Bangladesh - Chapter 2 - Force Majeure and Hardship in the Asia-Pacific Region

Md. Monzur Rabbi is practising as an Advocate of the Supreme Court of Bangladesh and currently functioning as the Head of Chambers of Rahman & Rabbi Legal, his law chambers based in Dhaka. He is a Member of the Honorable Society of Lincoln’s Inn and was called as a Barrister to the Bar of England and Wales (non-practising in UK). He did his post-graduation on international arbitration from University of Miami, USA with a Fulbright scholarship. He has been assisted by Rifat Zabeen Khan in researching for this chapter.

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Originally from Force Majeure and Hardship in the Asia-Pacific Region

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Questions

I. Force majeure

A. Background and definition of force majeure in Bangladesh

1. Does Bangladesh recognize force majeure or any other legal concept similar to force majeure such as frustration, etc. (in the following: “force majeure”)? Are there any statutory provisions or is there any case law setting forth the definition of force majeure?

The general governing legislation or legislative framework concerning contractual obligations and contractual remedies in Bangladesh is predominantly inherited from its colonial rulers. Though the term “force majeure” remains absent in the Bangladeshi general legislative framework, the trace of this concept is somewhat malleably found in some provisions of the Contract Act, 1872 (the Contract Act); section 32 of the Act talks of an uncertain future event or event that becomes impossible, the happening of which would make the contract void and would allow the non-performance of contractual obligations, whereas section 56 of the Contract Act declares the contract void, absolving the parties from their contractual responsibilities on the ground of the subsequent impossibility or illegality of the promised act. The only statute to explicitly recognize the concept of force majeure is the Customs Act, 1969 where in contrast to its wide common law usage it stands to serve a very specific purpose, i.e., the abatement of customs duty. The Customs Act incorporates the term to refer to an act of God; where the common law list of force majeure includes all sorts of events that are non-foreseeable and are beyond the control of the parties and which prevents, impedes, or delays the performance of the contract.

However, the “Standard e-Tender Document (STD) (National) For Procurement of Works” published by the Central Procurement Technical Unit (“CPTU”), the Implementation, Monitoring, and Evaluation Division (IMED) of the Ministry of Planning, Bangladesh, for the effective implementation of the provisions of the Public Procurement Act 2006 and Public Procurement Rules 2008 discussed the concept of force majeure in detail within the General Conditions of Contract (GCC). It defines force majeure as an event or situation beyond the control of the party that is not foreseeable, is unavoidable, and whose origins are not due to negligence or a lack of care on the part of the party; such events may include, but not limited to, acts of the government in its sovereign capacity, wars or revolutions, fires, floods, epidemics, quarantine restrictions, and freight embargoes or more, as included in GCC Clause 85. The enumerated list of force majeure events of the GCC is more aligned with its wide common law concept. Furthermore, the GCC discusses the procedure respecting providing notice under a force majeure, as well as the consequences of force majeure and how it releases/discharges the parties from the performance of the contract.