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 The Arbitration Act, 1940 repealed and replaced the previous Act of 1899 on the subject.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.