The first footsteps towards taking resort to alternate methods of dispute resolution in the ancient India can be traced back as early as The Bengal Regulation Act,1772 which provided that in all cases of disputed accounts, parties are to submit the same to arbitrators whose decision are deemed a decree and shall be final.

           The Regulation Act,1781 further envisaged that judges should recommend the parties to submit disputes to mutually agreed person and no award of arbitrator could be set aside unless there were two witnesses that arbitrator had committed gross error or was partial to a party.

              A recommendation for the first time was made to the Second Law Commission by Sir Charleswood to provide for a uniform law regarding arbitration. The Code of Civil Procedure was then enacted accordingly in 1859. Sections 312, 313-325 and 326-327 laid down the permission and procedure for arbitration without the court’s intervention.

              Contract Act, 1872 also recognizes arbitration agreement as an exception to Section 28, which envisages that any agreement in restraint of legal proceedings is void.

           Later, the Arbitration Act, 1899 was also enacted to apply only to presidency towns to facilitate settlement of disputes out of Court.

              The Arbitration Act, 1940 repealed and replaced the previous Act of 1899 on the subject. This Act of 1940 was followed in Bangladesh throughout the Pakistan period till the year 2001 when the new law on arbitration viz. the Arbitration Act, 2001 was promulgated after the Law Commission of Bangladesh proposed amendment in the law regarding Arbitration in 1999. As such, the current legislation in force in Bangladesh today regarding arbitration is the Arbitration Act, 2001.

              An important feature of the current legislation in force is that it has been codified along the lines of Model Law on International Commercial Arbitration adopted by United Nations Commission on International Trade Law (UNCITRAL) and therefore corresponds to international standards of norms. 

             As per the amendment, mediation means flexible, informal, non-binding, confidential, non-adversarial and consensual dispute resolution process in which the mediator shall facilitate a compromise of disputes without directing or dictating the terms of such compromise. If the mediation results in a compromise decree both the plaintiff and the defendant will get back the money they spent on court fee. Failure of mediation within a stated or extended period will bring the case back to the trial Judge for trial. If the court was the mediator itself when the mediation failed, the trial will be held by another Judge of equal jurisdiction. Whatever transpires in the mediation proceedings is not receivable in evidence at the trial of the case in question or at the trial of any other case between the parties. A decree given after such mediation is not amenable to appeal or revision.

             The Artha Rin Adalat Ain, 2003 originally stipulated a provision for mediation meeting under the chairmanship of the Judge of an Artha Rin Adalat. But, subsequently, through an amendment made in the Act in 2010, some new provisions for mediation through an independent third party have been incorporated. The Artha Rin Adalat Ain, 2003 also provides scope for resolution of disputes through ADR at the decree execution stage.

            Very recently the government has introduced the system of ADR in solving the tax disputes. The tax disputes can be settled now through ADR even at the appellate stage also.

                Even in international arena, Bangladesh has shown her belief in resolving disputes through ADR in a friendly and peaceful manner. Earlier, in 2009 we referred our maritime disputes with Myanmar and India to the international arbitration tribunals under the United Nations. The International Tribunal on Law of the Sea (ITLOS) by a historic verdict, and indeed a very first one in these types of maritime disputes involving sovereign countries, decided the issues largely in favour of Bangladesh. It was decided in such a way that both Bangladesh and Myanmar were happy with the outcome and it was a win-win situation for both the countries. Both the countries welcomed the verdict.