Stay of Proceedings in Favour of International Commercial Arbitration in Bangladesh: A Comparative Analysis between Arbitration Act 1940 and 2001

This is a settled rule in international commercial arbitration where parties have agreed to resolve their dispute through arbitration, there is inevitably the right and expectation to have any reference to the court to have stayed in favour of arbitration. This rule, however, may not necessarily be the case in a jurisdiction that is less exposed to arbitration practice. Settling disputes through arbitration in Bangladesh is not a new method but this practice had been in place for many years and was previously governed by the Arbitration Act of 1940. After 1971 the same Act continued to be the applicable law in Bangladesh till the Arbitration Act was enacted in 2001. When the Arbitration Act 2001 was enacted many expected a major change in the court’s approach to dealing with a stay of proceedings in favour of Arbitration. Previously, upon the applicant fulfilling certain conditions, the court had the discretion whether to grant stay proceedings. However, under Arbitration Act 2001 granting the stay proceedings are now authorized upon the fulfillment of certain conditions. This paper will discuss the provisions under the Arbitration Act 1940 in relation to staying proceedings followed by examining the efficacy of stay proceeding in the Arbitration Act 2001.