Dated: October 08, 2006
Chief Operating Officer
Dhaka Main Office
1/1-B, Sonargaon Road
Dhaka – 1205
Re: Legal Opinion on Outsourcing Agreement between BANK 1 and Organic Resources.
We refer to your letter dated October 04, 2006 on the above subject.
We have perused the draft Outsourcing Agreement to be executed between BANK 1 and Organic Resources (BD) Limited. Our opinion on the same is given below.
In Clause 6.10 it is stated that the service provider will produce weekly “MIS reports”. The term “MIS reports” is not defined in the Agreement; as such we suggest that the definition of this term should be inserted in Clause 1 of the Agreement.
Clause 17 states that disputes which could not be mutually resolved between the parties may be resolved through the competent courts and Clause 18 states that any disputes which cannot be satisfactorily settled with Clause 17 shall be determined by arbitration. Clauses 17 and Clause 18 are conflicting because after a competent court has given its decision on any dispute, that dispute cannot be referred to and resolved by arbitration. Clauses in an Agreement depicting how disputes between the parties shall be resolved could either state that any dispute shall be resolved through a competent court or state that disputes shall be determined by arbitration; the Clauses cannot give both options. This is why, in our opinion, BANK 1 should decide whether they want to resolve disputes through a competent court or through arbitration. Our suggestion is that, as this is a contractual agreement, any disputes arising from this Agreement should be resolved through arbitration. Clauses 17 and 18 should be revised accordingly.
In Clause 21.5 it is stated that the aggrieved party will notify the other party in writing of any event of Force Majeure within 14 days of its occurrence. This time limit is too extensive taken into consideration that under Clause 21.3 BANK 1 has the right after 15 days to go elsewhere for the provisions of the services for the duration of the Force Majeure. That is why, it is our opinion that the 14 days time limit in Clause 21.5 should be reduced to 7 days.
In our opinion the 2nd sentence of Clause 21.6 should be deleted and replaced with the following sentence:
“If no agreement can be reached between the parties within ____________ (_________________) days, either party may give notice of termination of this Agreement to the other party.”
Other than the above observations the Agreement in question appears to be in order.
If you have any further query, please do not hesitate to contact us.
The Lawyers & Jurists
M.L.Hotel Tower Ltd, 208, Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.