Bangladesh

In situations, things may be quite straightforward, at least the parties in an arbitral proceeding may believe such.As a result, parties to arbitration, at times, consider the goodness of the decision of continuing with the proceedings in full. Rather, they look for a summary proceeding whether the apparent and undisputed questions of laws or facts or even sometimes mixed questions of law & facts may get resolved quickly. Dispositive motions come into the scene with this paradigm. In short, a dispositive motion is brought before an arbitral tribunal whenever one of the parties decides to proceed for a summary award of the arbitration requesting the tribunal to assess the strength of the contentions of its side.[1] It’s has similarities to the summary judgment proceedings of the civil courts, however, there may be some areas to develop in respect of the application of the test applicable in arbitral proceedings, if at all. However, there is no denial that dispositive motions are becoming increasingly common in arbitrations, specially, in a more complex one. Dispositive motions are prayers for summary proceedings of the arbitration. In case a dispositive motion is granted by the arbitral tribunal, the opportunity of the parties to be heard of the subject matter of the motion is compromised. The subject matter of the dispositive motion may be a legal issue, or a factual one or even the merit of the arbitration. Dispositive motions, if granted, lead the arbitrator to decide on the issue on the basis of no hearing or a short hearing.[2] Though is a settled principle even in arbitration that each party has a right to be heard and should be given a fair opportunity to present its case[3], a summary proceeding before an arbitral tribunal granted on the basis of a dispositive motion cannot really be considered as a denial of this right of fair hearing. The right to be heard does not necessary mean the right to a complete hearing before the court, even the opportunity of a summary hearing on an issue may fulfill the requirement of the right to be heard. In case of both institutionalized or ad-hoc arbitrations, the rule administering the arbitration may contain provision regarding dispositive motions.[4] In case the rules according to which the arbitration is administered contains a provision regarding the time frame of a motion for disposition, that time frame will be followed. The rule may even contain instructions regarding the dispositive motion. In case the rule does not contain any such provision, general instructions regarding dispositive motion including a deadline may be set by the tribunal during the preliminary hearing. In the procedural order containing instructions regarding dispositive motions, the arbitrators may think of setting an early deadline for filling this motion so that the final merit hearing of the arbitration does not get delayed. However, it is an ongoing trend that the parties to an arbitral agreement frequently include more flexible arbitration clauses in an effort to obtain a cheaper, more expeditious form of dispute resolution than resort to the courtroom.[5] In such situations, parties even tend to include more detail provisions in the arbitral agreements regarding the dispositive motions. Footnotes [1]             See, James Lyons, Arbitration: The Slower, More Expensive Alternative? Am. Law., Jan.-Feb. 1985, at 107; see also Thomas Stipanowich, Rethinking American Arbitration, 63 Ind. L. J. 425, 452-76 (1988) (observing that many surveyed respondents disagreed that arbitration was faster and cheaper than litigation). [2]             See, D. Brian King and Jeffery P. Commission, Summary Judgment in International Arbitration: The “Nay” Case, ABA International Law Spring 2010 Meeting, at 1 (Spring 2010) [3]             American Arbitration Association (AAA) Commercial Arbitration Rules, Rule 30 [4]             For example, See, CAFTA-DR, Article 10.20 (“Without prejudice to a tribunal’s authority to address other objections as a preliminary question, a tribunal shall address and decide as a preliminary question any objection by the respondent that, as a matter of law, a claim submitted is not a claim for which an award in favor of the claimant may be made under Article 10.26.”), available at: http://www.ustr.gov/trade-agreements/free-trade- agreements/cafta-dr-dominican-republic-central-america-fta/final-text. See also, U.S. Model Bilateral Investment Treaty, Article 28 (contains identical language than CAFTA Article 10.20), available at: http://www.state.gov/e/eeb/ifd/bit/index.htm [5]             See Generally, Alfred G. Ferris and Biddle W. Lee, The Use of Dispositive Motions in Arbitration, 62 Disp. Resol. J. 17, 24 (1 August 2007)

Foreign investors are free to make investment in Bangladesh in the industrial enterprises excepting a few reserved sectors as mentioned in the “Industrial Policy” of the government in force.An industrial enterprise in Bangladesh can be in collaboration with local investors or may even be wholly owned by the foreign investors. There are several government/autonomous bodies from which variety of license/permission/clearance would be required for investing in Bangladesh. The followings are the relevant legal requirements:   Sl# Name of the License/permit Issuing Authority Documents/Conditions for getting the license/permit or pre-requisites in getting the license/permits Applicable Law Required time      & Renewal process 1 Name Clearance Certificate RJSC ·     Application through online after opening an E-account on RJSC Website. ·     Payment of fees after preliminary name search Companies Act 1994 01-02 working day   Not required 2 Incorporation of 100% foreign company RJSC ·     Name Clearance Certificate issued by RJSC ·     Filled-in Form – XXXVI: Documents (Memorandum of Association and Articles of Association) ·     Filled-in Form VI Notice of the address of the registered or principal office of the Company. ·     Filled-in Form IX Director’s Consent ·     Passport size photo of shareholders & Directors ·     Photo ID and Passport Info page of Shareholder and Directors ·     Foreign Currency Encashment Certificate from a schedule Bank [transfer of paid up capital] ·     Treasury Challan [Government Fees] ·     Permission from BIDA Companies Act 1994  07-15 working days   Not required. Automatically renewed with filing of returns. 3. Tax Identification Number National Board of Revenue ·     A mobile phone number ·     Incorporation number of the company ·     Date of incorporation of the company ·     Name of the authorized person Income Tax Ordinance 1984 15-20 minutes   Not required. 4. Trade License for manufacturing firms Dhaka North/South City Corporation ·     Application form ·     National ID Card ·     Rent receipt or ownership proof ·     Holding tax payment receipt ·     Passport size photograph of the entrepreneur ·     Declaration on non-judicial stamp to abide by the rules & regulation of city corporation/municipality/union parishad ·     NOC declaration from the locality ·     Location map ·     Sketch along with details of the proposed factory/surrounding of the factory ·     Fire License ·     Environment clearance License Memorandum f Association and Articles of Association ·     Certificate of incorporation ·     Work permit from BIDA ·     Statement of Bank Solvency ·     TIN Certificate Dhaka City Corporation Ordinance 1983 Municipal Taxation Rules 1986 10-20 working days     Yearly renewal required 5. BIDA Registration of Foreign Investment Project Bangladesh Investment Development Authority (BIDA) ·     Forwarding letter to be submitted by the Managing Director of the Company in official letter head. ·     Two copies of Application in the Prescribed Form duly filled in ·     Certificate of Incorporation ·     Trade License in favour of factory address ·     TIN Certificate ·     List of machineries local and imported to be submitted in official pad of the company (SL no., name of Machine, H.S. Code, quantity and value in Million Taka) ·     Encashment Certificate ·     NOC from concerned Ministry ·     Pay order for applicable registration fee BIDA Act 2016 Guideline 2011 2-4 working days   Not required 6. IRC Office of Chief Controller of Imports & Exports (CCI&E) ·     Passport  size photograph of the Applicant ·     Trade License ·     Membership Certificate from a local Chamber of Commerce and Industry or from concerned Trade Associations ·     Financial solvency certificate ·     Citizenship Certificate ·     Treasury Challan ·     TIN Certificate ·     Partnership Deed ·     Certificate of Incorporation, Memorandum and Articles of Association Import Policy Order 2015-2018  02-05 working days 7. VAT Registration National Board of Revenue ·     Trade License ·     TIN Certificate ·     IRC ·     List of sales shops, sales centers, full address, equipment, machinery, fittings, product features and amendment of the products manufactured ·     List of invoice and stored product ·     Deed of Agreement ·     Bank Solvency Certificate ·     BIDA Registration ·     Memorandum of Association and Articles of Association VAT and Supplementary Duty Act 2012  2-4 working days   Not required 8. Approval of remittance  BIDA ·     BIDA Registration ·     Technology transfer Agreement ·     Application Form ·     Resolution of Board of Directors ·     Income Tax Certificate and Return ·     Memorandum of Association and Articles of Association ·     Invoices ·     Authenticated banking documents showing export earning, if any ·     Patent right/trade mark/brand name registration in Bangladesh ·     Work completion certificate     9. Environment License Department of Environment ·     Application through prescribed form-3 under Environment Conservation Rules 1997. ·     Prescribed fees under schedule-13 under Environment Conservation Rules 1997 (Amended 2002) ·     Report on the feasibility of the industrial unit or project (applicable only for proposed industrial unit or project); ·     Report on the Initial Environmental Examination (IEE) relating to the industrial unit or project, and also the terms of reference (ToR) for the Environmental Impact Assessment (EIA) of the unit or the project and its Process Flow Diagram; or Environmental Impact Assessment (EIA) report prepared on the basis of terms of reference previously approved by the Department of Environment, along with the Layout Plan (showing location of Effluent Treatment Plant), Process Flow Diagram, design and time schedule of the Effluent Treatment Plant of the unit or project, (these are applicable only for a proposed industrial unit or project); ·     Report on the Environmental Management Plan (EMP) for the industrial unit or project, and also the Process Flow Diagram, Layout Plan (showing location of Effluent Treatment Plant), design and information about the effectiveness of the Effluent Treatment Plan of the unit or project (these are applicable only for an existing industrial unit or project); ·     No objection certificate (Prescribed Form) of the local authority ·     Emergency plan relating adverse environmental impact and plan for mitigation of the effect of pollution ·     Outline of relocation, rehabilitation plan (where applicable) ·     Other necessary information (where applicable). Environment Conservation Rules 1997 (Amended 2002)  30 working days.   Yearly renewal 10. Approval of Layout plan and registration / license for factories and establishment Department of Inspection of Factories and Establishments (DIFE) ·     Land documents, if rental, rent receipt and agreement is required. If owned, tax receipt is required ·     Site plan/layout master plan ·     Detailed construction plan ·     Machine layout and flow chart of manufacturing process As per ILO Convention Maximum 2 months.   Yearly renewal required 11. Fire License Fire Service and Civil Defence ·     Filled in prescribed Application Form. Application form can be collected either from office of Fire Service and Civil Defence or from internet. ·     Trade License ·     Description of the products including their quantity. ·     Annual value of the warehouse (determined by the City Corporation/ Municipality/Union Parishad). ·     2 copies of layout plan of the Fire Prevention and Fire Fighting system. ·     No-Objection-Certificate from local (elected) representative ·     Certificate of Incorporation and Memorandum of Association and Articles of Association of the Company. ·     Name address of the Directors of the Company.    120 working days   Yearly renewal required 12. Membership of Chambers/trade body?  Dhaka Chamber of Commerce and Industries ·     Trade License ·     TIN ·     Bank Certificate ·     Memorandum of Association and Articles of Association. ·     Certificate of Incorporation ·     Photograph of the applicant ·     Visiting card of the applicant ·     National ID / Passport ·     IRC ·     VAT ·     BIDA Certificate ·     Work Permit ·     Bank pay order The Trade Organization Ordinance  1961  1-3 working days.   Yearly Renewal 13 PI/E VISA for Foreign Investors/ Employee respectively BIDA and concerned Bangladesh Embassy/High Commission ·     BIDA Registration Number ·     Memorandum and Articles of Association and Certificate of Incorporation ·     Board Resolution ·     Photograph of the Investor ·     Copy of Passport (whole of the each part, each of the pages chronologically) ·     Specific activity of the company ·     Income Tax Clearance certificate of the Company ·     Encashment certificate of inward remittance of minimum US$ 5,0000.00 as initial establishment cost for branch/ liaison/ joint-venture and 100% foreign ownership company incorporation in Bangladesh BIDA Act 2006 Guideline 2011.   After obtaining recommendation letter the Investor may apply for PI Visa. It may take 3 working days to get recommendation letter.   7 working days to obtain visa   1 + 2 + 2 years in phases for PI Visa   1 year for E Visa 14 Work Permit BIDA ·     Copy of Memorandum & Articles of Association and Certificate of Incorporation of the company duly signed by the shareholders in case of locally incorporated.   ·     Board resolution regarding employment of foreign national(s) including honorarium & other benefit to be provided. ·     Copy of passport (whole Used part)with arrival stamp, E-type visa for employees and PI-type visa for investors each of the pages chronologically ·     Service contract/ agreement and appointment letter/ transfer order in case of employee ·     Copies of all academic qualification & professional experience certificate for the employee ·     Statement of the manpower showing list of local & expatriate personnel employed with designation, salary break-up, nationality and date of first appointment ·     Up-to-date income tax clearance certificate of the company ·     Encashment certificate of inward remittance of minimum US$ 5,0000.00 as initial establishment cost for branch/ liaison/ joint-venture and 100% foreign ownership company incorporation in Bangladesh ·     Visa Recommendation Letter of the Investors/Employee. ·     Attachment of company's comments as per remarks (if any) BIDA Act 2006 Guideline 2011. 3-5 working days     1 + 2 + 2 years in phases for PI Visa   1 year for E Visa 15. Remittance of dividend to non-resident shareholders Bangladesh Bank ·     The Ads are allowed to remit dividends (both final and interim) to the non-resident shareholders on receipt of the application in the prescribed form (Appendix 5/75) in triplicate from the companies concerned duly certified by their Auditors and supported by the following document: ·     Attested copy of the certificate of incorporation of the company (to be   submitted only once). ·     Audited Balance Sheet and Profit & Loss Account of the Company for the year to which the dividend relates. ·     Copy, certified by the Auditor, of the Board resolution declaring the dividend. ·     List of non-resident shareholders to whom dividend is payable. ·     Certificate from the Auditor of the company to the effect that the taxes payable by the nonresident shareholder on account of the dividend earned has been deducted. ·     Auditor's certificate to the effect that the provision for income tax and/or any additional liability (such as surcharge etc.) in connection with such taxes made in the accounts of the company is sufficient to meet all past and present tax liabilities of the company in Bangladesh upto the period for which remittance of dividend is applied for i.e. the provision should cover not only current year but also the previous years for which taxes have not yet been finally assessed and paid. ·     Final income tax assessment order as and when obtained. ·     Undertaking to the effect that in case of remittance of any ineligible amount, the amount so remitted will be repatriated to Bangladesh on demand by Bangladesh Bank/the AD. Guidelines for Foreign Exchange Transactions         Renewal N/A   Author: SYED EMRAN HOSSAIN

As a corporate lawyer, I often advise my clients regarding various issues relating to commercial employment in the light of Bangladesh Labour Law. Most frequent queries are relating to the issues like “leave” and “service benefits”. In this Article, I will describe the types of leaves and other service benefits with all necessary details which are applicable under Bangladesh Labour Act 2006 read with Bangladesh Labour Rules 2015. There are 3 types of leaves which an employee/worker is entitled as per Bangladesh Labour Act (hereinafter BLA) 2006. They are namely (i) casual leave, (ii) sick leave and (iii) annual Leave. As per Section 115 of BLA 2006 every worker shall be entitled to casual leave for 10 days with full wages in a calendar year. Such leave shall not be accumulated and carried forward to the succeeding year. As per Section 116 of BLA 2006, except a newspaper worker, every worker shall be entitled to sick leave with full wages for 14 days in a calendar year. Such leave shall not be accumulated and carried forward to the succeeding year. As per Section 117 of BLA 2006 every adult worker who has completed 1 year of continuous service in an establishment shall be allowed, during the following period of 12 months, 1 day leave for every 11-22 days of work (depending on the nature of establishment). If a worker does not, in any period of 12 months, take the leave either in whole or in part, to which he is entitled to, such leave shall be added to the leave which he is entitled to in the succeeding 12 months. The total number can be up to maximum 60/80 days (depending on the nature of establishment). It is also pertinent to mention that if a worker/employee takes one day leave then only one day leave will be counted. Whether the one day leave has been availed on Sunday or Thursday is not relevant. However, if any holiday occurs into the annual leave granted shall be included in such leave. Apart from leaves, there are 2 types of holidays namely (i) weekly holidays and (ii) festive holidays. Labour Law mandates that every worker is entitled to one day holiday in a weak [Section 103]. In addition to that every worker shall be allowed in a calendar year 11 days of festival holiday with wages [Section 118]. Furthermore, there is a provision of maternity benefit for female workers under BLA 2006. Every woman worker, after completing six month tenure, shall be entitled to 16 weeks maternity benefit [Section 46]. The total leave period is to be 8 weeks preceding the expected date of delivery and 8 weeks immediately thereafter. This benefit applies with full payment as per the average of her daily income. This benefit will not be applicable if there are 2 or more surviving children. Now let me shed some light regarding encashment of un-availed leaves. A worker can only apply for encashment of his earned leave i.e. un-availed annual leave. Furthermore, only 50% (maximum) of the earned leave can be encashed and it can be encashed once in a year. If any annual leave is due to a worker and he has resigned or retrenched, discharged, dismissed, terminated or retired from his service, then he shall be entitled to receive wages in lieu of un-availed leave at the rate he is entitled to the payment of wages during the period of leave in accordance with the provisions of Bangladesh Labour Act. As per Act an employer must make payment for the un-availed leaves as aforesaid as per definition of wages. However, at the time of making payment deductions can be made in the following, inter alia, circumstances (i) fine imposed under Section 25, (ii) deduction for unauthorized leave, (iii) deduction for damage or loss of any goods under custody of the worker/ loss of money and (iv) deductions from wages for recovery of loans or advances. Now I would like discuss about few related benefits like (i) provident fund, (ii) gratuity and (iii) Workers Participation Fund (WPF). As per BLA 2006 private companies can set up provident fund for the benefit of the workers. The fund will be governed in the light of Section 264 of BLA 2006 and Provident Funds Act 1925. This is a directory provision. Furthermore, the definition of wages provided in Section 2(45) of BLA 2006 expressly excluded the provident fund. Therefore, it is explicit that the law does not make it compulsory for the employer to set up a provident fund. As per Section 2(10) of BLA 2006 gratuity is payable to a worker on termination of his employment provided he completed required tenure of service. The Act also provides that in certain situations, such as death, retrenchment, discharge or termination of employment, a worker is entitled to compensation or gratuity, whichever is higher.  Therefore, it is apparent that the employer must set up a gratuity fund for its employees. A worker may also be entitled to Workers Participation Fund (WPF), if applicable to the establishment. As per Section 232 of BLA 2006 the WPF shall apply to a company or establishment which fulfills any one of the following conditions, namely: (i) the amount of its paid-up capital on the last day of its accounting year is not less than taka 10 million; (ii) the value of its permanent assets on the last day of the accounting year is not less than taka twenty million. If any company matches the above two requirements then WPF will be applicable. Author: Syed Emran Hossain

Rahman & Rabbi Legal If we consider our present legal practice in Bangladesh, we will see lots of cases are pending before the courts. For this reason, it takes plenty of time to dispose a suit through the present judicial system. Unfortunately, parties who are now involved in this eccentric process of judicial system are completely frustrated for delay and lengthy proceedings. On the other hand, ADR process is advantageous and effective process than court system in the sense that it helps to save time of the parties and also reduce the cost and burden of the court proceedings. Moreover, the parties are at win-win position in the process of ADR and relation between the parties does not get worse. Hence, I believe that this global best practice has a future in our country. The primary obstacle we are facing now in our country is the lawyers’ attitude towards ADR. Lawyers believe that, in case the dispute between the parties resolved through ADR, they shall lose the opportunity to earn more money through congested court proceedings. Specific amount of money which lawyers are usually getting from the ADR process may not meet the demand of them. Consequently, it is also true that, the mediator or arbitrator may not know the applicable and related laws or having lack of adequate knowledge for which the parties sometimes cannot put their faith upon the mediator or arbitrator. Another issue which is common in Bangladesh, most of the parties are think that, mediator or arbitrator could be biased and could provide the award in unfair manner. One of the motives why parties especially corporate are interested in ADR is the confidentiality. Generally it is the norm that, individuals who are related with an ADR process always maintain confidentiality of the subject matter of the proceedings. This is the reason why, in the ADR proceedings, parties could deliver any reasonable submission without diffidence to dissolve any disputed matter. However, the court proceedings may not always maintain confidentiality; therefore, corporate parties especially suffer from reputation risk which may damage their good will in the business world. In the corporate world, reputation adds value in the market and hampering that reputation through a dispute is completely undesirable for corporate parties. We are generally in favor of insertion of ADR clause in all commercial contracts. However, it should be directory to put an ADR clause in the commercial contracts so that whenever a dispute arises, parties can attempt for an amicable settlement first. Commercial contracts are very sensitive and crucial in nature because of the involvement of financial investments. If any dispute solved through the judgment of the court, then only one party will win the suit however if the problem settled in ADR then both parties will be at win-win position. Moreover, ADR reduces the chances of hostility between parties and in case the dispute is settled at the first step then it saves the parties and court from huge consummation of time. ADR process is an optional additional tool for dispute resolution. It is not another layer of proceeding or unnecessary diversion because ADR helps to remove undue number of phases of court proceedings in a cost effective manner. However, I think, it has become a fantasy now to determine a dispute through court proceedings in a rapid manner. The proceedings of courts are becoming so lengthy and time consuming for having plenty of suits that till reaching into the conclusion of litigation, the sole purpose of the litigation may be frustrated. This is the primary reason; parties related to the dispute are indifferent to come in purview of the court proceedings. Hence they tend to choose ADR to conduct the dispute resolution process beyond the court proceedings.