ADR landscape in Bangladesh: Challenges & Reforms

Justice AFM Abdur Rahman :
Resolution of dispute other than through judicial determination is known as ADR (Alternative Dispute Resolution), in which an impartial third person assists the parties in a dispute to resolve the issues between them. This mechanism, in Bangladesh, is being in use pending the adjudication in the court or as an independent mechanism to resolve cause connected with land, fiscal matter, family matter and so on. The huge and unprecedented backlog of cases in the courts compelled the incumbent government to bring about appropriate amendment in the relevant statute for using this mechanism in order to relive the litigating public from waiting years together to see the fate of their cause.

ADR in Bangladesh is practiced in four methods & techniques, namely (1) Mediation, (2) Conciliation, (3) Negotiations and (4) Arbitration as available elsewhere in the world. A fifth head of ADR, known as Early Neutral Evaluation (ENE), not being in use in Bangladesh, nevertheless prevailing in European countries.

The fourth head of ADR, known as Arbitration, is being in use in the commercial arena all over the world, including Bangladesh, either for disputes within local parties or in between the local and overseas party.

This method being based on pre-defined Arbitration agreement or Arbitration clause in the commercial agreement, no confusion occurs in the minds of the involved parties as to its availability at the time of need. The concerned parties knew that the dispute resolution mechanism is at their finger tips, which makes them assured as to the resolution of the dispute quickly & efficiently and continuation of their existing relationship with the other party in the business, despite the dispute.

Current atmosphere prevailing in Bangladesh shows that the businesses or governmental agencies use this method for the sake of convenience and as time effective method in resolving disputes through Alternative Dispute Resolution channel.

The use of arbitration as ADR has, to some extant, relieved the Civil Courts and the High Court Division of the Bangladesh Supreme Court from deep freezing the business causes for years together in the name of adjudication, while the business parties require quick and efficient disposal of their dispute. The use of this fourth method of ADR in Bangladesh now, by the commercial parties, gained ground which further paved the way to attract Foreign Direct Investment (FDI).

The FDI party as well as other commercial concerns may avail the facilities of Arbitration offered by the local Arbitration institutions, like BIAC (Bangladesh International Arbitration Center) or the facilities offered by FBCCI, DCCI and similar trade bodies or even ICC, LCIA, SIAC, HKIAC and other international arbitration channels.

Further the FDI party in dispute with the governmental agency, in a significant grave case, may adopt the option of institutional Arbitration through the International Center for Settlement of Investment Dispute (ICSID) of the World Bank, avoiding the court litigation in the Bangladeshi court.

Court litigation in Bangladesh has become so cumbersome now a days in relation to time consumption that, not to speak of a FDI party, even a local aggrieved person is not willing to attempt to have a redress of his dispute through court litigation.

The government was aware of situation and the demand of the day and was sincere to adopt changes and now some of the civil, fiscal and family litigation are now made amenable to ADR through amendment of relevant statutes.

The century old arbitration statute of 1940 was repealed in 2001 and a new statute Arbitration Act 2001 was enacted in the line of UNCITRAL model law formulated by the International Chamber of Commerce (ICC) along with adoption of New York convention regarding enforcement of foreign awards in Bangladesh.

The Code of Civil Procedure 1908 was amended in 2003 to insert Sections 89A and 89B to facilitate the litigating parties to attempt resolution of their dispute through ADR, pending the court case, by way of mediation either at the first instance or at the Appeal stage.

The income Tax Ordinance 1984 was amended in 2012 to insert section 52A-52H which allowed option to the litigating assesses to go for ADR, pending the litigation, either at the original stage or at the appellate stage.

The provisions of sections 22-25 of the Artha Rin Adalat Ain 2003 made available to the Lone-defendant for making an attempt at two stage of the pending suit for ADR, in the suit filed by the Bank or the financial institutions for recovery of loan defaulted money.

The provision of 192A-192C of the Customs Act 1969 has also dispute resolution method to be availed by the importers.

The Value Added Tax Act 2012 allowed the business houses to adopt ADR instead of going to court against the grievance it may have against assessment of VAT or other causes.

The EPZ Trade union & Industrial Relations Act 2019 has a soft ADR system for the workers of the Export Processing Zone (EPZ) to mitigate their disputes with the employer, prior to call a strike by the trade union of an industrial unit.

The Family Court Act 1985 made the ADR process of mediation a mandatory option to the litigating parties, before the judge could proceed to adjudication of any family suit.

The Muslim Family Law Ordinance 1965 made it compulsory to validate a Divorce (Talaq) to a Muslim wife through conciliation with the interference, mutatis mutandis, by either a Union Parishad Chairman or Municipal or City Corporation Councilor.

The Real Estate Development & Control Act 2010 allowed the disputing party to initiate a mandatory arbitration against developer, before it could go to court litigation.

The Village Court Act 2006 allowed the Chairman of the Union Parishad to constitute a so called Court on the application of an aggrieved person to resolve dispute of civil and criminal nature, valued less than taka Seventy Five thousands. Village Courts have been given the powers of a civil court under the Code of Civil Procedure 1908. Although the terminology Court has been used in the statute, but practically it’s a ADR process available to the village people to resolve their small causes either civil or criminal. It is a forum alike arbitration tribunal, where voluntary effort at bringing about a settlement of disputes between the parties is made through conciliation and persuasive manner using all the mechanism of negotiation, mediation and conciliation as tools to settle disputes between the parties.

All these amendment although paved the prospective development of ADR landscape in the dispute management system, nevertheless, despite these amendments and the sincere efforts of the incumbent government, the ADR landscape has not been developed in Bangladesh up to the mark. The reason behind is the absence of adequate trained ADR personnel to assist the disputing parties to use the ADR mechanism. The other reason is the non-cooperation of the governmental agency and bureaucracy rigidity to use this alternative channel, which they feel to be prejudicial to their claim against a citizen.

The Code of Civil Procedure 1908 in its recent insertion of section 89A formulated the procedure of mediation in a civil litigation, but except the retired Judge as mediator, other persons mentioned in the provision has no expertise to act as mediator. Moreover the newly inserted provision liable the District Judge to maintain a panel of mediator, but in some area the District Judge either unaware of such responsibility or he is unwilling to inspire his subordinate judges to invoke the provisions of sections 89A and 89B in an appropriate situation.

In the fiscal arena the Income Tax Ordinance 1984 in its newly inserted section 52A-52H although allowed the assesses to avail the ADR, but one out of fifty application allowed for ADR in recent year, returned unsuccessful due to non-cooperation of the department.

This situation is more or less prevailing in all other cases where the government amended the statute to facilitate ADR among the litigating public.

The legislature has not yet enacted any law for ADR towards day-to-day consumer disputes and so far these disputes are concerned, the landscaping of the ADR seems to be more worst. Because of the fact (1) that the prevailing ADR methods are not suitable to the parties in dispute or (2) that the consumers are unaware about the availability of any instant dispute resolution mechanism and if any, (3) the confusion regarding its procedural part unsuitable for the consumer to adopt it.

The consumer in disputes with a trader expects that the ADR process is supposed to provide him a ready-to-hand authority, which will extend consumers with quicker and easier way of resolving their disputes. The consumer further expects that he has to be satisfied that he doesn’t have to be worried about searching out the authority to have redress of his grievance and he has a quicker and effective method in his hand for the resolution of the dispute he has with a trader in respect of quality of goods he purchased or regarding refund policy.

The current ADR landscape in Bangladesh is not based upon the needs of such consumers. The ADR method of mediation, conciliation or negotiations and even arbitration cannot easily be fitted into the dispute resolution mechanism to redress consumer disputes. A consumer buying a Sewing Machine from Singer in installment may face problems with its quality and may stop payment of installment on the plea of non-quality goods or for return of the goods. The current ADR landscape does not provide any effective authority through which the people can avail the method.

Although the methods of ADR are outcome of practice, nevertheless the current ADR landscape in Bangladesh is not confirmatory with consumers’ needs at large. The result is that consumers’ needs are not being met and consumers practically does not know about any mechanism of ADR or if any, where to place their complaint.
Consequently one may see a worst situation that people has taken the law in hand in order to redress his grievance against the trader. This situation is not at all desirable.

It has already been noticed that the ADR techniques prevailing in Bangladesh through amendment of different statutes, mainly includes Mediation, Conciliation, Negotiation and Arbitration.

Before entering into the challenge of implementation of ADR mechanism in consumer dispute resolution and to other extent, let us examine the exact definition and working of ADR mechanism currently prevailing.

“Mediation” involves the amicable settlement of disputes between the parties with the help of an impartial person called mediator. A mediator may be an accredited mediator or an independent Advocate certified by particular authority. The task of the mediator is not to impose any settlement upon the parties, but to bring the parties together to the process of amicable settlement of their disputes. A mediator would show the parties the most appropriate path to compact their respective claim with a view to reaching a mutually acceptable solution. The mediator acts as a facilitator in between the parties for attaining settlement against the dispute. It is the parties’ own responsibilities for making decisions and not the mediator to impose anything on the fate of the parties to the dispute.

“Conciliation” is a private, informal process, where the conciliator would independently investigate the dispute and draft his report indicating the method of settlement of disputes.
In this method a neutral third person, called Conciliator, helps disputing parties to reach an agreement on the basis of his assessment of the gravity of the dispute. It is a process whereby the parties, together with the assistance of the neutral third person or persons, sort out the dispute, isolate the issues involved in the disputes systematically, develop options, consider alternatives and help the parties to reach a consensual settlement that will accommodate their claim either in full or in part.

“Negotiation”, which is further known as “Settlement Conference”, closely resembles mediation. However, it is more often referred to as a method wherein the parties to the dispute themselves would settle their disputes through discussion and negotiations. The negotiation process provides the parties an opportunity to exchange ideas, identify the irritant points of differences, find a solution, and get a commitment from each other to reach an agreement and to abide by the same.

“Arbitration” is a process for settlement of disputes through impartial arbiter or arbitral Tribunal, fairly and equitably, constituted by a person or persons or an institutional body, pursuant to an agreement known as Arbitration agreement or Arbitration clause in a commercial agreement.
It may be ad-hoc arbitration, contractual arbitration, institutional arbitration, or statutory arbitration. If the arbitral tribunal is of sole person, a neutral third person chosen by the parties to the dispute settles the disputes between the parties and if the parties chose their independent arbiter than a panel of three persons constitutes the tribunal with a chairman which resolve the dispute in informal manner. The tribunal issues its award by way of judgment which is binding upon the parties and enforceable as decree of a civil court. Though it resembles the court room based adjudication, yet it is a settlement of disputes and not adjudication. It involves less procedure and less cumbersome process. It is quite useful in resolving different kinds of disputes including international commercial disputes. In Bangladesh, International commercial arbitration is the only legally binding and enforceable alternative to ordinary court proceedings under the provisions of Arbitration Act 2001.

Although there is no practice of “Early Neutral Evaluation (ENE)” in Bangladesh, nevertheless it is an alternative approach, now prevailing in EU countries, that is particularly well suited to European multiparty family provision claims. In a dispute, where there is little or no contradictory facts, this method of ADR is feasible. In this method of ADR an independent and impartial evaluator, commonly a retired judge or senior Barrister or an expert on particular subject, is appointed to give the parties an assessment of the merits of their respective claim. The evaluator will be chosen by the parties and will be a specialist in the area concerned thereby giving confidence to the parties.
The ENE is non-binding and is entirely without prejudice. ENE can be used as a standalone dispute resolution method or together with mediation. An ENE offers the same advantages as an arbitration, with the exception that the evaluation is voluntary, unlike the Award issued in Arbitration. An ENE will be held in an environment which is more conducive to settlement. The ENE can be arranged at relatively short notice thereby saving considerable costs.

Challenge of ADR in Bangladesh:

The primary challenge a Bangladeshi consumer faces immediately after a dispute has crept up with a trader is to find out an ADR authority to complain to. The radical idea of going to court being uncomfortable on the practical plea of non-timeliness, the consumer finds himself in a sorry state. This gives benefit to the errant trader to play over the consumer. Therefore the availability of information as to existence of dispute resolution system for consumer dissatisfaction is important and significant in order to harmonization of ADR landscaping.

Next to mention the drawbacks of traditional ADR mechanism which appears to have little impact upon the consumer dispute resolution in Bangladesh. Unless there is statutory compulsion, a errant trader will not cooperate in management of consumer disputes through mediation, conciliation or negotiation method. The method of Arbitration since require prior agreement, the same is not applicable in consumer dispute resolution.

Consumer Rights Protection Act 2009 prevailing in Bangladesh has a little unknown provision for On-line dispute management system. A consumer is entitled to lodge complaint with the Consumer Rights Protection Department for any violation of the Act. The Deputy Commissioners of the districts can exercise the same power as given to the department.
Consumer does not find the process easy and user friendly, although they feel that its better than not to have one. Consumers expect an independent, impartial, and expert ADR schemes should prevail which is important.

The lack of knowledge of existence of ADR mechanism for resolution of consumer disputes and non availability of appropriate method is the biggest challenge in spreading off the ADR mechanism among the consumers in Bangladesh. Non-display of any signpost attracting consumers attention to a particular method of dispute resolution, should it crept up in between trader and the consumer, is another lacuna against availability of information. There is no law mandating a trader to participate in a particular method of ADR, nor there is any awareness program regarding the ADR system as prevailing within the country.

The prospective reforms:

The incumbent government, under its Ministry of Law and Justice, is required to adopt the principle that participation in ADR should be mandatory across all the consumer sectors. A statute is required to be enacted to that end. A office of Ombudsman may be created for every commercial sector. The current system of filling complaint application to the concern department is required to be abolished, as the same is unworthy of availing by the aggrieved consumer. The workforce engaged in ADR sector are required to be trained. The judges should be given more authority to exercise and act as mediator, conciliator, negotiator and arbiter by himself, over and above his judgeship, for the purpose of ADR.

While this reforms may lead to fears from some businesses that the system will be abused, particularly where disputes are raised by muscleman consumer or complainants are exhibiting vexatious behavior, nevertheless the benefits in ensuring accessible redress to consumers and enhancing consumers confidence will be significant.

The failure to extend correct method of protecting the right to have disputes resolved in quicker and efficient manner, may lead to violation of the provisions of article 27 and 31 of the Bangladesh Constitution, guaranteeing a citizen to be treated in accordance with law and only in accordance with law. Therefore the authority has to be vigilante in order to protect the consumers rights, so far the dispute resolution is concerned through ADR mechanism.

Writer : Former Justice: Bangladesh Supreme Court.