দায়বর্জন বিবৃতি (DISCLAIMER)

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1

IN THE SUPREME COURT OF BANGLADESH HIGH COURT DIVISION

(STATUTORY ORIGINAL JURISDICTION)

                Present:

Mr. Justice Md. Toufiq Inam

Arbitration Application No. 07 of 2026.

An application under Section 7A of the Arbitration Act, 2001.

And

IN THE MATTER OF:

SVC Jhilmil Residential BD Limited

.......Petitioner.

-Versus-

Rajdhani Unnayan Kartipakkha (RAJUK), represented by its Chairman, RAJUK Bhaban, RAJUK Avenue, Dhaka 1000 and others. ........ Respondents.

Mr. Masood R. Sobhan, Senior Advocate with Mr.Sheikh Mohammad Morshed, Senior Advocate with

Mr. Md. Kamal Hossain Mehazi,

Mr. Md. Fuad Hassan Khan, and

Ms. Jennifer Mymoon Billah,

Ms. Jusmin Sultana,

Md. Shahadat Hossain, Advocates

.........For the petitioner.

Mr. Md. Ruhul Quddus Kazal, Attorney General, with

Mr. Mohammad Arshadur Rouf, Additional Attorney General, with

Mr. Omar Sadat, Senior Advocate

.......... For the Respondent No. 1.


The 12th July 2026.

Md. Toufiq Inam, J.

  1. By this application under section 7A of the Arbitration Act, 2001 (“the Act 2001), the petitioner seeks, inter alia, admission of  the  application  and  interim  measures  restraining  the respondent from terminating the contract and from encashing the bank guarantee pending arbitration.

The Background Facts

  1. The  petitioner  is  a  project  company  incorporated  for implementation of the project titled "Construction of High-Rise Residential Apartment Buildings for Low and Middle-Income Groups at Jhilmil Residential Project, Dhaka" under a Public- Private  Partnership  (PPP)  arrangement.  According  to  the petitioner, it is substantially owned and controlled by foreign entities, namely BNG Global Holdings SDN BHD, Malaysia and  Jiangxi  Construction  Engineering  (Group)  Corporation Ltd.,  China,  and  the  dispute  accordingly  constitutes  an international  commercial  arbitration  within  the  meaning  of section 2(c)(iii) of the Act, 2001.
  2. Pursuant to an Invitation for Bid dated 25.01.2017 issued by Rajdhani  Unnayan  Kartripakkha  (RAJUK)  under  the  Public Procurement  Guidelines  for  PPP  Projects,  2016,  the  bid submitted by the petitioner's major shareholder was accepted and a Letter of Award was issued on 14.10.2017. Thereafter, on 16.11.2017,  the  parties  executed  the  PPP  Contract  for implementation  of  the  project.The  petitioner  contends  that, under the PPP Contract, the performance bank guarantee was to become operative from the "Appointed Date", that is, the date on  which  all  conditions  precedent  were  fulfilled  or  waived. Although the petitioner fulfilled its contractual obligations and satisfied the conditions precedent on its part, the respondent allegedly failed to perform its reciprocal obligations, including the appointment of the Independent Panel, with the result that the  Appointed  Date  never  occurred.  Nevertheless,  at  the insistence  of  the  respondent,  the  petitioner  furnished  the aforesaid bank guarantee on 22.07.2018 for Tk.1,000,000,000/-, which  has  since  been  periodically  extended  and  presently remains valid until 21.07.2026.
  1. According  to  the  petitioner,  it  invested  substantial  foreign equity in the project and completed various preparatory works, including  soil  investigations,  sub-structural  and  architectural designs,  and  other  site  development  activities.  The implementation of the project, however, was delayed due to the COVID-19  pandemic  and  disputes  subsequently  arose regarding  the  parties'  respective  obligations  under  the  PPP Contract. While the petitioner was requesting the respondent to proceed with implementation of the project and appoint the Independent Panel, the respondent, by notice dated 18.02.2024, alleged  non-fulfilment  of  the  conditions  precedent.  The petitioner  denied  those  allegations,  asserting  that  it  was  the respondent  who  had  failed  to  discharge  its  contractual obligations.  Thereafter,  by  letter  dated  29.01.2025,  the respondent informed the petitioner that no decision could be taken  as  the  matter  had  become  sub  judice  because  of  the pendency of Writ Petition No. 13170 of 2024.
  1. The petitioner further alleges that it has recently learnt from reliable  sources  that  the  respondent  is  contemplating encashment of the bank guarantee without lawful authority and without  prior  notice.  Clause  31.3.1  of  the  PPP  Contract provides that all disputes arising out of or in connection with the  contract  shall  be  resolved  by  arbitration  under  the Act, 2001, while clause 31.3.2 designates Singapore as the juridical seat of arbitration. In pursuance of the arbitration agreement, the petitioner appointed its nominee arbitrator on 15.04.2026 and initiated the arbitral process. Pending constitution of the arbitral tribunal and the arbitral proceedings, the petitioner has invoked the jurisdiction of this Court under section 7A of the Arbitration  Act,  2001  seeking  interim  protection  against encashment of the bank guarantee.

Threshold Question

  1. Atthe very threshold, Mr. Md. Ruhul Quddus Kazal, learned Attorney  General  appearing  for  RAJUK-  respondent  No.  1, raises a preliminary objection as to the maintainability of the present application. He submits that the issue is no longer res integra in view of the majority decision of the Larger Bench in Accom Travels and Tours v. Oman Air SAOC, reported in 27 BLC 596, wherein it was held that sections 7, 7A and 10 of the Act, 2001 are inapplicable to foreign-seated arbitrations, except that interim measures under section 7A may be granted only at the stage of enforcement of a foreign arbitral award. Since the arbitration agreement in the present case designates Singapore as the juridical seat of arbitration, the learned Attorney General contends that the present application under section 7A is not maintainable and that the said decision of the Larger Bench is binding upon this Court.
  1. He further submits that, even otherwise, the petitioner is not entitled to any interim protection as the prima facie case and balance of convenience and inconvenience does not lie in its favour. According to him, the petitioner is merely a sham or special-purpose  company  having  no  substantial  assets  or independent financial standing, whereas the performance bank guarantee was furnished to secure the petitioner's contractual obligations under the PPP Contract. He argues that any restraint upon  its  encashment  would  seriously  prejudice  the  public interest  and  the  implementation  of  the  project,  while  no irreparable  loss  would  be  caused  to  the  petitioner  if  the contractual mechanism is allowed to operate in accordance with its terms.

Petitioner’s Standpoints

  1. In reply, Mr. Masood R. Sobhan and Mr. Sheikh Mohammad Morshed, learned Senior Advocates appearing for the petitioner, submit that the majority decision of the Larger Bench in Accom is contrary to the legislative object underlying the Arbitration Act, 2001. He contends that, by introducing section 7A through the Amendment Act of 19.02.2004, the Legislature consciously empowered  the  Court  to  grant  interim  measures  before  or during arbitral proceedings or until enforcement of the award. According to the learned Senior Advocate, section 7A confers only a limited ancillary and protective jurisdiction to preserve the subject matter of the dispute and does not amount to the exercise  of  supervisory  jurisdiction  over  the  arbitral proceedings.  He  therefore  argues  that  an  application  under section 7A is maintainable notwithstanding that the parties have chosen a foreign seat of arbitration, and that the contrary view adopted by the Larger Bench, confining the operation of section 7A to domestically seated arbitrations (except at the stage of enforcement of a foreign award), is founded upon an erroneous interpretation of the legislative scheme of the Act.
  1. They submit that the majority decision of the Larger Bench in Accom  no longer represents the prevailing law, having been rendered  per  incuriam.  He  contends  that  the  Larger  Bench reached  its  conclusion  without  considering  the  binding decisions  of  the Appellate  Division  in  Mosharaf  Composite Textile Mills Ltd. v. ECOM Agroindustrial Corp. Ltd., reported in 4 SCOB (2015) AD 28, and the subsequent judgment dated 11.07.2017 passed in Civil Review Petition No. 213 of 2015. In the review judgment, the Appellate Division expressly held that Unicol Bangladesh Ltd. v. Maxwell Engineering Works Ltd., 56 DLR (AD) 166, stood pro tanto overruled. Since the majority decision  in  Accom  was  founded  substantially  upon  Unicol without noticing or considering the binding pronouncements in ECOM,  the  very  jurisprudential  foundation  of  the  decision, according to the learned Senior Advocate, stands displaced. He therefore submits that Accom was rendered per incuriam, no longer  represents  the  prevailing  law  on  the  subject,  and consequently does not bind this Court.
  2. It is submitted that the decisions of the Appellate Division in ECOM recognise that the choice of a foreign arbitral seat does not,  by  itself,  exclude  the  jurisdiction  of  the  courts  of Bangladesh to render judicial assistance under the Arbitration

Act, 2001. In support of this proposition, he also relies upon Crown Maritime Co. Ltd. v. Royal Boskalis Westminster NV, 16 BLC  140,  wherein  this  Court  held  that  section  7A  may  be invoked in aid of a foreign-seated arbitration for preservation of assets  situated  within  Bangladesh.  He  further  contends  that modern  international  arbitration  jurisprudence  recognises  the jurisdiction  of  national  courts  to  grant  interim  protective measures in support of foreign-seated arbitrations where the assets or property requiring protection are located within the forum  State.  He  also  refers  to  the  proceedings  before  the Appellate  Division  in  Italian  Thai  Development  Public Company Limited v. The Export-Import Bank of India (Civil Petition for Leave to Appeal No. 1828 of 2024, judgment dated 01.09.2024), wherein interim protection was continued until the first sitting of the arbitral tribunal in Singapore. According to him, although the Appellate Division did not finally determine the  scope  of  section  7A,  it  did  not  affirm  the  restrictive interpretation  adopted  by  the  High  Court  Division,  thereby leaving the question open for determination in an appropriate case. On these grounds, he submits that this Court possesses jurisdiction under section 7A to grant interim protection in aid of  the  foreign-seated  arbitration  and  accordingly  prays  for allowing the application.

  1. On the merits, the learned Senior Advocates submit that the petitioner  has  already  invested  substantial  foreign  capital  in implementation of the project and that serious disputes have arisen  regarding  fulfilment  of  the  conditions  precedent, appointment of the Independent Panel, reciprocal contractual obligations  of  the  parties,  and  the  delay  occasioned  by supervening  events,  including  the  COVID-19  pandemic. According to them, the petitioner has raised substantial and bona  fide  issues  as  to  whether  the  contractual  obligations, including  the  bank  guarantee,  ever  became  operative  in  the absence of the "Appointed Date" and whether the respondent's own failure to perform its reciprocal obligations prevented the occurrence  of  that  event.  They  further  submit  that,  in accordance with the arbitration agreement, the petitioner has already  appointed  its  nominee  arbitrator  on  15.04.2026  and initiated the arbitral process. The relief sought from this Court is, therefore, of a limited and temporary nature. The petitioner does not seek adjudication of the parties' contractual rights or interference  with  the  merits  of  the  dispute.  It  merely  seeks preservation of the status quo by restraining encashment of the bank guarantee until the arbitral tribunal at the agreed foreign seat is constituted and assumes jurisdiction, whereupon it may seek appropriate interim measures from the tribunal itself.

Respondent’s Contentions

  1. Mr. Mohammad Arshadur Rouf, learned Additional Attorney General  and  Mr.Omar  Sadat,  learned  Senior  Advocate appearing for the respondent No1, oppose the application and submit that Article 25 of the agreement expressly empowers the respondent to terminate the contract upon the occurrence of the defaults  specified  therein.  An  order  restraining  termination would,  in  effect,  prevent  the  respondent  from  exercising  a contractual  right  expressly  reserved  under  the  agreement. Granting such relief would amount to rewriting the contract and prejudging the merits of the dispute.
  1. They further argue that similarly a bank guarantee constitutes an independent and autonomous contract between the issuing bank and the beneficiary. Courts should not interfere with its invocation except in exceptional cases of established fraud of an  egregious  nature  vitiating  the  underlying  transaction  or where encashment would result in irretrievable injustice. Mere disputes that have arisen under the principal contract do not furnish a valid ground to restrain encashment.
  2. They also submit that the choice of a foreign seat carries with it the consequence that supervisory jurisdiction vests exclusively in the courts of the seat, and permitting recourse to section 7A would  impermissibly  extend  the  territorial  operation  of  the Arbitration Act beyond the limits prescribed by section 3. They, therefore, pray that the application be rejected.

Discussion and Reasoning

  1. As  the  preliminary  objection  goes  to  the  very  root  of  the maintainability of the present application and centres upon the correctness,  scope  and  applicability  of  the  Larger  Bench decision in Accom, it is necessary to notice the principles laid down therein. By a majority of 2:1, the Larger Bench held that by virtue of sections 3(1) and 3(2) of the Arbitration Act, 2001, the provisions of the Act, other than sections 45, 46 and 47, are inapplicable where the seat of arbitration is outside Bangladesh. Consequently, sections 7, 7A and 10 have no application to foreign-seated arbitrations, except that interim measures under section 7A may be granted only at the stage of enforcement of a foreign arbitral award. Nevertheless, despite the inapplicability of section 10, the civil court ought to have stayed the suit in the exercise  of  its  inherent  jurisdiction  under  section  151of  the Code of Civil Procedure (“CPC”), and referred the parties to arbitration in accordance with their arbitration agreement.
  1. The principal question that falls for determination is whether an application under section 7A of the Act, 2001 is maintainable where the parties have agreed to a foreign seat of arbitration. The  resolution  of  this  question  depends  upon  the  proper construction  of  section  7A  read  together  with  the  scheme, object and legislative purpose of the Act, 2001. It is well settled that a statutory provision must not be construed in isolation. Every provision is to be interpreted in the context of the statute as a whole so that each part is given meaningful effect and the legislative purpose is advanced rather than defeated.
  2. Having  heard  the  learned  Advocates  for  the  parties  and considered the decisions cited by the parties, together with the subsequent development in the Appellate Division, this Court considers  it  appropriate  to  examine  the  issues  under  the following heads before expressing its views.
  1. Effect of the Non-Obstante Clauses in Sections 7 and 7A
  1. By  the  Arbitration  (Amendment)  Act,  2004  (Act  No.  II  of 2004),  which  came  into  force  on  19.02.2004,  Parliament inserted  section  7A  into  the  Arbitration  Act,  2001,  thereby creating an independent statutory jurisdiction in the High Court Division to grant interim measures. Section 7A was inserted in the Act 2001 on 19.02.2004 as-

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  1. The non-obstante clauses employed in sections 7 and 7A are materially different and must be given their due significance. Section 7 opens with the words, "Notwithstanding anything contained in any other law for the time being in force," thereby giving the Arbitration Act, 2001 overriding effect over all  other  laws  governing  judicial  proceedings.  Section  7A, however, does not override "any other law"; instead, it begins with  the  words,  "Notwithstanding  anything  contained  in section  7."  By  specifically  overriding  section  7  itself, Parliament  created  an  express  exception  to  the  general jurisdictional scheme contained in that provision.
  1. The  legislative  intent  is  therefore  clear.  While  section  7 embodies the general principle of limited judicial intervention in  matters  covered  by  an  arbitration  agreement,  section  7A preserves a distinct and independent jurisdiction of the High Court  Division  to  grant  interim  protective  measures.  Had Parliament  intended  section 7A  to  be  controlled  entirely  by section 7, there was no necessity to commence the provision with an “overriding clause.” The opening words of section 7A indicate that the jurisdiction conferred therein is exceptional

and self-contained, enabling the Court to grant interim relief in aid  of  arbitration  notwithstanding  the  general  limitations contained in section 7. Any interpretation that renders the non- obstante clause in section 7A redundant would be contrary to the  settled  principle  that  every  word  employed  by  the legislature  must,  so  far  as  possible,  be  given  meaning  and effect.

  1. Legislative Intent Behind the Introduction of Section 7A
  1. The  language  of  section  7A  clearly  demonstrates  that Parliament intended to create a jurisdiction distinct from the Court's  supervisory  powers  over  arbitration.  The  provision begins  with  a  non-obstante  clause  and  authorises  the  High Court Division to grant interim measures "before or during continuance of the proceedings or until enforcement of the award under section 44 or 45." Read as a whole, section 7A confers a continuous protective jurisdiction extending from the period  before  the  commencement  of  arbitral  proceedings, throughout the arbitration, and continuing until the award is enforced. The reference to section 45 is particularly significant, for that provision deals exclusively with the recognition and enforcement  of  foreign  arbitral  awards.  Parliament  therefore expressly contemplated that interim protection may be required in Bangladesh even where the arbitration is seated abroad.
  2. The nature of the jurisdiction conferred by section 7A is equally significant. Unlike sections 12, 15 and 16 of the Act, which empower the Court to appoint, remove or substitute arbitrators and thereby exercise supervisory jurisdiction over the arbitral process, section 7A neither authorises the Court to regulate the conduct of arbitration nor to determine the merits of the dispute. Its function is purely ancillary and protective. It enables the Court to preserve the subject matter of the dispute, maintain the status quo, secure assets and prevent irreparable prejudice until the arbitral tribunal is constituted, or, if already constituted, is in a position to grant appropriate relief. In exercising jurisdiction under  section  7A,  the  Court  neither  supplants  the  arbitral tribunal  nor  assumes  control  over  the  arbitration;  it  merely safeguards the efficacy of the arbitral process.
  1. This  reflects  the  well-recognised  distinction  between supervisory  jurisdiction  and  supportive  jurisdiction  in modern  arbitration  law.  Supervisory  jurisdiction  concerns matters such as the constitution of the tribunal, challenges to its jurisdiction,  procedural  supervision  and  the  setting  aside  of awards, and ordinarily belongs to the courts of the juridical seat.  Supportive  jurisdiction,  by  contrast,  assists  the  arbitral process  by  preserving  assets,  maintaining  the  status  quo  or securing  evidence  without  interfering  with  the  tribunal's authority or adjudicating the parties' substantive rights. Section 7A embodies this latter jurisdiction. It is designed to ensure that the  arbitral  proceedings,  and  the  eventual  award,  are  not rendered ineffective by the dissipation of assets or alteration of the status quo.
  2. The  practical  purpose  of  section  7A  reinforces  this interpretation.  In  a  foreign-seated  arbitration,  the  need  for interim  protection  may  arise  before  the  arbitral  tribunal  is constituted, during the arbitral proceedings, or after the award has been rendered but before it is recognised and enforced in Bangladesh under section 45. During any of these stages, assets situated within Bangladesh may be dissipated or transferred, thereby  frustrating  the  enforcement  of  the  eventual  foreign award.  By  empowering  the  High  Court  Division  to  grant interim  measures  until  enforcement  under  section  45, Parliament  ensured  that  effective  judicial  assistance  remains available  throughout  the  life  cycle  of  the  arbitral  process without  conferring  supervisory  control  over  the  foreign arbitration itself.
  1. The Significance of the Preamble of the Act, 2001
  1. The object of section 7A becomes clearer when it is read in the light of the Preamble to the Arbitration Act, 2001. Unlike the repealed Arbitration Act, 1940, which was enacted merely to consolidate  and  amend  the  law  relating  to  arbitration  in Bangladesh, the 2001 Act has a much wider legislative purpose. Its Preamble states that the Act is intended to consolidate and amend the law relating to domestic arbitration, international commercial  arbitration,  the  recognition  and  enforcement  of foreign arbitral awards, and matters connected therewith. Thus, Parliament deliberately expanded the scope of the legislation beyond  domestic  arbitrations  to  embrace  international commercial arbitration and the enforcement of foreign awards. The  expression  "and  matters  connected  therewith"  further indicates that the Act was intended not only to regulate arbitral proceedings seated in Bangladesh but also to provide judicial assistance wherever necessary to ensure that arbitration remains an effective dispute resolution mechanism.
  1. This legislative shift is reflected in section 7A. Unlike the 1940 Act, which was based upon extensive judicial supervision of arbitration, the 2001 Act adopts the modern approach of limited judicial intervention coupled with judicial support. Section 7A does  not  confer  supervisory  jurisdiction  over  the  arbitral proceedings. Its purpose is to enable the Court to preserve the subject matter of the dispute, protect the rights of the parties and ensure that the arbitral process is not rendered ineffective before the tribunal can act or before the award is enforced. Interpreting  section  7A  as  a  provision  intended  to  support, rather than supervise, arbitration is therefore consistent not only with the language of the section itself but also with the broader legislative objective reflected in the Preamble of the Arbitration Act, 2001.
  1. Whether Section 3 Excludes the Operation of Section 7A
  1. The principal question is whether section 3 of the Arbitration Act,  2001  excludes  the  operation  of  section  7A  where  the juridical seat of arbitration is outside Bangladesh. Section 3 undoubtedly prescribes the general territorial application of the Act by providing that it applies where the place of arbitration is in  Bangladesh,  subject  to  the  exceptions  contained  in  sub- section (2). However, section 3 cannot be construed in isolation. It must be read harmoniously with the substantive provisions of the Act so that each provision is given its intended operation. It is a settled principle of statutory interpretation that a general provision should not be construed so as to defeat or render ineffective  a  later  and  more  specific  provision  enacted  by Parliament.
  1. Properly construed, section 3 does not itself confer or withdraw judicial jurisdiction. Rather, it defines the territorial reach of the Act. The Court's jurisdiction is conferred by the substantive provisions of the Act, including sections 7A, 10, 12, 15, 16, 42, 45 and 46. The question, therefore, is not what section 3 says in isolation, but how it is to be reconciled with the specific jurisdiction created by section 7A.
  2. If section 3 were interpreted as absolutely excluding the operation of section 7A whenever the arbitration is seated outside Bangladesh, the express words employed by Parliament in section 7A—"ধারা৪৪বা৪৫এরঅধীনসালিসীররারেদাদকার্ যকরনাহওো঩র্ "যন্ত ("until enforcement of the award under section 44 or 45")— would be deprived of any practical effect. Section 45 deals exclusively with the recognition and enforcement of foreign arbitral awards. Parliament could not have expressly referred to section 45 if it intended section 7A to remain wholly inapplicable throughout the life of a foreign-seated arbitration. Such a construction would render the reference to section 45 largely redundant, contrary to the settled principle that every word employed by Parliament must, so far as possible, be given meaning and effect.
  3. In the respectful view of this Court, the more harmonious reconciliation of the two provisions is that section 3 lays down the general territorial application of the Act, whereas section 7A creates a limited and independent protective jurisdiction of the High Court Division. That jurisdiction extends to three stages of the arbitral process, namely: (i) before the commencement of arbitral proceedings; (ii) during the pendency of the arbitral proceedings; and (iii) after the award has been made until its enforcement, including the enforcement of a foreign arbitral award under section 45. In exercising jurisdiction under section 7A, the High Court Division neither supervises nor interferes with the foreign arbitral proceedings. Its role is confined to preserving the subject matter of the dispute and maintaining the efficacy of the arbitral process so that the eventual award is not rendered nugatory by the dissipation of assets or alteration of the status quo.
  1. This interpretation is reinforced by the nature of the jurisdiction conferred under different provisions of the Act. Supervisory jurisdiction under sections 12, 15 and 16 naturally follows the juridical  seat  because  those  provisions  regulate  the  arbitral process itself. Enforcement jurisdiction under sections 42 to 46 depends upon whether the award is domestic or foreign. Section 7A,  however,  serves  a  fundamentally  different  legislative purpose.  It  confers  a  supportive  jurisdiction  designed  to preserve  property  or  rights  within  Bangladesh  so  that  the arbitral proceedings, wherever seated, are not frustrated. The location of  the  arbitration  determines  supervisory  control; it does not necessarily preclude judicial assistance directed solely towards preserving the efficacy of the arbitral process.
  1. Legislative Intent and Harmonious Construction of the Act
  1. Having  considered  the  rival  submissions  and  the  authorities cited at the parties, this Court is of the view that the controversy cannot be resolved by reading section 3 in isolation. The Act, 2001 must be construed as a coherent and integrated legislative scheme in which every provision is given its proper meaning and effect. It is a settled principle of statutory interpretation that a statute should be read as a whole and that no provision should be  construed  in  a  manner  that  renders  another  provision redundant, ineffective or devoid of practical operation.
  1. The legislative object of the Act is reflected in its Preamble, which declares that it was enacted to consolidate and amend the law relating to domestic arbitration, international commercial arbitration, the recognition and enforcement of foreign arbitral awards and matters connected therewith. Unlike the repealed Arbitration Act, 1940, the 2001 Act was designed to regulate not merely domestic arbitration but the broader framework of international  commercial  arbitration.  Although  the  Preamble cannot control the plain words of the statute, it remains an important  aid  in  ascertaining  legislative  intent  where  two constructions are reasonably possible.
  2. The legislative history of section 7A reinforces that purpose. The Arbitration Act, 2001, as originally enacted, contained no provision  empowering  the  Court  to  grant  interim  measures. Parliament  consciously  introduced  section  7A  by  the Amendment Act of 2004, thereby conferring upon the High Court Division a limited jurisdiction to preserve the subject matter of arbitration before the commencement of proceedings, during their continuance and until enforcement of the award. The evident object of the amendment was to ensure that arbitral proceedings are not frustrated by the dissipation of assets or alteration  of  the  status  quo  before  effective  relief  becomes available.
  1. The language employed in section 7A is itself a compelling indicator of that legislative intent. Parliament authorised the High  Court  Division  to  grant  interim  measures  "before  or during continuance of the proceedings or until enforcement of the award under section 44 or 45." The express reference to section 45 is of particular significance because that provision deals  exclusively  with  the  recognition  and  enforcement  of foreign arbitral awards. If section 7A were wholly inapplicable whenever  the  arbitration  is  seated  outside  Bangladesh, Parliament's specific reference to section 45 would serve little practical purpose. Such a construction would offend the settled principle that every word employed by the legislature must, so far as possible, be given meaning and effect.
  2. The structure of the Act further demonstrates that Parliament has deliberately conferred different kinds of jurisdiction upon the  Court.  Sections  12,  15  and  16  confer  supervisory jurisdiction over the arbitral process itself. Sections 42 to 46 regulate  the  recognition,  enforcement  and  setting  aside  of arbitral awards. Section 7A, however, performs an altogether different function. It neither regulates the conduct of arbitration nor determines the merits of the dispute. Its purpose is confined to preserving assets, maintaining the status quo and protecting the  efficacy  of  arbitration  until  the  arbitral  tribunal  or  the enforcing court is able to grant effective relief.
  1. Once  this  distinction  between  supervisory  jurisdiction  and supportive jurisdiction is appreciated, the relationship between sections 3 and 7A becomes considerably clearer. Section 3 lays down the general territorial application of the Act. It does not, by  itself,  create  or  extinguish  the  substantive  jurisdictions conferred  elsewhere  in  the  statute.  Whether  a  particular provision is governed by the territorial limitation in section 3 necessarily  depends  upon  the  nature  and  purpose  of  the jurisdiction  created  by  that  provision.  Supervisory  powers ordinarily  follow  the  juridical  seat;  supportive  jurisdiction, however, may legitimately operate upon persons or property situated within Bangladesh without interfering with the foreign arbitral process.
  2. This  construction  accords  with  the  practical  realities  of international  commercial  arbitration.  Commercial  disputes frequently involve assets situated in jurisdictions other than the agreed arbitral seat. Unless the courts of the jurisdiction where those assets are located are able to grant temporary protective measures,  the  eventual  award  may  become  incapable  of effective enforcement. An order under section 7A operates only upon  persons  or  property  within  Bangladesh.  It  neither regulates the foreign arbitration, nor intrudes upon the tribunal's authority, nor determines any issue on the merits. It merely preserves the status quo until the arbitral tribunal is able to exercise its own jurisdiction or the award is enforced.
  3. Accordingly, a harmonious construction of sections 3, 7A and 45 leads to the conclusion that section 3 defines the general territorial application of the Act, whereas section 7A creates a limited, ancillary and protective jurisdiction enabling the High Court Division to preserve the subject matter of the dispute until the arbitral award, including a foreign award enforceable under section 45, is recognised and enforced in Bangladesh. Such  an  interpretation  gives  meaningful  effect  to  every provision of the Act, advances the legislative object underlying the  2001 Act  and  preserves  the  distinction  between  judicial assistance and supervisory jurisdiction recognised in modern international arbitration law.
  1. The View in Accom and Its Restrictive Construction
  1. Following Unicol, the jurisprudence of the High Court Division evolved along two distinct lines. One line of authority adopted a restrictive interpretation of the Arbitration Act, 2001 by treating Unicol  as  conclusively  limiting  the  jurisdiction  of  the Bangladeshi courts in respect of foreign-seated arbitrations. In Uzbekistan  Airways,  the  High  Court  Division,  relying principally on Unicol, held that section 10 of the Act, 2001 was inapplicable  where  the  seat  of  arbitration  lay  outside Bangladesh.  The  majority  decision  in  Accom  substantially followed the same approach. With profound respect, however, the majority appears to have accorded overriding significance to the  territorial  provision  contained  in  section  3  of  the  Act without undertaking a separate examination of the language, purpose and legislative scheme of section 7A. The jurisdiction conferred  by  section  7A  is  neither  supervisory  nor interventionist. It does not regulate the conduct of the arbitral proceedings  or  interfere  with  the  authority  of  the  arbitral tribunal. Rather, it confers a limited and ancillary jurisdiction upon the High Court Division to preserve the subject matter of

the dispute so that the arbitral process and any eventual award are  not  rendered  ineffective.  Such  protective  jurisdiction  is conceptually  distinct  from  the  supervisory  jurisdiction exercised by the courts of the arbitral seat.

  1. Effect of the Overlooked Binding Decision
  1. The Larger Bench in Accom Travels and Tours v. Oman Air SAOC, by a majority of 2:1, held that sections 7, 7A and 10 of the Arbitration Act,  2001  are  inapplicable  to  foreign-seated arbitrations, except that interim measures under section 7A may be granted at the stage of enforcement of a foreign arbitral award.  In  arriving  at  that  conclusion,  the  majority  relied principally  upon  Uzbekistan  Airways,  10  BLC  614,  Civil Petition No. 1112 of 2005 and, ultimately, Unicol Bangladesh Ltd. v. Maxwell Engineering Works Ltd., 56 DLR (AD) 166. However, the majority neither referred to nor considered the earlier binding decision of the Appellate Division in Mosharaf Composite  Textile  Mills  Ltd.  v.  ECOM Agroindustrial  Corp. Ltd.,  reported  in  4  SCOB  (2015)  AD  28.  In  ECOM,  by judgment dated 20.06.2015, the Appellate Division affirmed the stay of a suit instituted in Bangladesh so as to enable arbitration already pending in Liverpool to proceed in accordance with the parties' arbitration agreement.
  2. The legal position was clarified even further when the Appellate Division, in ECOM, while dismissing Civil Review Petition No.  213  of  2015  by  judgment  dated  11.07.2017,  expressly considered Unicol Bangladesh and observed:

"The learned counsel has referred to a decision of this Court in Unicol Bangladesh Blocks Thirteen Vs Maxwell Engineering Works Ltd., 56 DLR (AD) 166 and submits that in that case similar question arose. … This Court did not deal with section 34 of the Arbitration Act, 1940, which is not in resemblance with section 10 of the present Ain. Moreover, this Court by a four-member Bench has maintained  the  judgment  of  the  High  Court  Division staying  the  further  proceedings  of  the  suit  on  the reasoning  that  the  parties  should  proceed  with  the arbitration proceedings. In view of the above, this Court has pro tanto overruled Unicol Bangladesh."

[Emphasis supplied by this Court]

  1. The expression "pro tanto overruled" signifies that an earlier decision is overruled only to the extent that it is inconsistent with  the  later  decision  and  not  in  its  entirety.  Thus,  by  its review judgment in ECOM, the Appellate Division expressly displaced  that  part  of  Unicol  Bangladesh  Ltd.  v.  Maxwell Engineering Works Ltd., 56 DLR (AD) 166, which held that section 10 of the Arbitration Act, 2001 was inapplicable to foreign-seated arbitrations. The remaining principles laid down in  Unicol, insofar as they are not inconsistent with  ECOM, continue to retain their precedential value.
  2. The  significance  of  this  development  cannot  be  overstated. When  the  Larger  Bench  rendered  its  decision  in  Accom  on 12.12.2021,  Unicol  had  already  ceased,  for  more  than  four years,  to  be good law  on the  applicability  of section 10  to foreign-seated arbitrations. Notwithstanding that position, the majority  substantially  founded  its  reasoning  upon  Unicol without noticing either the Appellate Division's judgment in ECOM or its subsequent review judgment expressly holding that  Unicol  stood  pro  tanto  overruled.  Once  the  very proposition  of  law  for  which  Unicol  was  relied  upon  had already  been  authoritatively  displaced  by  the  Appellate Division, its continued reliance as the principal foundation for interpreting section 10 became open to serious doubt. To that extent,  the  jurisprudential  foundation  of  the  majority's reasoning in Accom in relation to section 10 stood materially weakened.
  1. The ratio of  ECOM is clear and unequivocal. The Appellate Division upheld the application of section 10 of the Arbitration Act, 2001 to stay a suit instituted in Bangladesh in deference to arbitration proceedings already pending in Liverpool. In doing so, it did not treat the foreign set of arbitration as a bar to the exercise  of  judicial  assistance  under  section  10.  Nor  did  it consider section 3 or any other provision of the Arbitration Act as restricting the operation of section 10 merely because the arbitration  was  seated  outside  Bangladesh.  The  decision therefore necessarily rejects the proposition that section 10 is confined exclusively to domestic arbitrations.
  2. The  binding  force  of  ECOM  is  beyond  controversy.  As observed  by  Mahmudul  Islam  in  Constitutional  Law  of Bangladesh, a decision of the Appellate Division is binding under Article 111 of the Constitution when it "(a) decides a question  of  law,  (b)  is  based  on  a  principle  of  law,  or  (c) enunciates a principle of law." The interpretation placed by the Appellate Division upon section 10 in  ECOM is therefore a declaration  of  law  binding  upon  all  subordinate  courts. Consequently, Unicol can no longer be cited as authority for the proposition  that  section  10  is  inapplicable  to  foreign-seated arbitrations.
  1. However,  the  omission  to  consider  ECOM  is  significant because  the  majority  judgment  in  Accom  was  founded substantially on Unicol Bangladesh, 56 DLR (AD) 166. The Larger Bench held that sections 7, 7A and 10 of the Arbitration Act, 2001 do not apply to foreign-seated arbitrations on the basis that section 3 confines the operation of Part I of the Act to arbitrations  seated  in  Bangladesh.  But  before  Accom  was decided, the Appellate Division in ECOM had already upheld the application of section 10 to stay a suit in Bangladesh in favour of arbitration proceedings pending in Liverpool. This clearly shows that the existence of a foreign seat does not, by itself,  exclude  all  forms  of  judicial  intervention  under  the Arbitration Act.
  2. The  decisions  in  ECOM  therefore  represent  an  important development in the law. They demonstrate that the Arbitration Act,  2001  does  not  invariably  make  every  form  of  judicial intervention  dependent  on  the  juridical  seat  of  arbitration. Rather, they recognise that there is a distinction between the Court's supervisory jurisdiction over the arbitral process and its power to provide judicial assistance in support of arbitration. That distinction is directly relevant to the proper interpretation of section 7A. For this reason, the reasoning adopted in Accom deserves reconsideration by a court of competent jurisdiction in an appropriate case.

VIII. Applicability of Section 151 CPC in Place of Section 10

  1. Another  aspect  of  the  majority  decision  in  Accom  which requires careful consideration is its conclusion that, although sections  7,  7A  and  10  of  the  Act,  2001  were  held  to  be inapplicable  to  foreign-seated  arbitrations,  the  Court  could nevertheless stay the suit by invoking its inherent jurisdiction under section 151 CPC and refer the parties to arbitration in accordance with their arbitration agreement.
  2. With  profound  respect,  the  majority  reasoning  in  Accom appears to contain an inherent inconsistency. Having held that section 10, the special statutory provision governing the stay of judicial proceedings in favour of arbitration, is inapplicable to foreign-seated arbitrations, the majority nevertheless held that substantially the same relief could be granted by invoking the Court's  inherent  jurisdiction  under  section  151  CPC.  Thus, while denying the applicability of section 10 to stay a suit in Bangladesh in aid of a foreign-seated arbitration, the judgment permitted the Court to achieve the very same result through its inherent powers. If Parliament, as understood in Accom, did not intend section 10 to apply to foreign-seated arbitrations, it is difficult  to  appreciate  how  the  identical  relief  could nevertheless  be  granted  under  the  general  provisions  of  the CPC.
  1. Such an approach raises a fundamental question of statutory interpretation.  It  is  well  settled  that  where  Parliament  has enacted  a  special  statute  governing  a  particular  subject,  the rights and remedies of the parties are to be determined within the  framework  of  that  statute.  The  inherent  jurisdiction preserved by section 151 CPC is intended to supplement the law where no specific provision exists; it cannot ordinarily be invoked to circumvent, enlarge or achieve indirectly what the special  statute  is  taken  to prohibit  directly.  If  the  territorial limitation  contained  in  section  3  excludes  the  operation  of section 10, there appears to be no principled basis for avoiding that limitation by resorting to section 151. Conversely, if a suit may lawfully be stayed under section 151 in aid of a foreign- seated arbitration, it becomes difficult to explain why the same relief  cannot  be  granted  under  section  10  itself,  the  very provision enacted by Parliament for that purpose.
  2. The pronouncements of the Appellate Division in ECOM has recognised  the  applicability  of  section  10  to  foreign-seated arbitrations  and  has  held  that  Unicol  stands  pro  tanto overruled. In that light, the necessity of resorting to section 151 disappears altogether. Where Parliament has provided a specific statutory  mechanism,  recourse  to  the  Court's  inherent jurisdiction should ordinarily be unnecessary. For these reasons, this Court is of the respectful view that the reliance placed in Accom upon section 151 introduces a doctrinal tension into its reasoning which, in the interests of coherence and certainty in the law, may merit authoritative reconsideration by a higher forum.

IX. Recent Development in the Italian-ThaiCase

  1. Moreover, recent development in the Italian-Thai case (Civil Petition for Leave to Appeal No. 1828 of 2024, judgment dated 01.09.2024) is also of considerable significance. Following the decision in Accom, the High Court Division dismissed another application under section 7A on the ground that the provision was inapplicable to a foreign-seated arbitration. However, when the matter came before the Appellate Division by way of Civil Petition for Leave to Appeal, the Appellate Division continued interim protection until the first session of the arbitral tribunal in Singapore. In this case, although our Appellate Division did not finally determine the scope of section 7A, nonetheless the petition was not dismissed on the basis that the High Court Division  had  correctly  interpreted  section  7A.  Finally,  it disposed of the matter as having become infructuous after the arbitral tribunal in Singapore had assumed jurisdiction in terms of  section  7A(6).  The  Appellate  Division  thus  consciously refrained from expressing any opinion on the correctness of the interpretation  adopted  by  the  High  Court  Division. Consequently, the question whether section 7A is available in aid of a foreign-seated arbitration remains open and has yet to be authoritatively determined by a reasoned pronouncement of the Appellate Division.

This Court's Respectful View

  1. With the utmost respect to the majority decision in Accom, this Court finds itself, with great humility, unable to subscribe to the reasoning adopted therein. This court is of the consideredview that sections 7, 7A and 10 of the Arbitration Act, 2001 are capable  of  operating  in  aid  of  arbitral  proceedings  even where  the  juridical  seat  of  arbitration  is  outside Bangladesh.  Those  provisions,  properly  construed,  are intended  to  facilitate  and  support  the  arbitral  process  by conferring limited judicial assistance, rather than to exercise supervisory  jurisdiction  over  the  arbitral  proceedings themselves.
  1. Viewed from that perspective, the invocation of section 151 CPC, as in Accom, in lieu of section 10 of the Arbitration Act, 2001  appears,  with  respect,  to  be  neither  necessary  nor warranted. Where Parliament has provided a specific statutory mechanism  under  section  10  for  the  grant  of  the  relief  in question, recourse to the Court's inherent jurisdiction would ordinarily be inappropriate.

Binding Effect of the Larger Bench Decision

  1. The  foregoing  discussion  demonstrates  that  substantial questions  have  arisen  regarding  the  proper  interpretation  of sections 3, 7A and 10 of the Arbitration Act, 2001, particularly in light of the subsequent decisions of the Appellate Division in the  ECOM  cases  and  the  judicial  approach  reflected  in  the Italian-Thai matter. Those authorities appear to recognise that supportive  judicial  intervention  in  aid  of  arbitration  is conceptually distinct from supervisory jurisdiction over arbitral proceedings and later enforcement and that such intervention may, in appropriate circumstances, coexist with the principle that supervisory jurisdiction ordinarily follows the arbitral seat.
  1. This Court has also found considerable force in the petitioner's submission  that  section  7A  creates  a  limited  protective jurisdiction  directed  towards  preserving  the  efficacy  of arbitration  and  not  towards  supervising  the  arbitral  process. Equally persuasive is the submission that a harmonious reading of the Arbitration Act, 2001, viewed in the light of its legislative history, Preamble and statutory scheme, may reasonably admit of an interpretation whereby interim measures under section 7A are available in aid of foreign-seated arbitrations in respect of persons or property situated within Bangladesh.

The Decision and Order

  1. However, the fact that Accom did not consider ECOM does not authorise this  Court  to  disregard  the  decision of  the  Larger Bench. The doctrine of precedent is founded not only upon the correctness of legal reasoning but also upon the necessity of maintaining certainty, consistency and institutional discipline in the  administration  of  justice. Although  this  Court  has,  with utmost  respect,  expressed  its  reservations  regarding  certain aspects of the reasoning adopted by the majority in Accom, it is not open to a Single Bench to disregard or decline to follow a binding decision of a Larger Bench of the High Court Division on that ground alone. Whether Accom continues to represent the correct interpretation of sections 7A and 10, is a matter which can  be  authoritatively  reconsidered  only  by  the  Appellate Division or by a Bench of co-equal or larger strength.
  1. Accordingly,  in  faithful  observance  of  the  doctrine  of  stare decisis  and  the  settled  principles  of  judicial  discipline governing  Benches  of  coordinate  jurisdiction,  this  Court remains bound by the majority decision in Accom Travels and Tours v. Oman Air SAOC. Since the arbitration agreement in the present  case  designates  Singapore  as  the  juridical  seat  of arbitration, the binding ratio laid down in Accom precludes the exercise of jurisdiction under section 7A of the Act, 2001.
  2. Consequently, the present application is not maintainable and is rejected  in  limine,  without  entering  into  the  merits  of  the controversy and without prejudice to the petitioner's right to pursue any remedy that may be available before the competent arbitral tribunal or any other forum in accordance with law.

(Justice Md. Toufiq Inam)

Ashraf/ABO.