Arbitration Act, 1940

Arbitration Act, 1940

[X of 1940]

is Arbitration?

An arbitration is an alternative form of
resolution of disputes between patties and as such the arbitrator must have power to decide
all the differences and disputes between them.

B.A.D.C Vs. M/S Kibria & Associates ltd. 3BLT(AD)-97

is Award

The award made by the arbitrator is appealable
under Section 34(1) of the Acquisition and Requisition of Immovable Property
Ordinance, 1982 (Ordinance II of 1982).

Bangladesh Vs. Md. Mazibur Rahman 2BLT(HCD)-163

The decision of the Arbitration Appellate
Tribunal is a judicial decision— Such decision although by fiction of Law is
made final but the finality is subject to revision by High Court Division under
section 115(I)C.P.C.

Bangladesh Vs. Md. Mazibur Rahman 2BLT(HCD)-163


Whether entire Proceedings would become
nullity being Coram non Justice Admittedly, in none of the cases before us, the
parties reached any agreement, written or otherwise to refer any difference,
dispute or difference over the trade in jute that may arise to arbitration. In
the absence of such arbitration agreement very appointment of arbitrator and/or
tribunal cognizance and conduct of arbitration proceedings and giving awards by
such tribunal all became nullity being corum non judice.

Bangladesh Jute Corporation Vs M/S. A. B. jute Limited 13 BLT (HCD) 92

of the First Schedule

Section 3 of the Arbitration Act provides that
unless a different intention is expressed in the arbitration agreement it shall be deemed to
include the provisions set out in the First Schedule which enacts that the
arbitrators shall make their award within four months after entering on the
reference or after having been called upon to act by notice in writing from any
party to the arbitration agreement or within such extended time as the Court
may allow. Thus where the arbitration agreement did not provide for the time
within which Arbitrators shall make their award but made the award beyond four
months from the date of entering on the reference the question arises as to
whether the award before such period without any extension of time is valid or

M. Ahmed Rashid & Ors Vs. M. Shafi & Ors 15 BLT (AD)88


Once an arbitration proceeding commences, no
Court shall have any jurisdiction to hear or proceed with any matter or suit
not covered by the provisions of the Act.

Bangladesh Jute Mills Corporation Vs. Maico Jute and Bag Corp. &
Ors. 10BLT (HCD)-223

7 and 10

Once the parties to a contract agreed to
settle their disputes that may arise out of execution of the contract, they
must be encouraged and directed to follow the procedure what they agreed to,
and the Court shall not proceed with any civil proceedings commenced by one
party against other party in respect of any matter covered by such arbitration

Civil Engineering Co. Vs Mahkota Technology & Ors 14 BLT (HCD)103


praying for appointment of an Arbitrator by the on the ground that in respect
of supply of certain quantity & coal of specific size and quality by a
contract, dispute arose between the respondent and the petitioner but in spite
of repeated request and a formal notice to appoint an Arbitrator in terms of
the contract, the petitioner failed to do so and so the application to the
court—section 8 of the Arbitration Act, 1940 was not at all attracted as
contended by the learned petitioners counsel.

Held: We find that the Arbitrator has already
entered on the reference and has started issuing notices to the parties. In
that view of the matter we are not inclined to entertain this technical
objection at this stage.

Coal Controller Vs. Venture Industries Ltd. 1BLT (AD)-5O


Appointment of Arbitrators —power of the Court
is discretionary—upon the application, it was duty of the Court to be satisfied
that there arose really an arbitral dispute or difference in between the
parties as to anything or matter under or out of the contract for reference to
the arbitrators—in order to raise an arbitral dispute, there must some sort of formal
demand to be made by one side and denied by other side either explicitly or by
silence. Purpose is very clear. What can be resolved by negotiation that cannot
be allowed to be taken to the Court for the interest of the work itself.

National Sports Council Vs. A. Latif & Company. 9BLT (HCD)-269


Sole Arbitrator—Clause 42 of the Agreement is
“There shall be two Arbitrators, one to be selected by the licenser of and the
other by licencee”.—Appellant appointed his Arbitrator and served notice in
writing on the respondent of its appointment an Arbitrator and requested the
respondent to appoint its Arbitrator. The respondent having failed to appoint
an Arbitrator, the appellant appointed its Arbitrator as the Sole Arbitrator in
the Arbitration Reference. The said appointment is very much inconsonance and
well sanctioned under the provision contained in Section-9(b) of the Act.

Mol Enterprises Inc. Vs. Govt, of Bangladesh 7BLT(HCD)-265


The Contract dated 29.09. 1998 as entered into
by the parties is not disputed. It is also not disputed that the contract
contains an arbitration agreement. The suit was instituted for recovery of
compensation for breach of the contract, and damages incidental to and arising
out of non-payment of such compensation — the arbitration clause is very much
in existence, a part from the rights and obligations of the parties under the
contract — the arbitration clause 18 as quoted above, is very much alive, valid
and effective. Moreover, before filing any written statement, the defendant
made the application for stay, In 1e circumstances, the learned Subordinate
Judge was obliged to take his hands off the proceedings and refer the matter to
arbitration in accordance with the above arbitration clause.

Bangladesh Jute Mills Corporation Vs. Maico Jute and Bag Corp. &
Ors. 10 BLT (HCD)-223


partition award which was made on 16.7.48 was not made a rule of the court and
as such it is not valid and legal as contended by the learned petitioner’s

Held : With regard to the award it may be
stated that the award was made 30 years

back – from the materials on record it is
abundantly clear that the award which was made between the parties 30 years
back was acted upon and in that view of the matter the jointness of the
properties and common business cannot be denied. The parties have voluntarily
acted on the basis of the award 30 years back. Further in view of the fact that
the plaintiffs are in part possession of the suit properties• in their own
right, the submission of the learned Advocate that the award is not legal and
valid cannot be accepted.

M.F. Bari & Ors, Vs. A. Razzaq & Ors. 4BLT (AD)-151


When the appellant took time on number of
occasions to file written statement against the award, he had the clear
knowledge of the filing of the award. In the circumstances, no further notice
was required under section 14(2) of the Arbitration Act to issue.

Dhaka Leather Complex Vs. Sikder Construction & Ors 12 BLT

read with Limitation act, 1908 Article-178

After the petitioner having appeared in Court
and taken time for more than three occasions specifically to file objection
against the award filed, failure of the Court in issuing the statuary notice
under section 14(2) of the Arbitration Act would neither extend the period of
limitation nor entitle the petitioner to file objection beyond said period of
30 days. Such steps on behalf of the petitioner are sufficient not only to fix
the petitioner with the notice of filing of the award in Court but also to dispense
with the requirement of issue of the notice by the Court.

Salauddin Jamil Vs. Amjad Ali Khan & Anr 12 BLT (HCD)205


Under section 14(2) of the Arbitration Act,
the umpire was required to file in Court all depositions and documents, may be,
including the awards of the arbitrators. Such failure on the part of the umpire
is no doubt an irregularity but such irregularity per se would neither
invalidate the award nor extend the period of limitation entitling the
petitioner to file his objection against the award beyond thirty days.

Salauddin Jamil Vs. Amjad Ali Khan & Ann. 12BLT(HCD)205

& 17 read with Limitation Act, 1908 Article- 158

Mandatory provisions—after award was given,
that must be filed in Court under Section 14 and the court is obliged thereupon
to serve notice upon the parties of the filing of the award. Then, under
Section 17, if the court finds no reason to remit the award or any matter in
difference back to the arbitrator for reconsideration or does not set aside the
award, the court shall pronounce judgment but only after expiration of the time
for making an application to set aside the award or refusing the application if
any made. Article 158 of the Limitation Act has provided a period of 30 days
from the service of notice of filing of the award for making an application to
set aside an award. A decree thereupon shall follow such judgment. But no
appeal shall lie against such decree except on the ground that the decree is in
excess of or not exactly in accordance with the award.

Titas Gas Transmission & Distribution Co. Ltd. Vs. M/S Shams
Company & Ors.9BLT(HCD)-379


Under section 17, the Court is empowered to
remit or refer any of the matters to arbitration for reconsideration or set
aside the award. After the time for making an application for setting aside an
award or refusing such application, if any made, the court shall pronounce
judgment according to the award. Upon. such Judgment, a decree shall follow. No
appeal shall lie against such a decree except in a case where the decree was
passed in excess of the award or not in accordance with the award. So, the
scope of the appeal is limited to either of being excessive of or not agreeing
with the award.

Dhaka Leather Complex Vs. Sikder Construction & Ors 12 BLT

– 29

If the Arbitrators has no power to award
interest, the party will have to go to the court to realise interest on the
award; interest pendent lite is not a matter of substantive law like interest
for the period anterior to the reference.

Sonali Bank Vs. M/s. Karnaphuli Works Ltd. 2BLT (AD)-78


retired Judge of the Supreme Court was appointed Arbitrator. He entered upon
the Arbitration proceeding from 3016 June, 1990 and gave his award on 20th
September, 1990. He allowed interest at the rate of 16% from July, 1984 from
the pre-reference period till realisation of their money – was he competent to
allow interest in such a manner?

Held: Since the agreement between the parties
did not provide for payment of interest for the pre-reference period the
Arbitrator got no authority to allow it. As to interest pendent lite, i.e. the
date on which the Arbitrator entered upon the proceeding t the date on which he
gave award, he is competent

to allow it. As to interest from the date of
the award till realisation of the money thereunder, though it is permissible,
and within the power of the Arbitrator, but in the circumstances of the case
this interest should not be allowed. Any interest from the date of the decree
till realisation may be allowed only by the court and this is purely court’s

B.A.D.C. Vs. M/S Kibria & Associates Ltd. 3BLT(AD)-97

Latifur Rahman J. (agreeing): The Arbitrator had no jurisdiction to grant
interest beyond the date the decree as the power to grant interest after
passing of the decree Vests exclusively in the court under section 29 of the

B.A.D.C. Vs. M/S Kibria & Associates Ltd 3BLT (AD)-97


The jurisdiction or power of Arbitrator/
Umpire, in the absence of any agreement, to grant future interest in the
awarded amount till realization thereof is not within the power or jurisdiction
of the Arbitrator/ Umpire but such power of granting interest on the awarded
amount or part thereof till realization could be awarded as per provision of
section 29 of the Arbitration Act which is within the jurisdiction of the Court
or in other words, when the Award is brought to the Court then the Court in its
discretion may or may not grant interest on the award amount or part thereof as
decreed till realization.

Md. Asalat Zaman & Ors Vs. Govt of Bangladesh 11BLT (AD)-215

30 & 33

The Award in respect of the sensation has been
sought to be set aside under section 33 read with section 30 of the Arbitration
Act on the ground that it was based on ‘no evidence’ as no witness was examined
nor any deposition was recorded. The Arbitrator observed in his award that the
lawyer of the appellant who appeared at the time of hearing of the reference
admitted the claim of the 1st party contractor and did not press for taking any

Held: Court does not sit as a court of Appeal
over the Arbitrator’s award and since court has got a limited scope of
interference over an award, the Arbitrator’s finding cannot be questioned
before the court on the ground of no evidence.

B.A.D.C Vs. M/S Kibria & Associates Ltd. 3BLT(AD)-97


Whether the Arbitrator Misconducted himself

Under the Agreement the breeding farm was to
export 5000 monkeys during the first year, the Agreement being for a period of
10 years. The Arbitrator was of the positive view that selling of 6 monkeys out
of 5000 monkeys, if a breach of clause 33 of the Agreement, would not be a
material breach leading to termination of the agreement. This decision rendered
by the Arbitrator cannot be characterised as a “Misconduct” and it cannot be
said that the Arbitrator Misconducted himself in making the Award. On the part
of the Arbitrator there is no corruption nor conduct amounting to moral
turpitude, no breach and neglect of duty and responsibility causing Miscarriage
of justice, no failure to perform the essential duties, no Mishandling of the
Arbitration proceeding amounting to some substantial displacement of the
ordinary rules of justice and no indication of gross negligence or recklessness
on the face of the Award.

Mol  Enterprises Inc. Vs. Govt.
of Bangladesh 7BLT (HCD)-265


Misconduct—“Misconduct”, thus, means conduct
amounting to moral turpitude, breach and neglect of duty, failure to perform
essential duties, Mishandling of Arbitration proceeding causing displacement of
Rules of justice and lack of integrity and impartiality. Held; in the instant
case Court found personal “Misconduct” of Arbitrator but case of personal
“Misconduct” had not been set up by respondent and only “Misconduct” had been
broached. Court, thus, traveled beyond its jurisdiction in finding personal
“Misconduct” with Arbitrator.

A. Latif and Company Limited Vs. The Project Director & Ors 12 BLT
(HCD) 311


Jurisdiction—In clause 42 of the Agreement
which is Arbitration clause, there is no such agreement nor any clause that the
Arbitration proceeding or reference would be held in Dhaka. Nothing has been
stated about the venue of the Arbitration proceeding. In the absence of any
agreement/clause prohibiting Arbitration in any other place or land other than
Bangladesh or to put it differently any statement manifesting the venue of the
Arbitration in Bangladesh, it is difficult to appreciate the contention advanced
from the respondent that the Arbitration proceeding having taken place in the
United States of America, the whole Arbitration proceeding and the Award given
by the Arbitrator is without jurisdiction. The learned Subordinate Judge
committed a patent illegality in recording the finding that the Arbitration
proceeding was required to be held in Dhaka and the appellant initiated the
proceeding in the United States of America with mala fide intention.

Mol Enterprises Inc. Vs. Govt of Bangladesh 7BLT (HCD)-265


the suit instituted in presence of the arbitration agreement is maintainable.

Held: We find no such provisions in the Act
barring a suit on the ground of existence of an arbitration agreement.

BWDB Vs. Contractor, Maim Barrage 9BLT (HCD)-21


Limitation—The application challenging the
validity of the Award having been filed after a period of 30 days as enshrined
in Article- 158 of the Limitation Act, the same could not be entertained and
Section-5 of the Limitation Act was not at all applicable for condonation of

Mol  Enterprises Inc. Vs. Govt.
of Bangladesh 7BLT (HCD)-265

– 33 Read with Limitation Act (IX of 1908) Article- 158

Decretal amount — As no objection by the
petitioner was filed under section 33 of the Arbitration Act within the time
prescribed under Article 158 as the Limitation Act, it was barred by limitation
— Petition dismissed.

Bangladesh Television Vs. Techno Consult Limited 2BLT (AD)-21


Deposit of Award money or furnishment of security
envisaged in section 33 of The Act is a condition precedent for entertainment
of an application challenging the validity of Award and without deposit of
Award money or furnishment of security application in the form of written
objection will be no application nor any objection in the eye of law.

Chittagong Steel Mills Ltd & Anr. Vs M/S MEC & Ors. 13 BLT


Even if there is any provision for arbitration
in the contract/lease agreement, application for staying proceedings pending in
the court is not maintainable, under section 34 of the Arbitration Act 1940,
unless such application is filed in the court before taking any step in the

M.A. Gaffer Ltd. Vs. Eunjari Garments (Pvt.) Ltd. 8BLT (HCD)-295


Jurisdiction of the Civil Court —The Appellant
filed Money Suit against the respondent No.1-6 —the respondent took steps on
several occasions to adjourn the case in the name of filing Written statement

—Held; when the arbitration proceedings
commences the parties should be ready and willing to do all things necessary to
the proper conduct of the arbitration. But as it appears before ICC Paris the
respondent Nos. 1 and 2, expressing their unwilling to continue with the
Arbitration proceeding. backed out from the arbitration proceedings stating
that ‘they will not bear any further expenses in the arbitration proceeding. In
view of above, the arbitration proceeding could not commence at Dhaka —While
staying the proceedings of the trial court, did not at all take into
consideration the two basic lawful aspects of the case i.e. the respondent.
Nos.3-6 took steps on several occasions to adjourn the case in the name of filing
written statement and that the respondent Nos. 1 and 2 backed out from the
arbitration proceedings which was pending before the ICC Paris. So the judgment
and order dated 15.5.2000 passed by the High Court Division in staying the suit
cannot be sustained.

Popular Biscuit Ltd. Vs. Beximco Bremer Export Contor Brand, Repprecht
Gmbh & Ors 15 BLT (AD)282

read with Code of Civil Procedure, 1908 [2 of 1908]


a plaint can he rejected in presence of an arbitration clause And an
arbitration award given by the arbitrators as per arbitration case.

If a person, who is a party to an arbitration
agreement brings a suit ignoring that agreement, the defendants remedy, if he,
wants to rely on that agreement, is to proceed under Section-34 of the
Arbitration Act and .to seek for stay of the suit. If he does not avail that
remedy, the court has jurisdiction to proceed with the suit and give its
decision on merits. A party to an Arbitration agreement is not precluded from
instituting a Civil Suit either before or during reference.

Aminur Rahman Khan Vs. Trade Aris Insurance 9 BLT (HCD)-206.

read with 2(b) and Chittagong Hill Tracts Regulation, 1900

The Deputy Commissioner at Rangamati is given
some power under the Chittagong Hill Tracts Regulation (Regulation no. I of
1900), 1900 to exercise certain powers in civil disputes as a District Judge. But
the Deputy Commissioner at Rangamati could not be shown to have been appointed
by the Government for the purpose of the Arbitration Act. Consequently, Such
Deputy Commissioner has no jurisdiction to entertain an application for
enforcement of an award under section 44 of the Act.

Executive Engineer (R&H) Vs. Mir Jasimuddin & Ors 12 BLT (HCD) 472.

of the Second Schedule Read with Section-41

In the matter of a company, it is advisable
that the court should not interfere by granting injunction where in the
internal management and functioning of the company may be affected.

Mr. Mainul Hosein Vs. Mr. Anwar Hossain 4BLT (AD)-76.