Aminur Rashid Khan Vs. Bangladesh Agricultural Development, (Md. Nuruzzaman , J.)

Case No: Civil Revision No. 3887 of 2016

Judge: Md. Nuruzzaman, J And S.H. Md. Nurul Huda Jaigirdar, J.

Court: High Court Division,

Advocate: Md. Mustafizur Rahman Khan, Advocate ,

Citation: 2019(2) LNJ

Case Year: 2018

Appellant: Aminur Rashid Khan

Respondent: Bangladesh Agricultural Development Corporation

Subject: Arbitration Act

Delivery Date: 2019-12-04

HIGH COURT DIVISION

(CIVIL REVISIONAL JURISDICTION)

Md. Nuruzzaman, J

And

S.H. Md. Nurul Huda Jaigirdar, J.

 

 

Judgment on

31.05.2018

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Aminur Rashid Khan

. . . Petitioner

-Versus-

Bangladesh Agricultural Development Corporation

. . . Opposite party

Arbitration Act (I of 2001)

Section 12(4)

We are of the view that the 1st direction to appoint a sole Arbitrator by the Chairman BADC as directed by the learned District Judge seems to us not well founded in accordance with law therefore, replacement of another Arbitrator by the learned District Judge in spite of earlier Arbitrator also cannot be sustained in accordance with law. Accordingly Mr. Justice Md. Abdul Wahab Miah, the Hon’ble Judge of the Appellate Division of the Supreme Court of Bangladesh was appointed as a sole Arbitrator to resolve the dispute.           . . . (18, 24 and 30)

Md. Mustafizur Rahman Khan, Advocate

. . . For the Petitioner

Mr. Md. Mojibur Rahman, Advocate

. . . For the Opposite party

JUDGMENT

Md. Nuruzzaman, J: On an application under Section 115(1) of the Code of Civil Procedure the instant Rule was issued calling upon the opposite party to show cause as to why the order No. 50 dated 24.08.16 passed by District Judge, Dhaka in Arbitration Misc. Case No. 343 of 2009 should not be set aside and/or such other or further order or orders passed as to this Court may seem fit and proper.

2.            The material facts, relevant for, disposal of the instant Rule, in short, as has been derived from the revision application, are that, in pursuant to tender No. Pur/Fert/ TSP/64/2008-09 dated 06.05.2008 floated by the opposite party for purchasing of 25,000 metric tons (MT) (±5%) of Triple Super Phosphate (TSP) fertilizer in bag, the petitioner submitted its bid dated 17.06.2008 offering to supply the same of Moroccan origin at a price of US$ 1,295.00 per MT CFR Chittagong on linear term basis, which was accepted by the opposite party’s vide letter dated 13.07.2008, following which the petitioner submitted bank guarantee No. 203GPBN081980001 dated 16.07.2008 for US$ 3,237,500.00 (United States Dollars Three Million, Two Hundred Thirty Seven Thousand Five Hundred) which constituted 10% of the total CFR value of the fertilizer, issued by Dhaka Bank Ltd., Foreign Exchange Branch, as performance guarantee to the opposite party under cover of its letter dated 16.07.2008.

3.            The petitioner commenced Arbitration due to dispute against the opposite party under Clause 40 of the contract made between them by sending an arbitration notice dated 16.02.2009. However, the opposite party’s Chairman failed to appoint any Arbitrator. 

4.            The petitioner filed an application under section 12(4) of the Arbitration Act, 2001 before the learned District Judge, Dhaka for appointment of an Arbitrator which was registered as Arbitration Miscellaneous Case No.343 of 2009.

5.            The petitioner being aggrieved by an order dated 24.08.2016 preferred the instant revision application before this Division of the Supreme Court of Bangladesh and obtained the instant Rule with an order of stay.

6.            Mr. Mustafizur Rahman Khan, the learned Advocate appearing for the petitioner has submitted that the Court below committed an error of law resulting in an error in the impugned order occasioning failure of justice in allowing the opposite party’s application dated 24.08.2016 for appointment of its own employee, Mr. Md. Abdul Zalil, Member Director (Minor Irrigation), BADC, as the sole Arbitrator to arbitrate disputes between the petitioner and the opposite party without having due regard and in not considering the independence and impartiality of the said Arbitrator which is required under section 12(9) of the Arbitration Act, 2001.

7.            He has further submitted that the Court below committed an error of law resulting in an error in the order occasioning a failure of justice inasmuch as in passing the impugned order ex-parte without hearing the petitioner, hence, the petitioner had no opportunity to raise its objection against the appointment of the opposite party’s employee as the sole Arbitrator and, as such, the impugned order is liable to be set aside.

8.            He has argued that the learned District Judge committed an error of law resulting in an error in the impugned order occasioning failure of justice without appreciating that the sole Arbitrator appointed by the Opposite Party for arbitrating the disputes of itself own Corporation wherein he is an Officer under that Corporation and the petitioner, which gives rise to justifiable doubts with respect to his independence and impartiality.

9.            He in a same breath has argued that the learned District Judge committed an error of law resulting in an error in the order occasioning failure of justice as the Court below has completely failed to apply its judicial mind in passing the impugned order allowing the appointment of the opposite party’s officer as Arbitrator for arbitrating disputes between its Corporation and the petitioner in clear violation of the provision of sub-section 9 of the section 12 of the Arbitration Act, 2001 and, as such, the impugned judgment and order is liable to the set aside.  

10.        The opposite party contested the Rule by filing counter affidavit stating, inter-alia, that the opposite party in compliance of the Court’s Order dated 17.01.2016 appointed Mr. Md. Mofajjal Hossain, NDC, Member Director (Fertilizer Management), BADC, Dhaka as the sole Arbitrator on 07.06.2016. Thereafter, the said Arbitrator Mr. Md. Mofajjal Hossain informed the Chairman of BADC and he has been transferred to Jibon Bima Corporation and, as such, he would not be able to perform the functions of the Arbitrator. The Chairman of BADC was intimated the said information vide letter dated 02.08.2016. Hence, the Chairman of BADC appointed Mr. Md. Abdul Jalil, Member Director (Minor Irrigation) of BADC, Dhaka in place of Mr. Md. Mofajjal Hossain, NDC as a sole Arbitrator on 16.08.2016 and communicated the same to the petitioner as well as the Hon’ble District Judge, Dhaka by letter dated 14.08.2016.

11.        It has been contended in the counter affidavit that the petitioner, never-ever raised any question against the first appointment of sole Arbitrator, therefore, instead of first Arbitrator, appointment of 2nd Arbitrator in place of Mr. Md. Mofajjal Hossain was bonafide and lawful. Therefore, the objection raised by the petitioner regarding the appointment of 2nd Arbitrator Mr. Md. Abdul Jalil, Member Director (Minor Irrigation) of BADC, Dhaka neither illegal nor suffers from any legal infirmity.

12.        Mr. Md. Mojibur Rahman, the learned Advocate for the opposite party has submitted that the appointment of the 1st Arbitrator Mr. Md. Mofajjal Hossain has not been challenged by the petitioner. Therefore, instead of 1st Arbitrator Mr. Md. Mofajjal Hossain appointment of Mr. Md. Abdul Jalil as 2nd Arbitrator cannot be questioned by the petitioner. The Chairman of BADC has appointed the Arbitrator by dint of Arbitration Clause 40.1 of the Contract made between the parties therefore, in passing the impugned order the learned District Judge, Dhaka committed no error or law and, as such, no interference calls for by this Court.

13.        We have considered the submissions advanced by the learned Advocates of the respective parties. We have perused the impugned order dated 17.01.2016 passed by the learned District Judge, Dhaka. We have also perused the application under section 12(4) of the Arbitration Act, 2001 for appointment of Arbitrator and the agreement dated 22.07.2008 made between the parties.

14.        On a careful reading of clause 40.1 of the agreement it appears that there is a provision for appointment of Arbitrator by the Chairman of BADC, if any, dispute arises in between the parties in term of the agreement. It appears from the application for appointment of Arbitrator the petitioner on 16.02.2009 sent a notice to the Opposite Party under clause 40 of the Contract for appointment of Arbitrator. However, the Chairman of BADC failed to appoint any Arbitrator. Therefore, the present petitioner for appointment of Arbitrator invokes the provision of section 12(4) of the Arbitration Act, 2001.

15.        The opposite party BADC contested the Miscellaneous Case by filing written objection. On 17.01.2016 the learned District Judge directed the Chairman of BADC to nominate a competent sole Arbitrator within 60 days from the date of receipt of the order.

16.        We have perused the materials on record as annexed with revisional application which is annexure “C” from which it is divulged that the Chairman of BADC never intimating the Court that he had nominated any person as a sole Arbitrator nor communicate the same to the learned District Judge. However, instead of appointment the Arbitrator on 24.08.2016 the opposite party BADC filed an application to appoint Mr. Md. Abdul Jalil, Member Director of BADC to appoint him as Arbitrator in place of earlier Arbitrator Mr. Md. Mofajjal Hossain. Hence, the learned District Judge by the impugned judgment and order allowed the application appointing Mr. Md. Abdul Jalil as Arbitrator.

17.        To appreciate the impugned order we are of the view that the provision of section 12 may be reproduced hereinbelow for the convenience and ready reference of the discussion which would be beneficial to form a legal opinion –

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(2) frNZ ¢iæi¡­h pÇja e¡ qC­m, ®k ®L¡e S¡a£ua¡l hÉ¢š²­L p¡¢mpL¡l£ ¢e­u¡N Ll¡ k¡C­hz

(3) Ef-d¡l¡ (1) H E­õ¢Ma pÇja fÜ¢a AhaÑj¡­e -

(L)   HLj¡œ p¡¢mpL¡l£l pjeÄ­u N¢Wa p¡¢mp£ VÊ¡Ch¤Ée¡­ml ®r­œ, ®L¡e fr qC­a Ae¤­l¡d fС¢çl ¢œn ¢c­el j­dÉ frNZ p¡¢mpL¡l£ ¢e­u¡­N pÇja qC­a hÉbÑ qC­m, ®k ®L¡e f­rl B­hc­el ®fТr­a -

(A)     B¿¹SÑ¡¢aL h¡¢Z¢SÉL p¡¢mp hÉa£a AeÉ¡eÉ p¡¢m­pl ®r­œ, ®Sm¡ SS Eš² p¡¢mpL¡l£ ¢e­u¡N L¢l­he, Hhw

(A¡)  B¿¹SÑ¡¢aL h¡¢Z¢SÉL p¡¢m­pl ®r­œ fÐd¡e ¢hQ¡lf¢a ¢Lwh¡ fÐd¡e ¢hQ¡lf¢a LaѪL j­e¡e£a p¤fУj ®L¡­VÑl ®L¡e ¢hQ¡lL Eš² p¡¢mpL¡l£ ¢e­u¡N L¢l­hez

(M)    ¢aeSe p¡¢mpL¡l£ pjeÄ­u N¢Wa p¡¢m­pl ®r­œ, frNZ ¢iæi¡­h pÇja e¡ qC­m, fЭaÉL fr HLSe L¢lu¡ p¡¢mpL¡l£ ¢e­u¡N L¢l­h Hhw Eš²l¦­f ¢ek¤š² p¡¢mpL¡l£NZ a«a£u HLSe p¡¢mpL¡l£ ¢e­u¡N L¢l­he, ¢k¢e p¡¢mp£ VÊ¡Ch¤Ée¡­ml ®Qu¡ljÉ¡e qC­hez

(4) Ef-d¡l¡ (3) Hl Ad£e ¢e­u¡N fÜ¢a Ae¤pl­Zl ®r­œ –

(L) Afl fr qC­a Ae¤­l¡d fС¢çl ¢œn ¢c­el j­dÉ p¡¢mpL¡l£ ¢e­u¡N L¢l­a k¢c ®L¡e fr hÉbÑ qe, Abh¡

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(N) B¿¹SÑ¡¢aL h¡¢Z¢SÉL p¡¢mp hÉa£a AeÉ¡eÉ p¡¢m­pl ®r­œ ®Sm¡ SS ¢e­u¡N L¢l­he, Hhw

(O)  B¿¹S¡Ñ¢aL h¡¢Z¢SÉL p¡¢m­pl ®r­œ fÐd¡e ¢hQ¡lf¢a, ¢Lwh¡ fÐd¡e ¢hQ¡lf¢a La«ÑL j­e¡e£a p¤fУj ®L¡­VÑl ®L¡e ¢hQ¡lL ¢e­u¡N L¢l­hez

(5) Ef-d¡l¡ (4) Hl cg¡ (M) Hl Ad£e ¢ek¤š² aªa£u p¡¢mpL¡l£ Eš² VÊ¡Ch¤Ée¡­ml ®Qu¡ljÉ¡e qC­hez

(6) Ef-d¡l¡ (4) Hl Ad£e HL¡¢dL p¡¢mpL¡l£ ¢ek¤š² qC­m, ®Sm¡SS h¡, ®rœja fÐd¡e ¢hQ¡lf¢a ¢Lwh¡ fÐd¡e ¢hQ¡lf¢a LaÑѪL j­e¡e£a p¤fУj ®L¡­VÑl ®L¡e ¢hQ¡lL Eš² p¡¢mpL¡l£­cl jdÉ qC­a HLSe­L p¡¢mp£ VÊ¡Ch¤Ée¡­ml ®Qu¡ljÉ¡e ¢e­u¡N L¢l­hez

(7) frNZ LaѪL pÇja ¢e­u¡N fÜ¢al Ad£e k¢c -

(L) ®L¡e fr Ae¤l¦f fÜ¢a Ae¤plZ L¢l­a hÉbÑ qu, h¡

(M) frNZ, h¡ p¡¢mpL¡l£NZ, Ae¤l¦f fÜ¢al ®L¡e ¢ho­u pÇja qC­a hÉbÑ qu, h¡

(N) ®L¡e hÉ¢š² h¡ aªa£u ®L¡e fr Ae¤l¦f fÜ¢al Ad£e Eš² hÉ¢š² h¡ a«a£u f­rl Efl B­l¡¢fa ®L¡e c¡¢uaÅ pÇf¡c­e hÉbÑ qu, a¡q¡ C­m ®k ®L¡e fr, p¡¢mp Q¤¢š²­a ¢e­u¡Nc¡e pÇfÑ­L ¢iæl¦f ®L¡e f¿Û¡ ¢edÑ¡¢la e¡ b¡¢L­m, p¡¢mpL¡l£ ¢Lwh¡ p¡¢mpL¡l£­cl ¢e­u¡N fÐc¡­el ¢e¢j­š fЭu¡Se£u hÉhÙÛ¡ NËq­Zl SeÉ,

(N) B¿¹SÑ¡¢aL h¡¢Z¢SÉL p¡¢mp hÉa£a AeÉ¡eÉ p¡¢m­pl ®r­œ, ®Sm¡SS ¢eLV B­hce L¢l­a f¡¢l­h Hhw ®Sm¡ SS p¡¢mp£ VÊ¡Ch¤Ée¡­ml ®Qu¡ljÉ¡epq AeÉ¡eÉ p¡¢mpL¡l£­cl ¢e­u¡N L¢l­he, Hhw

(O) B¿¹SÑ¡¢aL h¡¢Z¢SÉL p¡¢m­pl ®r­œ fÐd¡e ¢hQ¡lf¢a ¢Lwh¡ fÐd¡e ¢hQ¡lf¢a LaѪL j­e¡e£a p¤fУj ®L¡­VÑl ®L¡e ¢hQ¡l­Ll ¢eLV B­hce L¢l­a f¡¢l­h Hhw fÐd¡e ¢hQ¡lf¢a ¢Lwh¡ fÐd¡e ¢hQ¡flf¢a La«ÑL j­e¡e£a p¤fУj ®L¡­VÑl ¢hQ¡lL p¡¢mp£ VÊ¡Ch¤Ée¡­ml ®Qu¡ljÉ¡epq AeÉ¡eÉ p¡¢mpL¡l£­cl ¢e­u¡N L¢l­hez

   (8) Ef-d¡l¡ (3), (4) Hhw (7) Hl Ad£e p¡¢mpL¡l£ h¡ p¡¢mpL¡l£N­Zl ¢e­u¡N Eš²l¦f B­hce fС¢çl o¡V ¢c­el j­dÉ fÐc¡e L¢l­a qC­hz

   (9) fÐd¡e ¢hQ¡lf¢a ¢Lwh¡ ¢hQ¡lf¢a LaѪL j­e¡e£a p¤fУj ®L¡­VÑl ¢hQ¡lL ¢Lwh¡, ®rœja, ®Sm¡SS­L HC d¡l¡l Ad£e p¡¢mpL¡l£ ¢e­u¡­Nl ®r­œ frNZ LaѪL pÇf¡¢ca Q¤¢š²l  Ad£e p¡¢mpL¡l£l ®k¡NÉa¡ Hhw ¢el­fra¡l naÑpj§q Hhw ü¡d£e J ¢el­fr p¡¢mpL¡l£ ¢e­u¡N ¢e¢ÕQaLl­Zl m­rÉ AeÉ¡eÉ ®k¡NÉa¡ ¢h­hQe¡ L¢l­a qC­hz 

   (10) B¿¹SÑ¡¢aL h¡¢Z¢SÉL p¡¢m­p HLj¡œ p¡¢mpL¡l£ ¢Lwh¡ a«a£u p¡¢mpL¡l£ ¢e­u¡­Nl ®r­œ fÐd¡e ¢hQ¡lf¢a h¡, ®rœja, fÐd¡e ¢hQ¡lf¢a La«ÑL j­e¡e£a p¤fУj ®L¡­VÑl ¢hQ¡lL, frNZ HL¡¢dL S¡a£ua¡ qC­m Eš² S¡a£ua¡ qC­a ¢iæ S¡a£ua¡l p¡¢mL¡l£ ¢e­u¡N L¢l­a f¡¢l­hez

   (11) fÐd¡e ¢hQ¡lf¢a ¢Lwh¡, ®rœja, ®Sm¡SS HC d¡l¡l Ad£e ¢hou¡¢c ¢eØf¢šl SeÉ ®kCl¦f fÜ¢a h¡ f¢lLÒfe¡ kb¡bÑ h¢mu¡ NZÉ L¢l­he ®pCl¦f fÜ¢a ¢Lwh¡ f¢lLÒfe¡ fÐZue L¢l­a f¡¢l­hez

   (12) Ef-d¡l¡ (3,) (4)  Hhw (7) Hl Ad£e fÐd¡e ¢hQ¡lf¢a ¢Lwh¡ fÐd¡e ¢hQ¡lf¢a La«ÑL j­e¡e£a p¤fУj ®L¡­VÑl ¢hQ¡lL ¢Lwh¡, ®rœja, ®Sm¡SS LaѪL fÐcš ¢pÜ¡¿¹ Q§s¡¿¹ qC­hz

   (13) HC d¡l¡l EŸnÉ f§lZL­Òf fÐd¡e ¢hQ¡lf¢a, ®L¡e ¢e¢cÑø j¡jm¡ h¡ j¡jm¡pj§­ql SeÉ ¢Lwh¡ p¡¢hÑL c¡¢uaÅ f¡m­el SeÉ ®L¡e ¢hQ¡lL­L c¡¢u­aÅ ¢e­u¡N L¢l­a Hhw Eš² ¢hQ¡l­Ll c¡¢uaÅL¡m ¢edÑ¡lZ L¢l­a f¡¢l­hez

hÉ¡MÉ¡ - HC d¡l¡u "" ®Sm¡SS '' A­bÑ ®k ®Sm¡ S­Sl ÙÛ¡e£u A¢d­r­œl j­dÉ pw¢nÔø p¡¢mp Q¤¢š² pÇf¡¢ca qCu¡­R ®pC ®Sm¡SS­L h¤T¡C­hz

18.        On a careful scrutiny of the provision of section 12 of the Arbitration Act, 2001 it is depicted that either of the party may pray for appointment of Arbitrator, in accordance with the Arbitration clause as incorporated in Contract. However, if appointing authority failed to appoint the sole Arbitrator as per stipulation of the contract in that case either of the party can invoke the provision of the Sub-Section 4 of the section 12 of the Arbitration Act, 2001.  It appears the petitioner herein served notice to the Chairman of BADC for appointment of sole Arbitrator as per provision of clause 40.1 of the agreement dated 22.07.2008 however, the Chairman of BADC has failed to appoint a sole Arbitrator in accordance with the provision of clause 40.1 of the agreement. Therefore, the petitioner invoked the provision of sub-section 4 of section 12 of the Arbitration Act, 2001 for appointment of sole Arbitrator filing the instant Arbitration Miscellaneous Case before the learned District Judge, Dhaka. The learned District Judge however, directed the Chairman of BADC to nominate a person as a sole Arbitrator.

19.        But, on perusal of the record it appears that the Chairman of BADC has failed to comply the order of the Court as apparent from the annexure “C” as appended in revision application. However, it appears that the BADC opposite party No.1 instead of nominating the sole Arbitrator as per direction of the Court filed an application on 24.08.2016 to replace one Md. Mofajjal Hossain, NDC appointing another person Mr. Md. Abdul Jalil, Member Director of BADC which was allowed by the learned District Judge.

20.        From the facts and circumstances and in view of the provision of section 12 as quoted herein above we are, of the considered view that when a designated person failed to appoint Arbitrator according to the Arbitration clause or when the party failed to appoint the Arbitrator as per agreement either of the party can invoked the provision of section 12 of the Arbitration Act, 2001 for appointment of the Arbitrator.

21.        On a meticulous scrutiny it appears that when a party invoke the section 12 to appoint Arbitrator through the Court, the Court can ask for name of the Arbitrator from both the parties or Court itself appoint the Arbitrator but in the present case it appears that the learned District Judge directed the Chairman of BADC to appoint the Arbitrator as per clause 40.1 of the agreement.

22.        The direction given by the learned District Judge to the Chairman of BADC to appoint sole Arbitrator as per clause 40.1 of the agreement seems to us not a judicial view in accordance with the provision of section 12 of the Arbitration Act, 2001.

23.        We are, therefore, of the considered view that when one of the party requested the designated person by notice as per agreement to appoint Arbitrator but he failed, therefore, either aggrieved party invoked the jurisdiction of the Court under section 12 of the Arbitration Act, in such a situation, the appointment of Arbitrator in view of Arbitration Clause of the agreement cannot be invoked, as the Arbitration clause, in respect of so far it relates, appointment of Arbitrator has already been superseded for non compliance of the contractual obligation for appointment of the Arbitrator by the designated person of the contract made between the person.

24.        In the present case, we find that the petitioner noticed the Chairman of BADC for appointment of Arbitrator but he did not act in accordance with the provision of the Arbitration clause of the Contract. Therefore, the petitioner on an application under section 12(4) of the Arbitration Act, 2001 seek the redress before the learned District Judge, Dhaka, who ought to have act in accordance with the provision of section 12 wherein there is no such provision to ask one of the party to nominate the Arbitrator. Therefore, the 1st order dated 17.01.2006 directing the Chairman of B.A.D.C for appointment of Arbitrator by the learned District Judge was not in accordance with the provision of sub-section 4 of section 12 of the Arbitration Act, 2001. This Court are of the view that when a designated person has failed to comply his Contractual obligation by appointing the Arbitrator on the request of the counter part of Contract and due to his failure other party invoked the jurisdiction of the Court under section 12 of the Arbitration Act, 2001, in such a case, the Court would not further direct the designated person to appoint a sole Arbitrator.  It is the judicial function of the Court itself to appoint Arbitrator in accordance with the provision of section 12 of the Arbitration Act, 2001. Therefore, we are of the view that the 1st direction to appoint a sole Arbitrator by the Chairman BADC as directed by the learned District Judge seems to us not well founded in accordance with law therefore, replacement of another Arbitrator by the learned District Judge in spite of earlier Arbitrator also cannot be sustained in accordance with law.

25.        In view of the above discussions we find substance in the submissions of the learned Advocate for the petitioner.

26.        Thus, the Rule having merit, it succeeds.

27.        In the result, the Rule is made absolute.

28.        The order dated 17.01.2016 and 24.8.2016 passed by the learned District Judge, Dhaka in Arbitration Miscellaneous Case No.343 of 2009 are hereby set aside.

29.        We are, of the view that justice would be best served if we appoint sole Arbitrator to resolve the dispute in accordance with law expeditiously.

30.        Therefore, we are appointing Mr. Justice Md. Abdul Wahhab Miah, the Hon’ble Judge of the Appellate Division of the Supreme Court of Bangladesh as a sole Arbitrator to resolve the dispute and submit his report to the Court in accordance with law. The parties are directed to appear before Mr. Justice Md. Abdul Wahhab Miah to conclude the Arbitration proceeding expeditiously.

31.        The office is directed to issue writ and communicate the order to the learned Arbitrator as designated forthwith.

32.        Office is also directed to communicate this judgment and order to the learned District Judge, Dhaka at once.

 

Ed.