A case for dedicated commercial courts in Bangladesh

Despite having over 280,000 registered companies, Bangladesh lacks dedicated courts for corporate disputes. Currently, only two benches within the High Court Division (HCD) handle such cases, leading to prolonged delays. Pertinently, the Honourable Chief Justice Syed Refaat Ahmed time and again emphasised the need for establishing specialised commercial courts for the swift and effective resolution of commercial disputes on different occasions.

As of now, a significant number of trade-related disputes are pending before Bangladeshi courts, some of which have been unresolved for nearly a decade. The cumulative value of these pending trade disputes is estimated at Tk 2.5 lakh crore, tying up substantial capital that could otherwise contribute to economic growth.

The backlog of cases can largely be attributed to the acute shortage of judges, with the country having one judge for nearly 94,444 people, a stark contrast to neighbouring countries like India and Pakistan. This situation is further exacerbated by the underutilisation of mediation and arbitration, methods which are globally considered the most efficient, accessible, and enforceable alternatives to traditional litigation, allowing parties to negotiate and reach out-of-court settlements.

Against this backdrop, Bangladesh can draw inspiration from other countries. For instance, in order to facilitate the resolution of commercial cases expeditiously, efficaciously, and at a reasonable cost, India has an enacted the Commercial Courts Act in 2015. The Commercial Courts set up under this Act have specific jurisdiction to handle disputes over business contracts, trade disagreements, intellectual property rights, and other commerce-related matters between businesses or individuals involved in commercial transactions. Similar models also exist in the USA, UK, Singapore, etc.

Notably, India mandates pre-institution mediation and settlement (PIMS), a process where parties attempt to resolve disputes before formally filing a case, for commercial suits that do not seek urgent interim relief. It helps businesses resolve disputes without compromising their reputation or confidentiality and maintaining healthy relationships with their competitors. Moreover, the Act contemplates the training of judges on the latest trends, practices, and commercial transactions by the appropriate State Government. Such a provision is important to ensure that the judgements given by these Courts are not only speedy but also just. Recently, the draft amendment to the Indian Commercial Courts Act has proposed setting a maximum one-year limit to complete all proceedings in enforcing a judgment after filing an application for execution, helping achieve the primary goal of expeditious resolution and enforcement.

Enactment of a legislation similar to India's Commercial Courts Act in Bangladesh, and establishment of dedicated Commercial Courts to adjudicate high-value commercial disputes, would go a long way in bringing a huge transformation within Bangladesh's civil justice system. This reform will not only accelerate economic development in Bangladesh but also improve the state of foreign direct investment. The proposed Act should delineate what cases will go to these special courts, for instance, cases above a certain pecuniary value, and set strict time limits for their disposal. The legislation should also make pre-institution mediation mandatory in light of the Code of Civil Procedure 1908, encouraging parties to explore amicable settlement before proceeding to full trial. Additionally, the Act must set qualifications for the judges, making sure that the judges in these Courts have experience and expertise in business law to understand complex contracts and trade rules.

To conclude, if carefully drafted and implemented, a Commercial Courts Act in Bangladesh can make the resolution of business disputes faster and smoother, giving confidence to investors and making Bangladesh a better place for business and trade.

The writers are Associate Professor and Assistant Director, Centre for ADR Jindal Global Law School, India, and student of law at Hidayatullah National Law University, Raipur respectively.