits out of arbitration, In India, through ADR a large number of cases are being decided every year.
In Bangladesh, The Arbitration Act 2001 was enacted on 24th January, 2001, relating to international commercial arbitration, recognition and enforcement of foreign arbitral award and other arbitrations including domestic arbitration. This new law has been made on the basis of UNCITRAL model law prepared by the United Nations Commission on International Commercial Arbitration. This enactment is a step forward in the matter of speedy disposal of commercial disputes and has ushered in an era of dispute settlement procedure.
While dealing with several arbitrations as Chairman, I found that the Arbitration Act, 2001 is a comprehensive law dealing with the subject of arbitration. But from my personal experience, I can also vouchsafe that the litigating parties at times do not get quick result of the arbitration as the disposal of arbitration takes unusually long time. There are instances where arbitrations take 4(four) to 5(five) years from the passing of the award itself before a tribunal.
I can cite one instance, where a Thai party in the arbitration left the arbitration due to delay in disposing the arbitral proceedings before me. The Thai party brought many equipment and accessories from Thailand after custom clearance. I do not know what had happened to those equipments and to that party. Late Dr. Mohammad Zahir, Bar-at-Law, was a lawyer in that case.
I may point out that the appeal procedure after the award has also become very lengthy in our country. Truly speaking, as the Arbitration Act, 2001 stands now, the jurisdiction and scope of appeal is very limited. But in many cases, the District Court/High Court Division entertain an appeal and in that process it takes a very long time for final adjudication upto the Appellate Division of the Supreme Court.
I may point out here that if an award is made under Section 38 of the Act one can challenge the award on the grounds specified under Section 43 of the Act. The grounds enumerated are, that a party to the arbitration agreement is under some legal incapacity; that the arbitration agreement is not valid under the law; that the applicant was not given any notice of the appointment of an arbitrator or of the arbitral proceedings or that he was prevented by sufficient reason from presenting his case before the tribunal, or that the award is made on matters not submitted to the arbitration tribunal; or that the composition of arbitration tribunal was not in accordance with the provisions of the Act. Further, when it is established to the satisfaction of the court that the subject matter of the dispute is not capable of settlement by arbitration under the law in force in Bangladesh; or that the award is exfacie opposed to the public policy or the law of Bangladesh and that the award is induced or procured by corruption or fraud.
These grounds are related practically to the Jurisdiction and procedure adopted by the tribunal; but not related to the merit of the case at all. The District Court/the High Court Division in appellate Jurisdiction has no authority and power to entertain an appeal other than those grounds mentioned above. But I have noticed that the appellate courts in many cases enter into the merit of the case and thereby the appeal is wrongly admitted and final hearing and conclusion of it takes a very long time, contrary to the objective of the Arbitration Act.
The appellate court cannot set-aside an award on the ground that a separate interpretation or opinion could be taken by the arbitrator differently on the merit of the case. The decision of the arbitral tribunal is final and the appellate court in many cases illegally sit as a court of appeal.
In the case of KM Shafi Ltd. vs Government of Bangladesh, 1982 reported in BLD at page 111, and Bangladesh T & T Board vs Lili Enterprise Ltd., 50 DLR (AD) at page 63, the correct appellate jurisdiction against an arbitral award has been enunciated by the higher court. Before entertaining an appeal the appellate Court should scrutinize Section 43 of the Act.
I may point out here that in the United States of America, the scope of appeal is also very limited, FAA (Federal Arbitration Act) states four grounds of appeal: (1) The award is corrupt/fraudulent; (2) Arbitrators misconducted in the proceedings, (3) where arbitrators are partial; and (4) where arbitrators exceeded their jurisdiction. Strictly speaking, close scrutiny will show that the above grounds are practically the same as contained in the Bangladesh Arbitration Act, 2001, which is referable to a point of law or if the award is found to be erroneous on the face of it by mere perusal.
Application for setting-aside the arbitral award under Section 42 of the Arbitration Act 2001 on the grounds as stated under section 43 of the Act should be expedited by a forum which will exclusively deal with the matter arising out of arbitration proceeding. If the award is sustained in the proceeding for setting-aside the arbitral award, then the proceeding for enforcement of award is initiated under section 44 of the Act, where it has been stated that “The award shall be enforced under the Code of Civil procedure in the same manner as if it were a decree of the Court. “Court” means District Judge’s Court and includes Additional District Judge’s Court appointed by the government for discharging the functions of District. Judge’s Court, under the Act 2001 through Gazette notification.
Therefore it seems that, the award is executable in the Court of the District Judge who is engaged in multifarious judicial functions as well as administrative functions, consequently it is impossible for him to give due attention to the execution proceeding and the proceedings is unusually delayed causing much frustration to the decree holder.
In the background of my discussion, I will suggest to the Law Commission of Bangladesh to make an amendment in the Arbitration Act, 2001, to limit the period of arbitration itself to a reasonable period of time so that litigating public can reap the benefit of arbitration, and in the case of international commercial arbitration a company or a foreign party can repose confidence in the process of arbitration in Bangladesh.
Section 89A of the Code of Civil Procedure speaks of mediation, Section 38B of the Code speaks of Arbitration and Section 89C of the Code says of mediation in appeal. This mediation at the appellate stage is a logical sequence, but the efficacy of the procedure is doubtful as the winning party is unlikely to agree to a settlement.
But till today, the efficacy of this amendment in the Code of Civil Procedure is not strictly followed neither by the lawyers nor by the litigating public. We must motivate the lawyers and judges for successful implemental. On of the scheme of mediation, otherwise it will be difficult to motivate the uneducated people of Bangladesh to switch over to this new system. This experiment of mediation needs support of the Bar and the Bench. It is necessary that right approaches be made for incorporating mediation in the legal culture of Bangladesh, bringing benefit to the litigant public of this country and relieving the legal system of a part of its burden.
(Former Chief Justice of Bangladesh)
