In 1971, when Bangladesh won its war of liberation, the fledgling state’s key foreign policy aim was to obtain legal recognition under international law. Having successfully achieved that recognition from most United Nations member states within the span of a few months of its independence, Bangladesh began to play a key role in the international arena. Over the next five decades Bangladesh has helped shape international law with its active participation in the resolution of various international disputes.

A birth that disrupted international law

At the time of Bangladesh’s birth in 1971, the world was divided into spheres of influence created by the Cold War rivalry between the United States and the Soviet Union. In such a geopolitical context, the creation of Bangladesh as a sovereign state was a unique phenomenon that shaped various aspects of international law. In particular, two core principles of international law were disrupted and reshaped by the birth of Bangladesh: (i) the right to self-determination; and (ii) the right to use force for humanitarian intervention.

Self-determination was recognised in the United Nations Charter in 1945 as the right of a people to determine its own destiny. This right was essentially recognised in the context of decolonisation that followed World War II. While international law recognised the right of self-determination, it did not expressly recognise a right of secession. The people of Bangladesh were the first to push the international legal boundary of self-determination beyond the context of decolonisation and to establish an independent country by breaking away from another sovereign country. Bangladesh was seen as a shining example for peoples around the world, such as Palestinians, who aspired to exercise their right to self-determination in an independent state of their own.

The people of Bangladesh were the first to push the international legal boundary of self-determination beyond the context of decolonisation and to establish an independent country by breaking away from another sovereign country.

A second principle of international law that was established in 1971 was the right to the use of force for humanitarian intervention. The United Nations Charter prohibits the use of force by one state against another state. The only exceptions to the prohibition on the use of force are (i) the use of force in self-defence and (ii) when such force is authorised by the United Nations Security Council. The use of force in 1971 by India against Pakistan, in aid of the people of Bangladesh, is seen as the first instance of humanitarian intervention by one state in the territory of another. Subsequently, international law has recognised the concept of humanitarian intervention and used it as justification for use of force in other situations, such as that for the Kurds in Iraq during 1991 when US-led forces enforced no-fly zones, or in Kosovo during 1999 when North Atlantic Treaty Organization forces intervened with military force to protect the civilians.

Impact of Bangladesh’s foreign policy on peace and justice

Under the leadership of Bangladesh’s first president, Bangabandhu Sheikh Mujibur Rahman, the country’s foreign policy began to take shape from 1972 onwards. He believed that Bangladesh could be the “Switzerland of the East.” The bedrock of this foreign policy – friendship towards all and malice towards none – was elucidated in Sheikh Mujibur Rahman’s maiden speech to the UN General Assembly in 1974. He explained that Bangladesh had been pursuing a non-alignment policy since its inception. Bangladesh’s complete commitment to peace had emanated from the realisation that only in a peaceful environment could the fruits of independence be fully enjoyed. A peaceful environment could facilitate the use of scarce resources to tackle the scourges of poverty, disease and unemployment. He noted, “Peace is an imperative for the survival of mankind; it represents the deepest aspirations of men and women throughout the world. Peace to endure must, however, be peace based upon justice.” It is the evolution of this policy that has eventually enabled Bangladesh to play such a key role in UN peace-keeping operations around the world.

Disputes with India and Myanmar in the Bay of Bengal

Another key objective of Bangladesh’s foreign policy, outlined in Sheikh Mujibur Rahman’s 1974 speech, was to maintain peace in the Indian Ocean. In pursuit of this aim, Bangladesh has now successfully resolved maritime boundary disputes in the Bay of Bengal with both its neighbours, India and Myanmar. This was achieved through two separate international arbitration cases. However, what prompted Bangladesh to act, after years of ineffective diplomacy, was the real threat of Bangladesh entering into armed conflicts with both Myanmar and India over the maritime dispute.

In 1974, Bangladesh and Myanmar had reached an understanding regarding the delimitation of the territorial boundaries in the Bay of Bengal to a distance of up to 12 nautical miles from their coastlines. Over the next three decades, Bangladesh had permitted Myanmar’s vessels free and unimpeded navigation through waters around the southern island of St Martin’s up to the Naaf River. But, despite extensive negotiations, the two states were unable to agree on the delimitation of the boundary in the exclusive economic zone and the continental shelf areas of the Bay of Bengal.

In late 2008, tensions in the Bay of Bengal reached an all-time high when Bangladesh and Myanmar faced the real prospect of a naval conflict, arising from natural gas exploration being conducted by a South Korean company, Daewoo, on behalf of Myanmar, in territorial waters claimed by Bangladesh. To defuse the tension, Bangladesh sought the help of international law and submitted its claim to the UN’s Commission on the Limits of the Continental Shelf (CLCS).

Having failed to resolve the issues bilaterally, Bangladesh took the bold decision in 2009 to initiate arbitration under the UN Convention on the Law of the Sea (UNCLOS) to secure the delimitation of its maritime boundaries with Myanmar. In 2012, Bangladesh received a significantly favourable judgement from the mandated intergovernmental organisation, the International Tribunal for the Law of the Sea (ITLOS). Through this judgement, Bangladesh established sovereign rights over a 200 nautical mile exclusive economic zone in the Bay of Bengal, and to a substantial share of the waters denoted as “outer continental shelf.”

A landmark maritime boundary dispute in the Bay of Bengal, between Bangladesh and India, had a similar trajectory. The origins of the disputed waters can be traced back to the partition of the Indian subcontinent in 1947, when a consultative committee, known as the Radcliffe Bengal Boundary Commission, established the boundaries of the soon-to-be independent states. The maritime boundaries between India and Bangladesh (which was then East Pakistan) were contested by both the states for decades. However, the dispute escalated in 2006 through the invitation by India for international bids in some 15,000 km2 of territory in the Bay of Bengal claimed by Bangladesh.

The dispute came close to an armed conflict when, in December 2008, the Bangladesh navy confronted two Indian vessels entering into the disputed waters in the Bay of Bengal. In 2009, despite India’s clear intention of settling the dispute bilaterally, Bangladesh took the bold step of initiating an arbitration case against its largest neighbour, India, to resolve the maritime boundary dispute. This dispute was resolved in 2014 by an international tribunal at the Permanent Court of Arbitration (PCA) in The Hague. Bangladesh was granted 76% of the disputed waters. This ended the international dispute in a manner that may be considered very favourable for Bangladesh. It is unlikely that such a result could have been achieved through diplomacy.

The Rohingya issue at the International Criminal Court

A major international crisis, which Bangladesh has been reluctant to raise before international courts, involves the crimes committed on the Rohingya people by Bangladesh’s south-eastern neighbour, Myanmar. Myanmar’s military has undeniably committed atrocities against the country’s ethnic Rohingya people. The abuses, which included murder, rape and arson, reached astounding levels during a brutal ethnic cleansing campaign in August 2017. This military action forced more than 740,000 Rohingya to flee to Bangladesh.

It is important to understand that Bangladesh had ratified the ICC Rome Statute in 2010, which gives the ICC jurisdiction over international crimes committed within Bangladesh.

In November 2019, the International Criminal Court (ICC) in The Hague opened an investigation into alleged crimes against humanity, such as deportation and acts of persecution, committed against Myanmar’s Rohingya population. It is important to understand that Bangladesh had ratified the ICC Rome Statute in 2010, which gives the ICC jurisdiction over international crimes committed within Bangladesh. Even though Myanmar is not a party to the Statute, the ICC decided that it had jurisdiction over the crimes because the alleged criminal conduct took place partly in Bangladesh, given the forced deportation of the Rohingya into Bangladesh’s territory.

Bangladesh, as a state party to the ICC’s Rome Statute, has a legal obligation to cooperate fully with the ICC. Thus, even though Bangladesh did not actively take the issue to the ICC, it did make representations to the ICC and would mostly like provide the cooperation needed to establish that crimes against humanity were committed against the Rohingya.

At the International Court of Justice  

In 50 years of independence, Bangladesh has not initiated any case before the International Court of Justice (ICJ). However, Bangladesh has been indirectly involved in the ICJ case against Myanmar, although the case was initiated by The Gambia with the backing of Canada, the Netherlands and the Organization of Islamic Cooperation (OIC). Bangladesh has provided not only technical and moral support but also, in 2020, financial support to the case. The Gambia has alleged that Myanmar’s atrocities against the Rohingya violate various provisions of the Convention on the Prevention and Punishment of the Crime of Genocide (“the Genocide Convention”).

In previous cases, the ICJ has declared that all member states of the Genocide Convention have a duty to prevent and to punish genocide. The Gambia, which ratified the Convention in 1978, brought the case under Article 9, which allows for disputes between parties related to genocide to be brought before the ICJ. Myanmar has also been a party to the Genocide Convention since 1956. In January 2020, the ICJ made the unanimous decision to order provisional measures to prevent further acts of genocide against the Rohingya in Myanmar. This, seeking justice for the Rohingya, was also a significant victory for Bangladesh.

At the World Bank’s International Centre for the Settlement of Investment Disputes

International Centre for the Settlement of Investment Disputes (ICSID) is an international arbitration institution established specifically to resolved disputes between foreign investors and host states. Bangladesh is a party to the ICSID Convention and, over the past 50 years, has had seven arbitration cases brought against it. Three out of the seven disputes have concluded and the rest are pending. All these disputes have related to the energy sector in Bangladesh.

Scimitar Exploration Limited v. Petrobangla was the first ICSID case for Bangladesh. Scimitar initiated the case in 1992 and Petrobangla, a state-owned company, challenged the jurisdiction of the ICSID on the grounds that the case was initiated without proper authorisation. At a hearing on jurisdiction, Scimitar claimed that, because of a change of ownership of Scimitar, it no longer wished to oppose the objections of Petrobangla. Thus, Bangladesh eventually won its first ICSID case without a contest.

The second ICSID case Bangladesh faced was Saipem v. Bangladesh, in 2005. Saipem, an Italian company, had built a gas pipeline in Bangladesh, and a dispute arose with Petrobangla regarding the compensation due. The dispute was first referred to an arbitration supervised by the International Chamber of Commerce (ICC). Petrobangla, instead of contesting the matter in the ICC, obtained an injunction on the ICC case from a Bangladeshi court. In other words, Petrobangla attempted to revoke the power of the ICC tribunal.

International Centre for Settlement of Investment Disputes (ICSID) Headquarters, Washington, D.C., USA, 30th June, 2017. | Photo by Otylia Babiak/World Bank.

After a set of legal battles, Saipem filed an ICSID arbitration. An ICSID tribunal issued a verdict against Bangladesh in 2009 stating that the interference by the Bangladesh judiciary in an international commercial arbitration under the ICC rules amounted to expropriation by the state. Despite the loss, Bangladesh accepted ICSID’s decision and did not to seek any further legal remedy. The findings of the ICSID Tribunal in the Saipem case have been the subject of severe criticism. It is likely that Bangladesh did not have the appetite to fight the case further or lacked the expertise for further redress.

In 2010, Chevron v. Bangladesh became the first ever case that Bangladesh truly fought and won at ICSID. The dispute centred on the interpretation of a contract between the multinational energy company, Chevron, on the one side and Bangladesh on the other. A disputed clause in the contract had allowed Petrobangla to charge a 4% tariff to Chevron for using Petrobangla’s pipelines. In this case, Bangladesh, at the final stages, ramped up its legal team to win a losing battle. The case was a good learning experience for Bangladesh.

Niko v. Petrobangla and Niko v. BAPEX are two related ICSID arbitration cases currently being heard by the same ICSID Tribunal. These cases are among the longest-running cases in the history of ICSID and have been going on since 2010. In February 2020, after over a decade of arbitration proceedings, Bangladesh defeated efforts by the Canadian exploring company Niko to avoid liability for a blowout caused in 2005 at the Chattak field in northern Bangladesh, where Niko was carrying out drilling operations. In a unanimous decision, ICSID found that Niko’s breaches of the contractual obligations had led to the blowout. In light of this decision, Niko has to give compensation. A damages phase of the arbitration will continue to determine the quantum of Niko’s compensation. The hearing for the damages phase will be held in Paris, France during August 2021.

The Niko case is the first instance in the 50-year history of Bangladesh that a foreign company has been held liable by an international tribunal for causing damage to the country through its negligent operations.

Policy lessons from 50 years

Bangladesh has pursued a foreign policy that is reliant primarily on diplomacy to resolve disputes amicably, rather than resorting to dispute settlement methods such as arbitration. This soft approach has been largely successful in situations such as the resolution of the Ganges River water-sharing issue with India. Not surprisingly, even in instances where Bangladesh has resorted to international arbitration, the results have been positive.

In the field of international law, the biggest challenge for Bangladesh would be to change the mindset towards international institutions, tribunals, and courts. Bangladesh’s experiences highlight that international dispute resolution forums are not necessarily platforms to be avoided. On the contrary, they may be effectively utilised to resolve long-standing disputes in an amicable manner. From the lessons learnt in the past 50 years, Bangladesh will need to appreciate that the international courts can be a good alternative to diplomacy. Letting disputes fester over time in the name of diplomacy usually ends up costing the state more in the long run.

Concerns are raised about the expensive nature of legal fees of arbitrations incurred by a developing country such as Bangladesh. This may be the case. But it cannot be denied that armed conflicts arising from unresolved issues, or mounting interests from large unresolved claims, often cost more than lawyers.

The key lesson for the energy sector of Bangladesh from the Niko arbitration cases is clear: there needs to a standardised regulatory framework for operators, both foreign and local, to operate in Bangladesh. Such a framework would also outline the compensation for damage to Bangladesh’s resources.

In addition, negotiation capacity of Bangladeshi state-owned entities needs to be enhanced. The negotiation process of large contracts needs to be above board. It is vital to ensure that officials in negotiations are not over-stretched or under-resourced. Going forward, Bangladesh needs to ensure that the legal departments of the relevant state-owned companies are able to hold their ground in negotiations with their international counterparts. To achieve these results, institutional bottlenecks and weaknesses need to be identified and resolved.

Bangladesh needs to be actively involved in international law-making processes. For instance, despite frequent invites, Bangladesh does not attend the United Nations Commission on International Trade Law (UNCITRAL) Working Group on the Investor–State Dispute Settlement Reform. These sessions allow great opportunities for countries, such as Bangladesh, to influence the international legal regime that will bind Bangladesh. Failing to effectively participate in these sessions also means that Bangladesh is not building up the legal expertise required in future arbitrations. The first step to address this inaction may be to look into the problem with inter-ministerial bureaucracy and lack of cohesion between the three relevant ministries: law, commerce, and foreign affairs.

As Bangladesh moves beyond its 50th birthday, the state will have to play a more active role in the field of international law. Bangladesh is emerging as a strong vibrant economy with trading relationships with different states. Going forward, it is certain that Bangladesh will be more involved with international dispute resolution. For its national interests, the country will have to build institutions dealing with international law. For instance, Singapore’s government has set up an international law wing that deals centrally with all international law issues. An initiative like this expands institutional knowledge. It also ensures that all entities of the state are on the same page. In the future, Bangladesh may consider adopting a similar institutional model. In fact, it is not too early to start preparing for it now.

 

 

Photo ©️ Mahmud Hossain Opu
Moin Ghani
Moin Ghani is Partner and Co-Head at Alliance Laws. He is a lawyer. He is an advocate at the Supreme Court of Bangladesh. He specialises in international investment law, arbitration law and large-scale investment projects. He was a Fulbright/Humphrey Fellow at the American University and worked at Foley Hoag LLP and Eversheds LLP. He assisted the Bangladesh government with international arbitration cases at the World Bank’s ICSID. He worked for Philippines in its maritime dispute with China, for Ecuador in an international arbitration under the UNCITRAL arbitration rules and for Venezuela in an ICSID arbitration. He pursued his graduate studies in law at the London School of Economics and was called to the Bar of England and Wales from Lincoln’s Inn.