TRW & Co · Shipping, port and admiralty
Charterparty Disputes: Arbitration, Liens and Arrest at Chattogram
In charterparty arbitration Bangladesh parties usually arbitrate in London or Singapore while the ship, cargo and money sit in Chattogram. This guide explains voyage and time charter claims, how arbitration clauses work, arrest as security for claims, section 7A interim relief, liens on cargo, freight forwarders' exposure and how awards are enforced in Bangladesh.
Key pointAn arrest to secure a foreign arbitration is legitimate, but in January 2026 the High Court Division vacated a Chattogram arrest without security because the charterer lacked title and had not disclosed its London arbitration clause.
At a glance
Seat usually abroad
Charters for ships calling at Chattogram commonly choose London or Singapore arbitration, while security and enforcement depend on Bangladeshi courts.
Arrest needs a link
Charter claims fall within the Admiralty Court Act 2000, but arrest in rem also needs the required connection between the person liable and the ship.
Disclose the clause
In January 2026 the High Court Division vacated the MV Telerig arrest, criticising non-disclosure of a London arbitration clause in the ex parte application.
Section 7A support
The High Court Division can grant interim measures in international arbitration; recent decisions apply this to foreign seats, though the point has been contested.
Foreign awards enforceable
Bangladesh is a New York Convention party, and the Arbitration Act 2001 lets foreign awards be enforced as decrees on limited grounds of refusal.
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The short answer: how charterparty arbitration Bangladesh parties face actually works
Most charterparty arbitration Bangladesh shipowners, charterers and receivers become involved in is seated abroad, usually in London or Singapore, while the ship, the cargo and the money sit in Chattogram. The arbitration decides who is right. Bangladeshi courts decide whether you can get security before the award and whether you can collect after it.
That split shapes every decision. A claimant may arrest a ship in the High Court Division's admiralty jurisdiction to obtain security, ask the same court for interim measures in support of a foreign arbitration, and later enforce the award under the Arbitration Act 2001. Each step has its own rules, and a misstep at one stage can undo the others.
This guide covers voyage and time charter claims, arbitration clauses, liens on cargo, arrest as security, freight forwarders' exposure and enforcement. For a live dispute, speak to our charter party dispute lawyers in Chattogram.
The claims that lead to arbitration
The type of charter decides who bears which risk, and therefore what the dispute is about.
- Voyage charters. Laytime and demurrage at the Chattogram anchorage, validity of the notice of readiness, lightering time, freight deductions and cargo shortage. Our demurrage claim lawyers handle the calculations.
- Time charters. Unpaid hire, off-hire during delays, speed and consumption claims, bunker disputes and orders to discharge without bills of lading.
- Contracts of affreightment. Failures to nominate cargo or vessels, minimum quantity shortfalls and rate disputes over a series of shipments.
- Lighterage and coastal contracts. Detention of lighters, short delivery and use of vessels as floating storage, often under Bangladeshi law and local arbitration or the courts.
Disputes rarely stay in one contract. A receiver's delay becomes the owner's demurrage claim against the charterer, who passes it down the sale contract and sometimes on to a lighterage operator. Mapping the whole chain early shows who will ultimately pay and in which forum.
The legal framework in Bangladesh
Three statutes shape any charterparty arbitration Bangladesh courts are asked to support: the Arbitration Act 2001, the Admiralty Court Act 2000 and the Contract Act 1872.
Arbitration Act 2001
The Arbitration Act 2001 is based on the UNCITRAL Model Law. It governs arbitrations seated in Bangladesh and the recognition and enforcement of foreign awards. Bangladesh is a party to the New York Convention, and the Act's foreign-award provisions allow a foreign award to be enforced in Bangladesh as if it were a decree of the court, with refusal limited to the grounds the Act sets out.
Section 7A, added in 2004, lets the High Court Division grant interim measures in international commercial arbitration, including injunctions and other protective measures. Whether it applies when the seat is abroad was long uncertain. The High Court Division refused interim relief for a foreign-seated arbitration in STX Corporation v Meghna Group, but in Southern Solar Power v Bangladesh Power Development Board (2019) it held that section 7A can support arbitrations outside Bangladesh, a view followed in later cases, as a Daily Star law commentary explains. Expect the point to be argued, and brief the court on the authorities.
Admiralty Court Act 2000
The Admiralty Court Act 2000 gives the High Court Division jurisdiction over a list of maritime claims, including claims arising out of agreements relating to the carriage of goods in a ship or to the use or hire of a ship. Most charter claims fall within it. An arrest in rem, however, also requires the link between the person liable and the ship that the Act requires, and that is where many charter claims fail.
Other law
The Contract Act 1872 governs locally governed charters and lighterage contracts. The Carriage of Goods by Sea Act 1925 applies the Hague Rules to outbound bills of lading, and many charters incorporate Hague or Hague-Visby terms by a clause paramount. The Commercial Courts Act 2026 created specialised commercial courts, but admiralty claims remain with the High Court Division.
Arrest as security for a foreign arbitration
For a claimant in a charterparty arbitration Bangladesh courts are asked to support, the attraction of Chattogram is the ship. An arrest can force the owner to put up security that will answer a London or Singapore award. Two recent decisions show both the power and its limits.
In the MT Gala suit, the High Court Division arrested a tanker in March 2022 over a non-delivery claim and, in August 2022, released her against a bank guarantee while directing the plaintiff to provide counter-security for interest. Its March 2025 order confirmed that the Act and the Admiralty Rules 1912 give a statutory power of arrest, that Bangladesh is not party to the 1999 Arrest Convention and that the English test for wrongful arrest applies.
In Admiralty Suit No. 61 of 2025, decided on 13 January 2026, a time charterer had obtained an ex parte arrest of the MV Telerig at the Chattogram outer anchorage, claiming the value of cargo withheld under a lien exercised abroad. The court vacated the arrest and released the ship without security. It held that the claim was in substance a cargo claim by a party without title, that the in rem conditions were not met, and that the charterer had failed to disclose a London arbitration clause when seeking ex parte relief.
Disclose the arbitration clause when you apply to arrest. An arrest to obtain security for a foreign arbitration is legitimate, but the court expects full and frank disclosure. Hiding the clause, or framing an arbitration claim as a local suit on the merits, can lose the arrest and expose the claimant to costs and damages.
Running a charterparty arbitration from Chattogram, step by step
The sequence for a typical charterparty arbitration Bangladesh claimants pursue against a ship calling at Chattogram is below. Timing depends on the ship's movements and the court's list.
- Read the clause. Identify the seat, rules, tribunal, governing law and any time bar in the charter and any bills of lading.
- Preserve evidence. Collect the charter, recap, statement of facts, notices of readiness, logs, hire statements and correspondence while memories are fresh.
- Locate the ship and owner. Confirm the vessel's IMO number, position and registered owner, and check whether the in rem conditions can be met.
- Decide on security. Choose between agreed security, an admiralty arrest or a section 7A application, depending on the claim and the counterparty.
- Commence arbitration. Serve the notice of arbitration in time and in the form the clause requires, so the time bar is protected regardless of the local proceedings.
- Manage the local action. If you arrest, plan for release terms, counter-security and a stay of the merits in favour of arbitration.
- Enforce. Once the award is made, call on the security or apply to enforce the award in Bangladesh under the foreign-award provisions.
Our guide to the ship arrest procedure covers the admiralty steps in more detail.
Security options, liens and forwarders
| Option | How it works | Strength | Limitation |
|---|---|---|---|
| Admiralty arrest | Warrant of arrest from the High Court Division in an action in rem | Detains the ship; strong leverage | In rem conditions must be met; disclosure duties; possible counter-security |
| Agreed security | P&I club letter or bank guarantee given voluntarily | Fast and cheap | Needs the other side's cooperation |
| Section 7A interim measures | Application to the High Court Division in support of the arbitration | Can reach assets other than ships | Applicability to foreign seats has been contested |
| Lien on cargo or sub-freights | Owner withholds cargo or claims sub-freights under the charter | Self-help; no court needed at first | Must be validly exercised; wrongful liens create counterclaims |
| Security from the arbitral tribunal | Tribunal orders security for the claim or costs | Within the chosen forum | Needs court support to enforce against an unwilling party |
Liens on cargo and sub-freights
Owners often exercise contractual liens on cargo or sub-freights for unpaid hire or freight. At Chattogram, where cargo is lightered at the anchorage and sold on to many receivers, a lien can quickly affect parties who never signed the charter.
In charterparty arbitration Bangladesh receivers are often drawn in through liens. A lien must be exercised in accordance with the charter and at a place where it is lawful and practical. Receivers who hold bills of lading may be bound by charter terms, including an arbitration clause, if the bill incorporates them effectively. Whether a lien was valid, and who can sue for the cargo, were exactly the questions behind the Telerig arrest. Our article on maritime liens and claims explains how statutory liens differ from contractual ones.
Freight forwarders' liability
Freight forwarders who issue their own house bills of lading or charter tonnage for their customers can find themselves liable as carriers rather than agents. A forwarder that books space on a chartered vessel may face claims from shippers under its house bill and in turn bring claims against the owner or charterer under the charter, potentially in different forums.
Forwarders should check that their terms limit liability effectively, that their back-to-back contracts point to compatible forums, and that their liability insurance covers carrier-type exposure. Cargo owners should identify whether the forwarder contracted as principal or agent before choosing whom to sue. Our article on bill of lading disputes covers standing and documents.
Illustrative scenario: unpaid demurrage at the anchorage
This scenario is illustrative only; the parties are generic.
A bulk carrier discharges grain at the Chattogram outer anchorage into lighters. Lighter shortages extend discharge well beyond laytime, and the owner claims demurrage from the voyage charterer, an overseas trading house. The charter provides for London arbitration under English law. The charterer disputes the notice of readiness and blames the receivers.
The owner's options are limited: the charterer has no ship of its own calling at Chattogram, so arrest in rem against the charterer is unlikely. The owner considers a lien on cargo still aboard, but most has already been discharged. It commences arbitration promptly and, through local counsel, examines whether a section 7A application could reach the charterer's receivables from Bangladeshi buyers. That course has to be weighed against the uncertainty over foreign-seated relief. Meanwhile the charterer prepares its own claim against the receivers under the sale contract. Getting the charterparty arbitration Bangladesh strategy right here depends on acting before the cargo and the money leave.
Risks and common mistakes
Arresting the wrong ship or for the wrong party
Arrest in rem depends on the claim, the ship and the relationship between the person liable and the ship at the relevant dates. A time charterer's claim against cargo interests, or a claim against a charterer who does not own the vessel, may not support an arrest at all. The Telerig decision shows the court will vacate an arrest that does not meet the conditions, without requiring security. Check title, ownership and the nature of the claim before filing.
Missing the arbitration time bar
Charterparties often include short time bars for demurrage claims and other specific claims, and the arbitration clause may require a particular form of notice. Local proceedings in Bangladesh, including an arrest, do not necessarily stop that time running. Serve a valid notice of arbitration early, even if you are negotiating security in Chattogram, and check whether supporting documents must accompany the claim.
Treating the local suit as the main event
Where the charter contains an arbitration clause, the merits belong to the tribunal. Pursuing the merits in a Bangladeshi suit invites an application to refer the dispute to arbitration and can waste money and time. Use the local court for what it does well: security, interim relief and enforcement. Our award enforcement lawyers can plan the end game from the start.
Exercising a lien without checking the charter
A lien exercised for sums not yet due, over cargo not covered by the clause or in a way the charter does not permit can expose the owner to claims for wrongful detention. Receivers who are not party to the charter may also bring claims in Bangladesh. Check the clause wording, the amounts due and the bills of lading before refusing to discharge.
Enforcement and the cross-border angle
A London or Singapore award is only as useful as the assets you can reach. Where the losing party is Bangladeshi, the award is enforced here under the Act's foreign-award provisions, and the court's role is limited to the grounds for refusal. Where it is foreign, security obtained in Chattogram or assets in other jurisdictions become critical.
Many charterparty arbitration Bangladesh disputes involve Bangladeshi importers as charterers or receivers, foreign owners and their P&I clubs, and trading houses in Singapore or Dubai. TRW & Co's offices in Singapore, Dubai and London can work with arbitration counsel abroad while our Bangladesh advocates appear in the High Court Division for arrest, interim relief and enforcement. See also our ship arrest lawyers.
What to do next: a checklist
- Read the arbitration clause, governing law and any time bars in the charter and bills of lading.
- Preserve the charter chain, statement of facts, notices and logs.
- Check the ship's ownership and whether the in rem conditions are met before arresting.
- Disclose the arbitration clause in any ex parte application.
- Serve the notice of arbitration in time, whatever happens locally.
- Consider liens, agreed security and section 7A relief as alternatives.
- Plan enforcement in Bangladesh and elsewhere from the outset.
For advice on a charterparty arbitration Bangladesh matter, contact TRW & Co's law firm in Chattogram through our contact page, at info@trw.co or on +880 1779 127165. We are at Room 4022, Annex 2, District and Sessions Judge Court Building, Court Hill (Porir Pahar), Kotwali, Chattogram 4000.
Frequently asked questions
01Can I arrest a ship in Chattogram for a London arbitration claim?
Often yes, if the claim falls within the Admiralty Court Act 2000 and the in rem conditions are met, including the required link between the person liable and the ship. The arrest provides security while the merits are decided in arbitration. You must disclose the arbitration clause to the court. In January 2026 the High Court Division vacated an arrest at Chattogram partly because a time charterer failed to disclose a London clause and lacked title to the cargo.
02Will Bangladeshi courts enforce a London or Singapore arbitration award?
Bangladesh is a party to the New York Convention, and the Arbitration Act 2001 allows a foreign award to be enforced as if it were a decree of the court. Recognition can be refused only on the limited grounds the Act sets out, broadly mirroring the Convention, such as incapacity, invalid agreement, lack of proper notice, excess of jurisdiction or public policy. Prepare certified copies of the award and arbitration agreement, with translations where needed.
03Can a Bangladeshi court grant interim relief for a foreign-seated arbitration?
Section 7A of the Arbitration Act 2001 lets the High Court Division grant interim measures in international commercial arbitration. Earlier decisions refused relief where the seat was abroad, but the High Court Division in Southern Solar Power (2019) and later cases held that section 7A can support foreign-seated arbitrations. The question has not been free from argument, so applications should be carefully prepared with the authorities in hand.
04Can a shipowner hold cargo at Chattogram for unpaid hire or freight?
A shipowner can exercise a lien on cargo or sub-freights if the charter provides for it and the lien is exercised properly, for sums due and over cargo covered by the clause. At Chattogram, where cargo is lightered and sold to many receivers, a lien can affect parties outside the charter. A wrongful lien exposes the owner to claims for detention and damages, so check the charter, the bills of lading and the amounts due first.
05What if a charterer sues in a Bangladeshi court despite an arbitration clause?
The other party can ask the court to refer the dispute to arbitration. The Arbitration Act 2001 supports referral where a valid agreement covers the dispute. Raise the point at the outset, before taking steps on the merits, to avoid arguments that the right to arbitrate has been waived. An admiralty arrest for security can still proceed alongside the arbitration if properly disclosed.
06Are freight forwarders liable under charterparty disputes?
They can be. A forwarder that issues its own house bills of lading or charters space for customers may be treated as a carrier rather than an agent, and face claims from shippers while having its own claims against the owner or charterer. Whether it is liable depends on its contracts and conduct. Forwarders should align their terms and forums with their charter arrangements and check their liability insurance.
Sources and official materials
- Admiralty Suit No. 61 of 2025 (MV Telerig), judgment of 13 January 2026 — Time charterer's arrest vacated; in rem conditions; disclosure of arbitration clause
- Admiralty Suit No. 08 of 2022 (MT Gala), order of 11 March 2025 — Statutory arrest power, counter-security and release on guarantee
- Arbitration Act 2001 (Bangladesh Laws) — Interim measures and enforcement of foreign awards
- Admiralty Court Act 2000 (Bangladesh Laws) — Maritime claims and actions in rem
- Applicability of the Arbitration Act 2001 to foreign arbitrations (The Daily Star) — STX, Southern Solar and section 7A relief for foreign seats
- Supreme Court of Bangladesh — High Court Division admiralty jurisdiction and judgments
General information only, current as at 2 November 2026. It is not legal advice and does not create an advocate–client relationship. It reflects the law of Bangladesh unless stated otherwise, and the law, court practice and official fees change frequently. Check current official sources and take advice on the facts of your matter.
