The first step towards adopting an alternative method of dispute settlement in ancient India was found in the early part of the Bengal Regulation Act, 1 1722 that in all cases of disputed accounts the parties would submit to the same arbitrator whose decision is considered a decree and will be final.

  The Regulation Act, 1871 further stipulates that judges must recommend parties to a dispute on behalf of a mutually agreeable person, and that no arbitrator's award may be determined unless there are two witnesses who are seriously at fault or have not been partnered by the arbitrator.

  Sir Charleswood made a recommendation to the Second Law Commission for the first time to give a uniform law on arbitration.  Then in 1859 the Code of Civil Procedure was enacted.  Sections 312, 313-325 and 326-32.  Determines the permission and procedure of arbitration without the intervention of the court.

  The Contract Act, 1872 also recognizes the arbitration agreement as an exception to section 28, which presupposes that no contract of legal execution is void.

  The Arbitration Act, 1899, was later enacted to apply only to presidential cities to facilitate the settlement of disputes outside the courts.

  The Arbitration Act, 1940 was repealed and replaced the previous law of 1899.  This 1940 law was followed in Bangladesh during the Pakistan period till 2001, such as new arbitration laws.  The Arbitration Act, 2001 was promulgated in 1999 after the Bangladesh Law Commission proposed it to the Arbitration Law Commission.  As such, the current law on arbitration in Bangladesh is the Arbitration Act, 2001.

  Effectively, an important feature of the current law is that it has been amended in accordance with the Model Law on International Trade Arbitration adopted by the United Nations Commission on International Trade Law and is therefore consistent with international standards.