Muhammad A (Rumee) Ali, one of the country’s accomplished bankers, joined Bangladesh International Arbitration Centre as chief executive in 2015 with the aim popularising the alternative dispute resolution against the backdrop of many outstanding commercial cases in the court. But unlike his illustrious banking career, he is facing a lot of problems to make BIAC function properly. In an interview with Shakhawat Hossain of New Age, he did not only focus on the problems but also explained why the alternative dispute resolution was crucial for the country’s economic progress. Following is the excerpts of the interview taken on February 25 at BIAC office.
New Age: What is ADR all about?
Muhammad A (Rumee) Ali: The purpose of ADR is to find an alternative to court-based justice system. It is not moving away from the justice but a process of seeking another way where your do not have to go to court-based legal system to settle a dispute. In most jurisdictions all over the world nowadays the court-based justice system is considered as the last resort, not the first resort. If you look back to the history of Bangladesh there is a rich history of the ADR in the form salish.
New Age: Why did the traditional judicial system like salish become weak?
Muhammad A (Rumee) Ali: Salish has been on the decline since the colonial era of the British. The colonial system introduced the court-based legal system which represented the colonial masters. To make the court-based legal system stronger the colonial rulers weakened the salish. Now all rush to court while the salish is almost forgotten.
New Age: Tell me about the centre you are running?
Muhammad A (Rumee) Ali: Bangladesh International Arbitration Centre was set up in 2011 for which credit should go to Mahbubur Rahman, now the chairman of the organisation. Although the centre got licence much earlier but its operation was delayed for lack of fund as well as interest. A grant from the World Bank’s subsidiary IFC and equity from three chambers — International, Metro and Dhaka — BIAC started operation. Since I joined in 2015, we set up a mission to embed the use of ADR in our dispute resolution eco system.
New Age: Are you happy with the progress of BIAC?
Muhammad A (Rumee) Ali: When I signed an agreement with Singapore Arbitration Centre, its chairman told me not to be in a hurry. It took 14 years to reach the level where they are earning money from arbitration. And in Hong Kong it took 18 years. Here we are into eight years. So, I suppose it will take few more years to reach that level. It is seen not only in Bangladesh but also everywhere in the world. But the difference is that most of the countries overcome the problem by resorting to ADR. Best example is Malaysia. Now 70 to 60 per cent cases are resolved through the ADR. The UK and The USA had also the same problems.
New Age: Why is the ADR so much needed for us?
Muhammad A (Rumee) Ali: Bangladesh has the same problems as others countries used to have in settling the commercial disputes. We are the 189th in enforcement of contracts in World Bank’s index. If we want to resolve it, we need to use ADR. Is there another way? I don’t think so. Because you will not be able clear the messes. There are so many cases outstanding….. so many cases pending with Artha Rin Adalat. How do you resolve this issue without the help of ADR?
New Age: What are things that prevent the BIAC to be fully functionalised?
Muhammad A (Rumee) Ali: I don’t think we are prevented from being functional. It is the government which is being prevented from being more functional by not using the ADR system. Do you think resolving cases in four years and having placed 189th on the WB doing business index should be called functional or an example of being functional? I don’t think so. We can be functional if the government wants to be functional in this area. I am not saying that the ADR related cases should be to be sent to BIAC. Set up 120 more BIACs but do solve the problems. The country needs the use of ADR to make the economy more efficient.
New Age: How far are you going within and outside the government to solve the problem the BIAC is facing?
Muhammad A (Rumee) Ali: We have already reached out to very senior level of the government including ministers, Bangladesh Bank governor, secretaries and the law commission. We are also talking to opinion makers in legal areas, senior lawyers and former chief justices. But there has to be an openness to listen to us and help us. Because helping us is not only helping us; the whole country and the whole economy will be helped. I earlier emphasised that BIAC is not a profit making organisation.
New Age: Are you satisfied with the response you got from the government in solving the problems?
Muhammad A (Rumee) Ali: They all have heard us patiently. I don’t think that there is any negativity and I won’t say that they did not want to help us. Still, I think there are pulls and tensions, and vested interest and other issues that maybe you know make them think more before they take steps. Maybe you will see action… We are trying our best. I am very optimistic about ADR because I feel we have no other options. In fact, Bangladesh has no option.
New Age: Will you explain why there is no option?
Muhammad A (Rumee) Ali: The legal option is not a suitable one. Going to court for settling a commercial problem or a dispute is a zero-sum game. One wins and the other loses meaning that a plus and a minus, equal of which is always zero. But mediation is not a zero-sum game. I do believe that the court is not your best place to solve your commercial cases. Logic tells me that the best place for solving the commercial cases is ADR. The ADR is basically needed to increase foreign direct investment in the country and improve the country’s position in the doing business index. Internally we need the practice of ADR to get rid of some 3.6 million commercial cases now pending with the court. It’s a huge backlog. It will take more than a hundred years to resolve the cases by the court with the present infrastructure. It is not a system. And all these lead the economy to inefficiency. Nobody would invest money in an inefficient economy. The financial disputes will rise further with the growing number of financial transaction as Bangladesh aspires to be a middle income country by 2021. The inefficient dispute settlement process is also affecting the bank borrowers as the bank imposed higher interest rate on them to mitigate risk. So in many ways people are paying for it. Let me tell you no foreign investor wants to go to court. From my experience in working in multinational companies I can say that that the foreign investors hate to go to court. Because the moment they go to court the matter becomes public. So when the foreign investors find that they would have no other ways but go to court, they would continue to feel discouraged to make investment here. But mediation and arbitration of The ADR are confidential.
New Age: Can BIAC play any effective role in reducing bad loan?
Muhammad A (Rumee) Ali: We have put some suggestions at a discussion few weeks back with the central bank governor, chairman of Law Commission and managing directors of the bank. One of them is for court-directed mediation and the other is for court-directed arbitration. If the court says that particular commercial cases should be resolve through ADR we can set mediators or arbitrators to the parties for settling the cases in 90 days under the first track arbitration. This way many cases can be sent out of court and the court can really go for more important arbitration and big bad loan cases. There should be a provision in Artha Rin Adalat Act that the court may direct the parties to go for arbitration. Now there is a provision that the court asked the parties for mediation by 60 days. But it is ineffective.
New Age: Who will take initiative to bring about the much-needed changes?
Muhammad A (Rumee) Ali: We have already taken the initiative. We have already sent our recommendations to Law Commission. We have also urged Bangladesh Bank. All this is time consuming. But by this time the court can give directive for the use of arbitration.
New Age: Do you want to say the court has a role to play in popularising the ADR?
Muhammad A (Rumee) Ali: Absolutely, the court can contribute immensely to the particular area. Now there is no provision of ADR in the contract on borrowing money or doing business. If the provision is kept in the contracts, the directive of the court would not be necessary. That is why we are saying that the central bank should make it compulsory — any contract or legal document must have the option of arbitration.
New Age: Can ADR mechanism be used to trace out debt loan said to be smuggled out of the country?
Muhammad A (Rumee) Ali: The New York convention signed by 156 countries including Bangladesh agreed to enforce arbitration award. By this we have crossed jurisdiction effectiveness. If you take award against a bad loan and go to particular country, the court will accept the award and direct selling his/her asset, if there any, to get back the money. In no other way, you can make the suspects accountable.
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