The first step towards the beginning of the 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. 

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. 

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.  

It is worth mentioning here that during the Pakistan period, The Muslim Family Laws Ordinance, 1961 was enacted which also provided for a reconciliation process through an arbitration council in respect of Talaq by Muslims before the Talaq could become effective.

The Code of Civil Procedure was amended to introduce, through sections 89A and 89B, as in India and Pakistan, ADR through mediation or arbitration in all kinds of non-family litigations.

The Artha Rin Adalat Ain, 2003 also provides scope for resolution of disputes through ADR at the decree execution stage.