Mahbub & Company represented a US-based apparel sourcing and supply chain management corporation challenging BGMEA arbitration proceedings.
In a significant legal development in the apparel sector, the Company Bench of the High Court Division, presided over by Justice Md. Toufiq Inam, stayed ongoing BGMEA Arbitration proceedings involving a New York-based apparel sourcing and supply chain management corporation and two local manufacturers. The stay was granted on 17 August, 2026, in response to applications filed under Section 20 of the Arbitration Act, 2001, challenging the jurisdiction of the BGMEA Arbitration Tribunal.
The High Court has further directed the Secretary General of the BGMEA to present before the Bench to explain a letter sent to the sourcing company demanding payments under alleged “arbitral awards” and to explain whether BGMEA has authority to compel non-consenting parties to participate in its arbitration proceedings.
The foreign buyer challenged the proceedings as being initiated without lawful authority, primarily citing the absence of a written arbitration agreement between the parties. Under Section 9 of the Arbitration Act, 2001, and Article 1(3) of the BGMEA Arbitration Rules, 2016, a written agreement is a mandatory prerequisite for the invocation of such arbitral proceedings. The petitioner argued that without consensual written terms, the BGMEA lacks the jurisdiction to proceed with or decide the matters.
The dispute involving originated from a dispute involving claims regarding alleged export dues and compensation from the supplier’s side and claims of delays and failure to supply from the buyer’s side. Prior to that the High Court was issued had show-cause notices to the respondents, requiring them to explain why the proceedings should not be declared void for lack of jurisdiction.
The US-based sourcing company is represented in the High Court by Saqeb Mahbub, Partner, and M Parvez Rana, Associate, Mahbub & Company.
