Law Opinion
Arbitration – the possibility and the challenges
The concept of Arbitration is nothing new in our legal system. The Arbitration Act 1940, drafted in the colonial period provided an option for resolving disputes by alternative means without bringing it before a court of law. Nonetheless, arbitration was always seen by lawyers and judges as an unimportant feature of the legal system. Traditionally, the primary focus of dispute resolution mechanism in common law countries is 'court centered'. That is to say courts hold the image of absolute neutrality and impartiality; the clients and the lawyers alike prefer courts as the forum of dispute resolution. While the advantage of courts as the ultimate forum of choice for dispute resolution cannot be denied, one must also bear in mind the severe back log of cases, the cost and complexity of legal procedures associated with litigation. The recent trend in many common law countries is for the courts and the legal system to provide impetus to divert cases to alternative dispute resolution mechanism thus circumventing the need to resort to court resources which in effect is expected to make dispute resolution cost effective and efficient. In the UK, the civil procedure code was completely revamped in 1998 taking into consideration Lord Woolf's recommendation that the courts the legal system ought to divert cases to a different stream of alternative dispute resolution in order to solve the entrenched problem of cost, complexity and delay. Courts in that case are fee to deal with the more grave matters following the thorough scrutiny of the 'Adversarial system'.
In this respect Bangladesh is also following the footstep of the international community. In 2001 it enacted a new Arbitration Act laying down a modern framework in order to give fresh impetus to Arbitration practice in Bangladesh. Initially it was taken positively by the legal community. Most important contracts these days contain an arbitration clause in it and inevitably a significant portion of these agreements result in disputes being referred to an Arbitration tribunal. Arbitration has become a niche area of practice for a handful of lawyers although the ambit of arbitration practice is increasing rapidly.
While arbitration is becoming increasingly popular, unfortunately, the experience over the last decade has not always been a pleasant one. The Arbitration Process is generally expensive taking into account the fees of the Arbitrators (usually comprising of retired Supreme Court Judges and senior lawyers) , the legal fee of the counsels and the cost of the conducting the process. With regard to saving time, again arbitration has been somewhat of a failure. More often than not, parties are locked up in matters of interim measures with interim applications filed before the courts. Appointment of Arbitrators is a common problem when parties make application to courts to appoint arbitrator in situations where the other party is not co-operating. Unfortunately, a simple application like this usually takes a long time to be disposed of in the local courts. The arbitration process itself is quite lengthy dragging on for years until an award is passed and even then there is the uncertainty with enforcing the award, as losing parties as a matter of practice routinely make applications to set aside the award.
In my view, the fundamental spirit of Arbitration as a quick and efficient mechanism of dispute resolution is missing so far as Arbitration practice in Bangladesh is concerned. Lawyers, Arbitrators and clients alike, perceive arbitration as a form of 'privatised litigation' rather than a flexible mechanism of alternate dispute resolution. If arbitration is to flourish in Bangladesh, one needs to address the 'litigation culture' which is predominantly 'court centered' and bureaucratic in nature. Advocacy on alternative dispute resolution is of course one important element. In consonance with that, the Arbitration Act should be reformed to cut down the scope for 'delay tactics' and further to give finality to an arbitration award by limiting the scope of appeals/setting aside awards. The courts should also understand its role as a guardian to support the Arbitration process. The present role of the court causes more hindrance and impediment to effective arbitration. Judges dealing with Arbitration needs to understand that the essence of Arbitration is defeated if the courts regularly intervene and question the jurisdiction of the tribunal. Similarly, the back log of pending applications in relation to arbitration matters should be disposed of as quickly as possible. Perhaps having a separate tribunal or court for dealing with arbitration applications may be an effective solution.
The idea of introducing alternative dispute resolution (ADR) in the legal system is generally accepted as a positive change although there are some who think otherwise. Nonetheless, it is widely accepted that merely having an 'arbitration code' will not solve the problem or make the system 'ADR' friendly. What is needed is a holistic approach to the application of ADR and a comprehensive whole sale reform in our civil procedure to accommodate and facilitate ADR.
The writer is a barrister –at-law.
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