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BIAC underscores BB advice to recover bad debts thru ADR

Published : Wednesday, 2 October, 2024 at 12:00 AM  Count : 121
Business Correspondent
Bangladesh International Arbitration Centre (BIAC) in a roundtable discussion underscored a recent advice of the Bangladesh Bank (BB) issued to all commercial banks to settle disputes through Alternative Dispute Resolution (ADR) methods, specifically with the assistance of BIAC, to recover bad debts.
The BB issued the advice through BRPD Circular No. 11, was discussed at the round table at the BIAC on Monday, attended by key stakeholders, including senior officials from various banks, legal experts, and financial analysts. 
BIAC Vice Chairman Muhammad A. (Rumee) Ali delivered the opening remarks, highlighting the importance of the BRPD Circular No. 11, issued on May 12, 2024. The circular encourages banks to seek BIAC's assistance in recovering non-performing loans (NPLs). 
He explained that BIAC has its own Mediation Rules 2019 and Arbitration Rules 2019, which establish a time frame of 3 months to 388 days for case resolution. He further emphasized that BIAC has a distinguished panel of arbitrators, including eminent former chief justices, renowned advocates, and jurists from both local and international backgrounds.
Additionally, he introduced BIAC's pilot initiative, in which BIAC has invited banks to submit an initial 10 cases for resolution through mediation, aiming to demonstrate the effectiveness of ADR in handling bad debts.
Special Guest Barrister Mohammed Forrukh Rahman, Advocate os Bangladesh Supreme Court shared his experiences of resolving cases using ADR within just six months, with many already in the execution stage. 
He pointed out that under the Arbitration Act 2001, it typically takes 6 months to 1 year to appoint an arbitrator, while BIAC can select an arbitrator within approximately 3 days due to its established panel. 
Additionally, he noted that mediators appointed by the Money Loan Court in Bangladesh are not certified, whereas BIAC offers a panel of certified mediators. As a result, Mr. Rahman stressed that for efficient and expedited case resolution, BIAC offers unparalleled advantages.
Bank representatives raised concerns about the backlog of cases in the Artha Rin Courts, with some cases pending for over 10 years. They also mentioned that the time frame under Section 22 of the Money Loan Court Act 2003 is often exploited by defaulters to delay proceedings, preventing banks from seeing timely resolution. They noted that, to date, no bank has been able to fully benefit from Section 22's provisions.
The event concluded with a commitment from the banks to adopt BIAC's pilot program. They agreed to submit 10 cases involving non-willful defaulters for resolution under BIAC's mediation process. 
Additionally, participants recommended making mediation mandatory for both banks and customers before proceeding to court, and they emphasized the importance of ensuring that mediation awards are enforceable, to guarantee faster case resolution.
Mutual Trust Bank PLC Legal Affairs Division Barrister Shafayat Ullah, moderated the event while City Bank PLC Legal Head Ms. Ummay Habiba Sharmin and IFIC Bank PLC Head of Legal Operations Rafat Ahmed Pavel shared their insights as speakers.



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