Commercial Courts Act being amended, questions raised over implementation

The government is amending the Commercial Courts Act to increase foreign investment and protect the interests of investors. At the same time the number of the ongoing 75 commercial courts across the country is being reduced to 30. Law Ministry sources have confirmed this information.

The main objective of this initiative is to quickly dispose of business disputes, restore investors’ confidence in the judicial system and improve the country’s investment environment. However, merely enacting a new law or establishing a large number of commercial courts across the country will not bring the desired results. Rather, effective application of the existing law, efficiency of the judicial process and ensuring the rule of law are more urgent. Therefore the government is amending the Commercial Courts Act, Law Ministry sources have said.

With the aim of quickly disposing of business disputes the Commercial Courts Act, 2026 was passed in the National Parliament on April 10 this year. Earlier an ordinance was issued in this regard on January 1. Under the new law arrangements were made to establish 75 commercial courts across the country. Opportunity has been kept in these courts to dispose of disputes related to buying and selling of goods and services, construction and infrastructure contracts, partnership, joint investment, insurance and other commercial transactions. Alongside there are also provisions for resolving disputes through mediation, summary trial and completing the hearing within a specific time.

Attorney General Ruhul Quddus Kajol told Views Bangladesh in this regard, “The government is going to amend the Commercial Courts Act to increase foreign investment and ensure its protection.” He said, “There is no need for 75 commercial courts across the country. Merely making a new law will not do, implementation of the law is urgent.”

It is clear from his statement that ensuring the effectiveness of the judicial system is a bigger challenge than increasing the number of courts. Because, delays in disposing of business disputes, uncertainty in implementing contracts and complexity of the judicial process influence the decisions of investors. If any investor is forced to roam around the court for years after getting involved in a business dispute, he may lose interest in taking the risk of new investment in that country.

In this regard this correspondent spoke with UNDP Resident Representative Stefan Rodriguez at the Attorney General’s Office of the Supreme Court. He said, “It is not capital or infrastructure, the confidence of investors in the rule of law has to be restored for a favourable investment environment.” He said it is urgent to ensure that investors can rely on the judicial system if an adverse situation arises.

That is, merely providing tax holidays, land, electricity or infrastructural facilities will not do to attract investment. Investors must also have the assurance that if disputes with business partners, breach of contract or any other legal complication arise, they will get impartial and effective justice. Their assets and business interests will be protected through the law.

However, the government thinks that even after the law comes into effect there is no opportunity in it to solve all kinds of problems of foreign investors. Law Minister Md Asaduzzaman told Views Bangladesh in this regard, “There are limitations in the existing law regarding disputes with local partners, criminal cases filed by workers, VAT-related complications and taking investment or profit back to the country. There is also a need for a new review of some provisions of the arbitration system.
For this reason an initiative has been taken to make the draft of the law more up-to-date by amending it.” He said, “The government has sought written recommendations from the stakeholders. The target has been set to finalise the draft of the amended law and present it in the National Parliament in January next.”

Meanwhile according to experts, the establishment of commercial courts is undoubtedly an important reform of the judicial system. But if the activities of the courts are not kept functional, special training of judges on commercial law, skilled manpower, case information management and assurance of quick implementation of judgments are not there, the benefits of this initiative will remain limited. At the same time coordination between the jurisdiction of the courts and other dispute resolution systems is also needed.

When Bangladesh is trying to increase foreign investment and strengthen its ability to compete in the international market, there is no alternative to building a credible system for disposing of commercial disputes. Ultimately investors will not consider how many courts there are; rather they will consider how quickly, impartially and effectively remedy can be obtained if a dispute arises. Therefore the success of amending the new law will depend on how much the assurance of getting justice is established in reality rather than reforms on paper.