Interim Protection in Bangladesh for Foreign-seated Arbitration: A Door Opened in Reasoning, but Closed by Precedent
Legend World Tank PTE v Multinational Shipping Co. Ltd. and others Arbitration Application No. 30 of 2025, High Court Division, Mr. Md. Toufiq Inam J § Executive Summary This judgment addresses whether Bangladeshi courts may grant interim protection under section 7A of the Arbitration Act 2001 in aid of a foreign-seated arbitration. Although the Court considered that the text, purpose and legislative scheme of section 7A support a limited protective jurisdiction over assets in Bangladesh, it held itself bound by the Larger Bench decision in Accom Travels and Tours Ltd v Oman Air SAOC. The application was therefore dismissed as not maintainable. The decision does not alter the prevailing law, but offers a carefully reasoned basis for the Appellate Division to reconsider whether the territorial limits governing supervision of an arbitration should also exclude judicial measures designed only to preserve its effectiveness. § Background Facts Legend World Tank PTE sought interim protection under section 7A of the Arbitration Act 2001 and section 151 of the Code of Civil Procedure over 107 tank containers allegedly retained by its Bangladeshi agent. The relevant agreement provided for arbitration seated in Singapore under the SIAC Rules, and SIAC Arbitration had already been commenced. At the admission stage, the Hon’ble High Court Division of the Supreme Court of Bangladesh directed disclosure of the containers’ location and restrained their disposal for three months. The central decisive question was whether section 7A allowed that protection to continue when Singapore, rather than Bangladesh, was the juridical seat of the arbitration. The obstacle was Accom Travels and Tours Ltd v Oman Air SAOC, 27 BLC 596. By a majority of 2:1, the Larger Bench had held that, apart from sections 45 to 47, the Arbitration Act does not apply where the seat is outside Bangladesh. On that reasoning, sections 7, 7A and 10 are unavailable, save that section 7A may operate at the stage of enforcing a foreign award. The preliminary objection therefore raised not only statutory interpretation, but also whether a single judge could decline to follow a binding Larger Bench decision whose reasoning he considered doubtful. § The Court’s Reasoning I. Effect of the Non Obstante Clauses in Sections 7 and 7A of the Arbitration Act, 2001 of Bangladesh The judgment critically analysed the different opening words of sections 7 and 7A. Section 7 overrides other laws governing judicial proceedings. Section 7A, however, expressly operates notwithstanding section 7 itself. Md. Toufiq Inam J treated that wording as a deliberate exception to the general restriction on judicial intervention. If section 7A were entirely controlled by the territorial and jurisdictional limitations associated with section 7, its opening clause would perform no meaningful work. This was central to the Court’s criticism of Accom. In its view, the Larger Bench had given dominant weight to section 3 without separately examining the language, legislative history and particular function of section 7A. The result was a territorial reading of the Act that did not sufficiently account for Parliament’s creation of an independent protective power in 2004. II. Legislative Intent Behind the Introduction of Section 7A Section 7A permits interim measures before arbitration, during the proceedings and until enforcement of an award under section 44 or section 45. The reference to section 45 was decisive because that provision concerns recognition and enforcement of foreign awards. The Court reasoned that Parliament could not have referred expressly to foreign award enforcement while intending section 7A to have no operation during the life of an arbitration seated abroad. The judgment then separated supervisory jurisdiction from supportive jurisdiction. Powers concerning appointment or removal of arbitrators, challenges to jurisdiction and control of the arbitral process ordinarily belong to the courts of the seat. Section 7A performs a different role. It preserves assets, evidence and the existing state of affairs until the tribunal can act or an award can be enforced. An order protecting property in Bangladesh does not regulate the Singapore arbitration or decide the dispute. It protects the practical value of that process. III. The Significance of the Preamble of the Act, 2001 The Preamble supported this distinction. The 2001 Act addresses domestic arbitration, international commercial arbitration, foreign awards and connected matters. For the Court, this wider legislative design combined limited judicial intervention with judicial assistance where assistance is needed to prevent arbitration from becoming ineffective. Section 7A was therefore read as a provision supporting arbitration, not supervising it. That interpretation also sat within the competing authorities. Crown Maritime Co. Ltd v Royal Boskalis Westminster NV, 16 BLC 140, had recognised section 7A protection for assets in Bangladesh in aid of an arbitration seated abroad. The restrictive line, represented by STX Corporation Ltd v Meghna Group of Industries Ltd, 64 DLR (2012) 550, treated section 3 as excluding interim relief where the seat lay outside Bangladesh. The present judgment regarded the supportive character of section 7A as the feature that the restrictive approach had not adequately addressed. IV. Whether Section 3 Excludes the Operation of Section 7A Section 3 undoubtedly lays down the Act’s general territorial application. The Court nevertheless held that it should not be read in isolation or in a manner that defeats a later and more specific provision. Its preferred reconciliation was that section 3 defines the general reach of the Act, while section 7A creates a limited protective jurisdiction over persons and property in Bangladesh. The seat determines supervision of the arbitration, but does not necessarily exclude assistance designed only to preserve its efficacy. V. The View in Accom and the Overlooked Binding Decision The deeper difficulty with Accom arose from Mosharaf Composite Textile Mills Ltd v ECOM Agroindustrial Corp Ltd, 4 SCOB (2015) AD 28. In ECOM, the Appellate Division upheld a stay of Bangladeshi proceedings so that arbitration pending in Liverpool could continue. In the review judgment dated 11 July 2017, the Appellate Division expressly stated that Unicol Bangladesh Ltd v Maxwell Engineering Works Ltd, 56 DLR (AD) 166, stood pro tanto overruled insofar as it treated section 10 as unavailable to an arbitration seated abroad. Yet Accom, decided in 2021, relied substantially on Unicol and the restrictive line flowing from it without considering either ECOM judgment. Mr. Md. Toufiq Inam J considered this omission to have materially weakened the jurisprudential foundation of Accom, especially on section 10. ECOM showed that a foreign seat does not, by itself, exclude every form of judicial assistance under the Act. That same distinction between control and assistance was directly relevant to section 7A. VI. Applicability of Section 151 CPC in Place of Section 10 The Court identified a further inconsistency in Accom. Having held section 10 unavailable, the Larger Bench nevertheless stayed the Bangladeshi proceedings under the Court’s inherent power in section 151 CPC. In substance, it granted through the general law the relief that it had found unavailable under the special statute. For the Court, inherent power supplements the law where no specific mechanism exists. It should not ordinarily be used to circumvent, enlarge or recreate a remedy that Parliament has specifically addressed. If section 3 truly prohibited a stay under section 10, the same territorial restriction could not coherently be avoided through section 151. Conversely, once ECOM recognised section 10 as applicable, resort to inherent jurisdiction became unnecessary. VII. Development in the Italian Thai Case In Italian Thai Development Public Company Limited v The Export Import Bank of India, Civil Petition for Leave to Appeal No. 1828 of 2024, the High Court Division had dismissed a section 7A application because the arbitration was seated in Singapore. It was that restrictive High Court Division approach, not the Appellate Division’s decision, which the present judgment treated as unresolved and open to reconsideration. The Appellate Division continued protection until the first sitting of the Singapore tribunal and later disposed of the matter as infructuous after the tribunal assumed jurisdiction under section 7A(6). It consciously refrained from deciding whether the High Court Division’s interpretation of section 7A was correct. The present Court therefore regarded the availability of section 7A for arbitration seated abroad as still awaiting an authoritative and reasoned determination by the Appellate Division. Having appeared as an assisting counsel for one of the parties in the Italian Thai proceedings, I had been particularly keen to obtain the Appellate Division’s authoritative guidance on these important questions of principle. However, because the arbitral tribunal was constituted and assumed jurisdiction before the appeal could be finally determined, the matter became infructuous and the Court did not have occasion to pronounce upon the correctness of the High Court Division’s restrictive interpretation of section 7A. The underlying jurisdictional issue therefore remained unresolved and a golden opportunity was missed. VIII. Binding Effect of the Larger Bench Decision and Order Despite its preferred construction, the Court followed Accom. Mr. Md. Toufiq Inam J held that stare decisis serves certainty, consistency and judicial discipline, not merely the preservation of reasoning that every later judge considers correct. A single judge could not disregard a majority decision of a Larger Bench because it had overlooked ECOM or because its statutory analysis appeared unpersuasive. The authority of reconsideration belonged to the Appellate Division or a Bench of equal or greater strength. The application was therefore dismissed on ground of maintainability without examination of the merits and without prejudice to any remedy before the tribunal or another competent forum. The earlier interim protection was recalled and vacated, with no order as to costs. § Conclusion The judgment’s importance lies in the distance between its reasoning and its result. It presents a structured statutory case for allowing Bangladeshi courts to preserve local assets in support of arbitration seated abroad, yet refuses to convert that reasoning into relief because horizontal precedent required obedience to Accom. It therefore neither changes the binding rule nor closes the debate. Instead, it identifies with unusual clarity the question now requiring authoritative resolution: whether the territorial principle governing supervision should also prevent the courts of Bangladesh from giving limited protection to property within their own jurisdiction. Author: Rifat Rahman, Senior Associate, Mahbub & Company