ARBITRATION AGREEMENT

Section 2(a)
—“arbitration agreement”

For a valid arbitration agreement, there need not be a formal agreement executed or signed by the parties. The agreement must be in writing and accepted by the parties. No particular form is necessary, and such agreement may be inferred from a set or series of documents.

The definition of arbitration agreement has not excluded any agreement between a national of Bangladesh and a foreign national or corporation from its ambit. There are no definitions of foreign arbitration agreement or foreign award in the 1940 Act.

Haripada Saha v. Md. Shamsuddin Quraishi and others, 22BLD (HCD) 16 

Section—8

Objection as to applicability of Section 8 of the Arbitration Act, 1940, is a technical objection which a party can raise before the learned Subordinate Judge, 3rd Court, Dhaka, This Objection may enable the other party to amend their petition and invoke some other Section of the Arbitration Act.

Coal Controller, Government of Bangladesh Vs. Ventura industries Ltd., 13 BLD (AD) 201

Sections—8 and 10

Where a reference is made to more than one arbitrator and one of the arbitrator’s neglects to act, the other arbitrator or arbitrators shall apply to the court for appointment of an arbitrator to supply the vacancy and an arbitrator appointed by the court shall have power to act. For non-compliance with this legal requirement the award made by one arbitrator cannot be said to be a valid award, to be binding and enforceable it must be signed by all the arbitrators.

Trading Corporation of Bangladesh T.C.B. Bhaban, Karan Bazar, Dhaka Vs MIs Mannesman
Handel A.G. and others, 2OBLD (AD) 52

Ref: United Kingdom Mutual Steamship Assurance Association V. Houston and Lo. (1898) QB467= L. J. 484—relied.

Section—14 (1)
(2)

Sub-section(1) of Section 14 of the Act clearly lays down that after making an award by the Arbitrator he shall sign the award and give notice in writing to the parties informing of the fact of making and signing of the award. Sub-section (2) provides for filing the award by the Arbitrator suo-moto in court for making the award a Rule of the Court and this sub-section also provides for filing an application before the appropriate Court praying for directing the Arbitrator to file the award in Court for making the award a Rule of the Court. The court concerned shall direct the Arbitrator to file the award in court and also shall give notice to the parties as to the filing of the award in the Court. Sub-section (2) of section 14 does not provide for any time limit to give direction to the Arbitrator to file the award in Court.

In the instant case as both the parties were present all throughout the proceedings till making of the award and signing of it by the Arbitrator, there is no necessity of giving notice by the Arbitrator to the parties as to the making of the award or signing of it.

The Chief Engineer (RHD) Sarak Bhaban, Dhaka Vs Managing Director, Foundation Engineer Ltd., 19 BLD (HCD) 142.

Section—14(2)

Where the parties submit to the Arbitration without intervention of the Court and make a prayer for passing the award, such parties can not be allowed to take objection to the validity of the award on the ground of want of jurisdiction of the arbitrator on the plea that the reference was not in Court.

Where the parties to a suit referred the matter in dispute between them to the arbitration without intervention of the Court and an award has been made, either party to the suit may insist on his right to have the suit tried. This contention has little value. Court is not to go beyond the award in order to examine the evidence and to give opinion on the merit of the award. If this contention is accepted it

Would be opening of “flood-gate of litigations” against the spirit of Arbitration Act. The court is competent to set aside an award where there is error of law on the face of it or it is bad on mere perusal.

Where an award creates or purports to create, declare, assign, limit or extinguish any right, title or interest in immovable properties, it is compulsorily registerable under section 17 of the Registration Act.

A proceeding under section 14(2) of the Arbitration Act, 1940, is not a suit. The expression ‘suit’ has neither been defined in C.P.C. nor in the Arbitration Act. But a civil court while trying a suit follows a different procedure from that or while doing so in a proceeding under section-24(2) of the Arbitration Act, 1940.

Adamjee Sons Limited vs. Jiban Bima Corporation 13 BLD (HCD) 200 

Section—27

Power to issue injunction

An Arbitrator has no power to make an order of injunction or stay. Neither the Ordinance not the rules framed thereunder authorise the arbitrator to make an order of injunction or stay at any stage of the proceeding. His only function is to make an award and nothing more.

Mr. Md. Giasuddin vs. Bangladesh, 17 BLD (HCD) 538.

Ref: AIR 1974 Patna 771; A1R1975 Pat. 208; A1R1968 Allahabad22; AIR 1973 Mysore 68; AIR 1968 Madras67;—Cited.

Section—29

It is not within the jurisdiction or power of an arbitrator or umpire, in the absence of an agreement to grant future interest on the awarded amount till realisation thereof. Such power is within the jurisdiction of the Court, which, in its discretion, may or may not grant interest on the amount of the award or part thereof as decreed till realisation thereof.

M/s. Bux Shipping Line v. Bangladesh Water Development Board and another, 22 BLD (AD) 93.

Ref: Bangladesh Agricultural Development Corporation v. Kibria & Associates Ltd. 46 DLR (AD) 97.

Section—29

It provides for grant of interest in arbitration proceedings but it is only the Court which has been empowered thereunder to award interest from the date of its decree after the arbitration award is made a rule of the Court. In Bangladesh, there is no law providing for granting of interest by an arbitrator on his award.

The Bangladesh Agricultural Development Corporation (BADC), represented by its Secretary vs. MIS. Kibria and Associates Ltd., represented by its Managing Director Syed Golam Kibria, 14 BLD (AD) 99.

Section—30

Grounds for setting aside award

Misconduct on the part of the arbitrator is one of the grounds for setting aside the award made by the arbitrator. But this question cannot be aguated in the appeal unless it was raised before the trial Court and the trial Court decided the question one way or the other.

Bangladesh Telegraph and Telephone Board vs. Lithi Enterprises Limited 18 BLD (AD) 1. 

Section—32

Any suit challenging the existence or validity of an arbitration or award is prohibited,

Which prohibition is absolute? Any challenge to the existence, effect or validity of an arbitration agreement or award can only be in accordance with the provisions of the 1940 Act, which is a complete code for all purposes relating to
arbitration.

A suit for declaration that a contract is void or that there was no existence of any such contract, even though it contains an arbitration agreement, is not barred under the provisions of section 32 of the Arbitration Act 1940.

Haripada Saha v. Md. Shamsuddin Quraishi and others, 22BLD (HCD) 16

Section—34

The whole purpose of section 34 of the Act is to ensure that the parties to the agreement would honour the agreement to which they have subscribed from the beginning.

Brexco Bremer Export Contor Brand v. MIs. Popular Biscuit Limited, 21 BLD (HCD) 522

Ref: Food Corporation of India and another Vs. Yadav Engineer and Contractor, Supreme Court cases 1982(2 SCC)—Cited.

Section—34

Stay of legal proceedings, filed in respect of any matter agreed to be referred to arbitration, cannot be granted if there is no proceeding pending for arbitration in accordance with the arbitration agreement.

Haripada Saha v. Md. Shamsuddin Quraishi and others, 22 BLD (HCD) 16. 

Section—39

It is well settled that in an appeal under section 39 of the Arbitration Act the decision of the arbitrator cannot be reviewed and the appellate Court cannot construct an award for the arbitrator. The appellate Court is only to see
whether the award can be challenged on the ground of excess of jurisdiction or income, petence or misconduct on the part of the arbitrator.

Bangladesh vs. National Construction And Consult Ltd. 17BLD (AD) 308.

Section—41

Code of Civil Procedure, 1908(V of 1908)

Section—114 and Order XL VII

Review of Judgment or Order

Section 41 of the Arbitration Act provides that the provisions of the Code of Civil Procedure shall apply to all proceedings before the Court, and to all appeals, under this Act and the Court shall have the same power of making orders connected therewith.

Section 114 of the Code of Civil Procedure provides that any person aggrieved by a decree or order of a Court may apply for a review of the judgment of the court who has passed the decree or order and the court makes such order thereon as it thinks fit.

Order XLVII provides for review of a decree or order of a Court at the instance of an aggrieved party on the discovery of new and important matter or evidence which was not within his knowledge or within his reach even after exercise of due diligence or on account of some mistake or error apparent on the face of the record affecting the impugned decision.

British Airways PLC vs. Bangladesh Air Service Private Ltd. 16 BLD (HCD) 448.

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