Sherpa Hossainy's Blog

Investment arbitration will increase FDI, say experts

Posted in Bangladesh, Dhaka, Investment, Legal by Sherpa Hossainy on February 4, 2012

Published in The Independent on 27 January 2012

Read the article on Independent website

Digital print version

Foreign direct investments into Bangladesh can be boosted by formulating an internationally recognised arbitration law, legal experts said at a dialogue on Thursday.

Arbitration is an alternative dispute resolution (ADR) tool which allows two parties settle legal issues outside court, avoiding lengthy judicial proceedings and huge costs.

The experts were speaking at a dialogue on investment arbitration, organised by Bangladesh International Arbitration Centre (BIAC) at Hotel Ruposhi Bangla. Shafique Ahmed, minister for law, justice and parliamentary affairs, Dr Kamal Hossain, eminent lawyer, and Gavan Griffith, Queen’s counsel at the Australian Bar, were  present.

Griffith, a chartered and international commercial arbitrator, in his keynote speech, said  different states have different laws but local judgement is not acceptable internationally.
“Commercial entities want to know if there will be finality in case of a dispute resolution. In absence of an internationally recognised dispute settlement tool foreign companies get reluctant to invest as they feel unprotected,” he said.

Griffith said some commercial entities prefer some states over others for businesses because there is enough protection and justice for them. Some states are making arbitration laws allowing foreign investors, if treated unfairly, to claim damage against the state, he added.

“Bangladesh has a standard arbitration law, which is similar to that of the UK, but without an international treaty this will not be recognised globally. You have to create a level playing field,” Griffith said. He said investment arbitration is a tool to make the world a better place for trade and Bangladesh should adopt the internationally recognised New York International Treaty for Arbitration, to protect foreign investments.

The Law Minister Shafique Ahmed said Government is willing to cut down the lengthy court procedures and amending the age-old civil procedural law formed in 1908. “Alternative dispute resolution (ADR) is the only way to deal with the backlog of cases,” he said.

The minister said proper arbitration and investment protection law will encourage foreign investors and the ministry is going to amend Bangladesh Arbitration Act 2001 upon recommendation from the law commission soon.

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