Alternative dispute resolution in Bangladesh has moved from an optional extra to a central part of the justice system. Courts can send civil suits to mediation, mandatory pre-case mediation was introduced for several types of dispute in 2025, and commercial parties increasingly rely on arbitration. Used well, ADR can resolve disputes in months rather than years.

Why alternative dispute resolution in Bangladesh matters

Bangladeshi courts carry a heavy backlog of cases, and ordinary civil suits often take years to reach judgment, with further time for appeals and execution. Alternative dispute resolution in Bangladesh offers parties a way to settle disputes faster, more cheaply and with more control over the outcome. It also preserves relationships, which matters in family, business and neighbourhood disputes.

ADR is not one procedure but a family of methods. Negotiation is the simplest. Mediation uses a neutral third party to help parties reach their own agreement. Conciliation is similar, sometimes with a more active neutral. Arbitration is different in kind: the arbitrator decides the dispute and issues a binding award. Each has its place, and the law now encourages or requires several of them.

Key sources of law

The statutes are available on the Laws of Bangladesh portal.

Court-annexed mediation under the CPC

Section 89A of the Code of Civil Procedure allows the court, after the written statement is filed, to refer a suit to mediation, either through the judge, the parties' advocates or a mediator from a panel. If mediation succeeds, the court passes a decree in terms of the settlement. If it fails, the suit proceeds to trial, and anything said in mediation is generally confidential and cannot be used as evidence.

Section 89B allows parties to agree to withdraw the suit and refer the dispute to arbitration under the Arbitration Act 2001. Section 89C allows the appellate court to refer an appeal to mediation. Together, these provisions give judges and parties several opportunities to settle before and after trial. Alternative dispute resolution in Bangladesh through the courts has been strengthened by the training of judges and lawyers as mediators.

Mandatory pre-case mediation since 2025

The most significant recent reform is pre-case mediation through legal aid offices. The Legal Aid Services (Amendment) Ordinance 2025, which came into effect on 1 July 2025, made mediation mandatory before filing certain cases. Implementation began in twelve districts on 18 September 2025: Sylhet, Moulvibazar, Sunamganj, Faridpur, Mymensingh, Rangpur, Dinajpur, Satkhira, Kushtia, Comilla, Noakhali and Rangamati, according to reports at the time.

The disputes covered were reported to include family disputes under the Family Courts Act 2023, house rent disputes under the House Rent Control Act 1991, property partition within Assistant Judge jurisdiction, pre-emption, parents' maintenance, dowry complaints under the Dowry Prohibition Act 2018 and certain complaints under the Women and Children Repression Prevention Act 2000. Parties go to the district legal aid office first; if mediation succeeds, the signed agreement certified by the legal aid officer is enforceable like a court order. If it fails, the parties may go to court.

Status after the 2026 Parliament

Many interim-government ordinances were reviewed by Parliament in April 2026, and some were re-enacted, amended or allowed to lapse. Before relying on the pre-case mediation requirement, confirm whether the 2025 ordinance has been re-enacted and which districts the scheme now covers. Information is available from the National Legal Aid Services Organisation.

Arbitration as alternative dispute resolution in Bangladesh

For commercial disputes, arbitration is often the preferred form of alternative dispute resolution in Bangladesh, particularly where one party is foreign. The Arbitration Act 2001 governs arbitrations seated in Bangladesh and the enforcement of foreign awards under the New York Convention. Parties can choose institutional arbitration, for example under the Bangladesh International Arbitration Centre rules, or international institutions such as the ICC or SIAC.

Arbitration offers a binding decision by an expert tribunal, confidentiality and limited grounds of challenge. It can, however, be expensive, and enforcement still runs through the courts. Our guides to the arbitration process in Bangladesh and to drafting an arbitration clause explain how to make arbitration work.

ADR in specialised fields

Bank loans

The Artha Rin Adalat Ain 2003 requires the court in bank loan suits to consider settlement through mediation before trial and allows settlement after the decree. Borrowers who come to mediation with realistic proposals often achieve rescheduling or reduced interest that the court could not order.

Family disputes

The Family Courts Act 2023 provides for reconciliation efforts before and after trial in disputes over dower, maintenance, restitution of conjugal rights, guardianship and custody. Combined with the pre-case mediation scheme, many family disputes now pass through mediation before any hearing. Our guide on the Muslim Family Laws Ordinance covers related arbitration council procedures for divorce and polygamy.

Labour disputes

The Bangladesh Labour Act 2006 provides for grievance procedures, conciliation by labour department officials and, where conciliation fails, arbitration or the Labour Court. Employers and workers who use these steps properly often resolve disputes without lengthy litigation.

Commercial courts

The Commercial Court Ordinance 2026 introduced pre-suit mediation for commercial disputes alongside new commercial courts, according to reports. Whether it has been re-enacted should be checked, but it signals a policy direction: alternative dispute resolution in Bangladesh is becoming the expected first step in commercial cases.

Village courts and local dispute resolution

For small disputes in rural areas, the Village Courts Act 2006 provides a local forum in each union parishad, chaired by the union parishad chairman with representatives nominated by the parties. Village courts can hear specified civil and criminal matters of limited value and are designed to be quick and inexpensive. Their decisions can be enforced and, in some cases, appealed. In municipal areas, the Conciliation of Disputes (Municipal Areas) Board Act 2004 provides a similar conciliation board for small disputes.

These local mechanisms are an important part of alternative dispute resolution in Bangladesh for ordinary people, especially for disputes over small sums, minor property damage and neighbourhood conflicts. Development partners have supported their activation in many districts. Parties should still check the limits of jurisdiction and seek advice for disputes involving land title or significant sums.

Traditional shalish

Informal community shalish remains common. It can help settle disputes, but it has no formal legal status and cannot impose binding penalties. Decisions that violate the law, particularly those affecting women's rights, are unlawful and can be challenged. Formal ADR routes offer the benefits of shalish with the protection of the law.

Alternative dispute resolution in Bangladesh for businesses

For companies, ADR is a risk management tool. A supply chain dispute, a payment default or a joint venture disagreement can be settled through structured negotiation or mediation long before positions harden. Businesses that build ADR into their contracts, train managers in negotiation and engage lawyers early usually spend far less on disputes than those that litigate by default.

Foreign investors in particular value predictable dispute processes. Combining a mediation step with arbitration seated in Dhaka or abroad, and keeping the option of urgent court relief, gives a balanced framework. Alternative dispute resolution in Bangladesh is also increasingly accepted by banks and public bodies, though public procurement rules and approval requirements can limit flexibility in government contracts.

Online and hybrid mediation

Since the pandemic, virtual hearings and online mediation have become more common. The 2025 legal aid ordinance expressly allowed virtual mediation. For parties abroad, online sessions can make mediation practical where travel would be costly. Make sure confidentiality, identity verification and document sharing are managed properly.

Choosing a mediator

The mediator's skill often decides the outcome. In court-annexed mediation, the judge or a panel mediator may conduct the session. In private mediation, parties can choose a retired judge, senior advocate or sector expert. Look for training, experience in similar disputes and a reputation for neutrality. A mediator who understands the commercial context, for example construction or banking, can help parties see realistic options quickly. Agree the mediator's fees, the venue, confidentiality and the timetable in a short mediation agreement before the first session.

Step-by-step: preparing for mediation

1. Understand your case. Assess strengths, weaknesses, likely costs and time to judgment with your lawyer.
2. Define your interests. Identify what you really need: payment, time, an apology, a continued relationship or certainty.
3. Set a range. Decide your best realistic outcome and the point at which litigation becomes better than settlement.
4. Prepare documents. Bring contracts, accounts, correspondence and calculations that support your position.
5. Bring authority. Make sure someone with authority to settle attends.
6. Engage constructively. Listen, propose options and avoid personal attacks; the mediator is not a judge.
7. Record the agreement. Put the settlement in writing with clear terms, deadlines and consequences of breach, in the form required to make it enforceable.

After the session, follow up promptly. If the parties are close to agreement, exchange a written draft within days while the momentum lasts. If mediation fails, the discussions are not wasted: parties usually understand each other's positions better, which narrows the issues for trial or arbitration and often leads to settlement later.

Enforcing settlements

In alternative dispute resolution in Bangladesh, a settlement is only as good as its enforceability. Court-annexed mediation settlements are recorded in a decree. Pre-case mediation agreements certified under the legal aid scheme were given the status of a final order by the 2025 ordinance. Private settlements outside these frameworks are contracts and may require a fresh suit if breached, unless parties record them through a consent decree or arbitral award.

Draft settlements carefully: identify the parties, the payments or actions required, deadlines, what happens on default and the withdrawal of pending cases. Vague settlements create new disputes. Where payment is by instalments, consider security, such as post-dated cheques or a guarantee.

Costs and timing

Alternative dispute resolution in Bangladesh, especially mediation, is generally far cheaper than litigation. Court-annexed mediation involves limited fees, and legal aid mediation is free for eligible parties. Private mediators and arbitral institutions charge fees, which are usually justified by speed in commercial cases. A mediation session can resolve in a day what might take years in court.

Not every dispute is suitable for alternative dispute resolution in Bangladesh. Cases requiring urgent injunctions, involving serious criminal conduct, raising important points of law or where one party is acting in bad faith may need court intervention first. Even then, ADR can follow once interim protection is in place.

ADR clauses in contracts

Businesses can build ADR into their contracts. Escalation clauses require negotiation between senior executives, then mediation, then arbitration or litigation. Such clauses should specify time limits for each stage, the mediator or institution, and the right to seek urgent court relief. Poorly drafted clauses lead to disputes about whether a party may start proceedings, so precision matters. Our mediation and ADR practice drafts and reviews these clauses.

Frequently asked questions about alternative dispute resolution in bangladesh

How we can help

We represent clients in every form of alternative dispute resolution in Bangladesh: court-annexed and pre-case mediation, arbitration, bank loan settlements, family reconciliation and commercial negotiations, and we draft ADR clauses and enforceable settlements. Learn more about our mediation and ADR practice.

Primary sources: the Code of Civil Procedure 1908, Legal Aid Services Act 2000, Arbitration Act 2001, Artha Rin Adalat Ain 2003 and Family Courts Act 2023 on the Laws of Bangladesh portal; the National Legal Aid Services Organisation; reporting in The Daily Star (22 July 2025) and Dhaka Tribune (17 September 2025).

This article is general information about Bangladeshi law as of October 2026 and is not legal advice. The status and coverage of the 2025 pre-case mediation ordinance and the Commercial Court Ordinance 2026 should be confirmed before relying on them.