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Accom Travels and Tours Limited vs Oman Air

August 26, 2022

The “Plaintiff” operates a travel agency and an air freight cargo handling business in Bangladesh. To extend its business, Plaintiff entered into a General Sale Agent(“GSA”) and General Sales & Service Agent (“GSSA”) agreement with a foreign air (“Respondent”) operator on 1st September 2008. The agreement was later renewed in 2013.

Thereafter, the Respondent terminated both the GSA and GSSA agreements in September 2014. Due to the termination, Plaintiff suffered a huge loss  on  damage and claimed US$9.04  million against the Respondent and issued a legal notice. Thereafter, Plaintiff filed a money suit in the joint district judge of Dhaka, Bangladesh. The District Court of Dhaka after hearing both the parties, dismissed the suit mentioning that the suit is not maintainable in court and ordered to resolve it through arbitration. The district court gave the order based on section 7 and section 10 of the Arbitration Act 2001.

Being aggrieved, Plaintiff appealed in the high court division of Bangladesh supreme court against the judgment and decree dated 09.05.2016 (decree signed on 12.05.2016) passed in Money Suit No. 12 of 2015.

The Chief Justice constituted a larger bench to hear the case as it involved legal issues. The appellate court stated that the trial court committed gross illegality in dismissing the money suit by invoking the provision under section 7 of the arbitration act 2001.

Thereby, the appellate court set aside the impugned judgment of the trial court. The suit in question is restored to its file and the name, however,  to further proceed of the suit will stay until the arbitration proceedings at Oman will be settled.

However, in this judgment, appellant court has raised some important issues concerning international arbitration as follows:

  • This judgment was given by a bench of three justice namely Mr. Justice Sheikh Hassan Arif, Mr. Justice Md. Ashraful Kamal and Mr. Justice Ahmed Sohel. Justice Sheikh Hasan Arif and Justice Md Ashraful Kamal agreed to the same opinion and delivered this judgment. Although agreed to the decision of the majority justices, Md Ashraful Kamal J disagreed on some legal findings and therefore provided a separate opinion in the judgement.
  • Mr. Justice Sheikh Hassan Arif, in view of the provisions under Sections 3(1) and 3(2) of the Arbitration Act 2001, the provisions of the said Act, except the provisions under Sections 45, 46 and 47, are not applicable in respect of arbitration where the seat of such arbitration is in a foreign country. Thus, the provisions under Sections 7, 7A, and 10 cannot be invoked in such a case except that the power of the Court concerned to take interim measures under Section 7A of the said Act may only be invoked at the stage of enforcement of the foreign arbitral award.
  • Whereas Mr. Justice Md. Ashraful Kamal stated that it did not mentioned anything in the arbitration act 2001 that the act cannot invoke in a case where the seat of the arbitration is in a foreign country.