A recommendation for the first time was made to the Second Law Commission by Sir Charleswood to provide for a uniform law regarding arbitration. 

In June 2000, formalized ADR was introduced in Bangladesh by means of court- annexed judicial settlement pilot projects, in an effort to decrease delays, expenses, and the frustrations of litigants laboring through the traditional trial process. All three pilot programs were fully functioning by January 2001.

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.