🔹 Introduction
In today’s global business world, international arbitration has become a key method for resolving disputes in cross-border contracts. A clear understanding of procedural and substantive law is essential, as this distinction directly affects how disputes are managed and whether arbitral awards are enforced.
- Procedural law → covers rules and process of arbitration (timelines, steps, seat of arbitration).
- Substantive law → defines the legal rights and duties in the contract itself.
The case of Bangladesh Air Service (Pvt) Ltd., active in international aviation and logistics, highlights the challenges that arise when these aspects are unclear. Their experience shows how the line between process and contract law can impact outcomes in foreign arbitration.
This article focuses on how procedural and substantive law interact in foreign arbitration agreements, with special emphasis on the Bangladeshi context.
🔹 Literature Review
Many scholars have studied the difference between procedural and substantive law in foreign arbitration, especially in Bangladesh.
- Gary B. Born (2021) → argues the seat of arbitration determines procedural law, regardless of chosen substantive law.
- Julian D.M. Lew et al. (2003) → show that some jurisdictions allow procedural flexibility, while others enforce mandatory rules.
- M. Rafiqul Halim (2014) → notes Bangladesh’s Arbitration Act lacks clear boundaries between procedural and substantive law.
- A.F.M. Maniruzzaman (2003, 2005) → describes Bangladesh’s Arbitration Act as a “patchwork” of mixed laws, often leading courts to overreach.
- Md. Towhidul Islam Kabir (2017) → highlights doctrinal uncertainty in Bangladesh, leading to inconsistent rulings.
- Mustafizur Rahman (2022) → critiques judicial interpretations that weaken the pro-arbitration approach of the New York Convention.
- William W. Park (2006) → warns that too much procedural flexibility can be abused.
- Akhil R. Rajput (2018) → stresses risks of conflict when parties choose substantive law conflicting with host country rules.
- M. Rafiqul Islam (2017) → emphasizes enforcement challenges of foreign awards in Bangladesh.
- Md. Ashraful Hassan (2019) → connects arbitration law with business risks and foreign investment concerns.
These insights are highly relevant to the case of Bangladesh Air Service (Pvt) Ltd.
🔹 Problem Statement
Although foreign arbitration is widely used for cross-border disputes, the line between procedural and substantive law often causes confusion in Bangladesh.
- Courts sometimes revisit substantive matters under procedural review, against international norms.
- This delays proceedings and weakens trust in arbitration.
- Businesses face uncertainty and discouragement in foreign investment.
The challenge lies in balancing international standards with domestic legal practices.
🔹 Objectives
The main objective of this study is to explore how the distinction between procedural and substantive law impacts interpretation and enforcement of foreign arbitration agreements in Bangladesh.
- Understand how Bangladeshi courts handle this distinction.
- Assess whether their approach aligns with international norms.
- Explore the impact on party autonomy, business confidence, and enforcement of awards.
- Suggest practical solutions for Bangladeshi companies and legal practitioners.
🔹 Research Questions
- What are the main differences between procedural and substantive law in international arbitration?
- How do Bangladeshi courts distinguish between them in foreign arbitration agreements?
- What challenges do Bangladeshi parties face in cross-border arbitration?
- Is Bangladesh’s legal system effective in dealing with cross-border arbitration?
🔹 Limitations
- Limited time restricted coverage of all areas.
- Many books and journal articles were behind paywalls.
- No fieldwork (e.g., interviews with legal professionals) could be conducted.
- The focus was mainly on the Bangladeshi context, especially Bangladesh Air Service (Pvt) Ltd., without broad comparison with other countries.
🔹 Justification
This article is valuable because it highlights how the procedural–substantive law distinction affects foreign arbitration agreements in Bangladesh.
- Unclear arbitration clauses → delays, higher costs, and uncertainty.
- Practical insights for students, lawyers, businesses, and policymakers.
- Adds to South Asian arbitration scholarship, often overlooked.
Future studies may compare Bangladesh with other countries and suggest stronger legal reforms to support arbitration in emerging markets.
🔹 Methodology
The research uses the doctrinal legal research method, focusing on analysis of:
- Primary sources → Arbitration Act 2001, New York Convention, key case law.
- Secondary sources → books, academic articles, commentaries.
- Comparative approach → looking at how other jurisdictions handle procedural-substantive conflicts.
By focusing on Bangladesh Air Service (Pvt) Ltd., the study connects theory with practice and shows how legal uncertainty impacts arbitration outcomes.