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FDI and Dispute Settlement Arrangements in Bangladesh: Issues and Challenges

Published online by Cambridge University Press:  25 January 2021

Mohammad Belayet HOSSAIN Open the ORCID record for Mohammad Belayet HOSSAIN [Opens in a new window] ,
Asmah Laili Bt YEON  and
Ahmad Shamsul Bin Abd. AZIZ
Mohammad Belayet HOSSAIN
Affiliation:
School of Law, Universiti Utara Malaysia, Kedah, [email protected]
Asmah Laili Bt YEON
Affiliation:
School of Law, Ghazali Shafie Graduate School of Government, Universiti Utara Malaysia, Kedah, [email protected]
Ahmad Shamsul Bin Abd. AZIZ
Affiliation:
School of Law, Ghazali Shafie Graduate School of Government, Universiti Utara Malaysia, Kedah, [email protected]
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Abstract

For any foreign investor, protection of their investment is a primary concern in host states. National legislations and BITs usually provide legal security to them so that they can exercise their desired economic freedom in host countries. Without legal safeguards for their investments, they will not be motivated to invest their capital further. Like other host states, generally, the national laws and BITs of Bangladesh provide significant investment protection guarantees. This paper will discuss how far the protection through judicial or arbitral settlement is established in the legal framework and BITs of Bangladesh. Dispute settlement mechanisms in Bangladesh, various ICSID cases involving Bangladesh, and conflicts between Bangladesh and foreign investors are discussed. The paper also covers the issues and challenges of judicial arrangements in Bangladesh, and findings show that dispute settlement arrangements in Bangladesh are not up to international standards and require significant development. Last, recommendations are provided for consideration.

Type
Notes and Comments
Information
Asian Journal of International Law , Volume 11 , Issue 1 , January 2021 , pp. 36 - 49
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

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Footnotes

*

PhD (candidate), School of Law, Universiti Utara Malaysia; Advocate (Bangladesh); Assistant Professor, School of Law, Chittagong Independent University, Bangladesh (corresponding author). Special thanks are owed to the Journal Editors and to the anonymous reviewers for their insightful comments. All errors remain solely the authors’ own.

**

Professor, School of Law, Ghazali Shafie Graduate School of Government, Universiti Utara Malaysia.

***

Senior Lecturer, School of Law, Ghazali Shafie Graduate School of Government, Universiti Utara Malaysia.

References

1. See for example, Agreement Between the People's Republic of Bangladesh and the Belgo-Luxembourg Economic Union for the Promotion and Protection of Investments, 22 May 1981 (entered into force 15 September 1987). Other BITs are available on the UNCTAD website: United Nations Conference on Trade and Development Investment Policy Hub (n.d.), online: UNCTAD Investment Policy Hub <https://investmentpolicy.unctad.org/international-investment-agreements>.

2. The International Centre for Settlement of Investment Disputes is an international arbitration institution established in 1966 for legal dispute resolution and conciliation between international investors. ICSID is part of and is funded by the World Bank Group, headquartered in Washington, DC, in the US. See ICSID: World Bank Group (n.d.), online: ICSID <https://icsid.worldbank.org/en/>.

3. The Foreign Private Investment (Promotion and Protection) Act, 1980 (Act No. XI of 1980, Bangladesh); see Government of the People's Republic of Bangladesh–Legislative and Parliamentary Affairs Division, Laws of Bangladesh (n.d.), online: Laws of Bangladesh <http://bdlaws.minlaw.gov.bd/act-597.html>.

4. See Government of the People's Republic of Bangladesh–Finance Division, Ministry of Finance, “Bangladesh Economic Review 2017, Chapter 8: Industry” (n.d.), online: MOF <https://mof.portal.gov.bd/sites/default/files/files/mof.portal.gov.bd/page/e8bc0eaa_463d_4cf9_b3be_26ab70a32a47/Ch-08%20(English-2017)_Final.pdf>.

5. VOSS, Jan Ole, The Impact of Investment Treaties on Contracts between Host States and Foreign Investors (Leiden/Boston: Martinus Nijhoff, 2011) at 120CrossRefGoogle Scholar.

6. See “Bangladesh”, UNCTAD Investment Policy Hub (n.d.), online: UNCTAD <https://investmentpolicy.unctad.org/international-investment-agreements/countries/16/bangladesh> [Bangladesh BITs].

7. Agreement Between the Government of the Republic of Turkey and the Government of the People's Republic of Bangladesh Concerning the Reciprocal Promotion and Protection of Investments, 12 April 2012 (not yet entered into force), art. 10.

8. Agreement on Reciprocal Promotion and Protection of Investment Between the Government of the People's Republic of Bangladesh and the Government of the Islamic Republic of Iran, 29 April 2001 (entered into force 5 December 2002), art. 12.

9. Agreement on the Promotion and Reciprocal Protection of Investments Between the Government of the People's Republic of Bangladesh and the Kingdom of Denmark, 5 November 2009 (entered into force 27 February 2013), art. 9.

10. Agreement Between the Government of the People's Republic of Bangladesh and the Government of the Republic of Uzbekistan on Reciprocal Protection and Promotion of Investments, 18 July 2000 (entered into force 24 January 2001), art. 10; see also Bangladesh BITs, supra note 6.

11. NAKIB, Muhammad Nasrullah, Regulating Foreign Direct Investment for Development: Bangladesh in Context (Sydney: Macquarie University Press, 2014)Google Scholar.

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14. Case details are available at “Cases”, ICSID: World Bank Group (n.d.), online: ICSID <https://icsid.worldbank.org/en/Pages/cases/AdvancedSearch.aspx>.

15. Saipem S.p.A. v. The People's Republic of Bangladesh, Decision on Jurisdiction and Recommendations on Provisional Measures, 21 March 2007, ICSID Case No. ARB/05/07 at 34, para. 122.

16. See also Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan, Decision on Jurisdiction, 14 November 2005, ICSID Case No. ARB/03/29 at 33, para. 121.

17. Chevron Bangladesh case, supra note 12.

18. Scimitar Exploration Limited v. Bangladesh and Bangladesh Oil, Gas and Mineral Corporation, Award, 4 May 1994, ICSID Case No. ARB/92/2.

19. Niko case, supra note 13.

20. NEPC Consortium Power Limited v. Bangladesh Power Development Board, ICSID Case No. ARB/18/15.

21. Niko Resources (Bangladesh) Ltd. v. Bangladesh Petroleum Exploration & Production Company Limited (“Bapex”) and Bangladesh Oil Gas and Mineral Corporation (“Petrobangla”), Bapex Rejoinder Filed with ICSID Tribunal, 25 September 2014, ICSID Case No. ARB/10/18 at paras 2, 21.

22. Niko Resources (Bangladesh) Ltd. v. Bangladesh Petroleum Exploration & Production Company Limited (“Bapex”) and Bangladesh Oil Gas and Mineral Corporation (“Petrobangla”), Procedural Order No. 7, 17 October 2014, ICSID Case No. ARB/10/18.

23. M. Rafiqul ISLAM, “The Niko Arbitration: Lessons for Bangladesh” The Daily Star (20 November 2018), online: The Daily Star <https://www.thedailystar.net/law-our-rights/law-analysis/news/the-niko-arbitration-lessons-bangladesh-1662817>.

24. The Constitution of the People's Republic of Bangladesh (1972), arts. 101, 102(2), 103.

25. Companies Act, 1994 (Act No. XVIII, 1994, Bangladesh).

26. Banking Companies Ordinance, 1962 (Ordinance No. LVII, 1962, Bangladesh).

27. Admiralty Court Act, 2000 (Act No. XLIII, 2000, Bangladesh).

28. Artha Rin Adalat Ain, 2003 (Act No. VIII, 2003, Bangladesh) [Artha Rin Adalat Ain].

29. Income Tax Ordinance, 1984 (Ordinance No. XXXVI, 1984, Bangladesh) [Income Tax Ordinance].

30. Bangladesh Labour Act, 2006 (Act No. XLII, 2006, Bangladesh).

31. Income Tax Ordinance, supra note 29.

32. Code of Civil Procedure, 1908 (Act No. V, 1908, Bangladesh).

33. Bankruptcy Act, 1997 (Act No. X, 1997, Bangladesh).

34. Arbitration Act, 2001 (Act No. I, 2001, Bangladesh) [Arbitration Act].

35. Artha Rin Adalat Ain, supra note 28.

36. Information & Communication Technology Act, 2006 (Act No. XXXIX, 2006, Bangladesh).

37. UNCITRAL Model Law on International Commercial Arbitration, UN Doc. A/40/17 (1985).

38. Section 2(c) states that international commercial arbitration means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in Bangladesh, and where at least one of the parties is: (1) an individual who is a national of, or habitually resident in, any country other than Bangladesh; (2) a body corporate which is incorporated in any country other Bangladesh; or (3) a company or an association or a body of individuals whose central management and control is exercised in any country other than Bangladesh.

39. Bangladesh International Arbitration Centre (n.d.), online; BIAC <http://biac.org.bd/>.

40. HOSSAIN, Ajmalul, “Bangladesh” in RESPONDEK, Andreas, ed., Asia Arbitration Guide (Singapore: Respondek & Fan, 2009), at 23Google Scholar.

41. Agreement Between the Government of the Republic of Italy and the Government of the People's Republic of Bangladesh on the Promotion and Protection of Investments, 20 March 1990 (entered into force 20 September 1990).

42. Agreement Between the Federal Republic of Germany and the People's Republic of Bangladesh Concerning the Promotion and Reciprocal Protection of Investments, 6 May 1981 (entered into force 14 September 1986).

43. Arbitration Act, supra note 34 at ss. 45(a), 46.

44. “Company Profile”, Grameenphone (n.d.), online: Grameenphone <https://www.grameenphone.com/about/discover-gp/about-grameenphone/company-profile>.

45. “GP Pays BTRC Tk 1,000cr” The Daily Star (23 February 2020), online: The Daily Star <https://www.thedailystar.net/business/grameenphone-gp-pays-btrc-tk-1000-crore-1871956>.

46. Ibid.

47. Mizanur RAHMAN, “HC Asks Robi to Settle Tk138cr of BTRC Audit Claim” Dhaka Tribune (5 January 2020), online: Dhaka Tribune <https://www.dhakatribune.com/bangladesh/court/2020/01/05/hc-asks-robi-to-settle-tk138cr-of-btrc-audit-claim>.

48. “Robi Pays First Instalment of BTRC's Audit Claim” The Financial Express (15 January 2020), online: The Financial Express <https://thefinancialexpress.com.bd/national/robi-pays-first-instalment-of-btrcs-audit-claim-1579004573>.

49. Mizanur RAHMAN, “3.6 Million Court Cases Pending” Dhaka Tribune (25 August 2019), online: Dhaka Tribune <https://www.dhakatribune.com/bangladesh/court/2019/08/25/3-6-million-court-cases-pending>.

50. M.I. FAROOQ, Sajed A. SAMI, and Taslima YASMIN, “Impact of International Arbitration Proceeding: Governmental Approach and Investment Climate in Bangladesh”, Economic Research Group, Bangladesh, Working Paper No. 1, June 2010.

51. Lindsey MARCHESSAULT, “Chevron Bangladesh Block Twelve, Ltd. and Chevron Bangladesh Blocks Thirteen and Fourteen, Ltd. v. People's Republic of Bangladesh (ICSID Case No. ARB/06/10): Introductory Note” (2011) 26 ICSID Review–Foreign Investment Law Journal 256, at 260–1.