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When the Government Gets It Wrong: Legal Remedies for Foreign Investors in Bangladesh

You have invested millions in Bangladesh. Then a letter arrives: your licence is suspended, your permission is cancelled, your concession is terminated, or a tax holiday you were promised is suddenly denied. Often there is no hearing and no real reason. Every foreign investor fears that moment.

The good news is that Bangladeshi law gives you real, enforceable remedies, and the Supreme Court has used them again and again on behalf of foreign investors. Its High Court Division has quashed arbitrary cancellations, ordered regulators to decide applications they had ignored, struck down unlawful charges and tax demands, and protected long-term concessions while arbitration went ahead.

This article explains, in plain language, what those remedies are, when each one applies, and what you should do the moment a government decision threatens your investment.

Your legal shield

Two sources of law protect you. Together they bind every ministry, regulator and statutory authority.

1. The Foreign Private Investment (Promotion and Protection) Act, 1980. This is the law written specifically for you, and two of its sections matter most:

Section 4: the Government "shall accord fair and equitable treatment to foreign private investment which shall enjoy full protection and security in Bangladesh."

Section 5: the terms of any sanction, permission or licence granted to an undertaking with foreign investment "shall not be unilaterally changed so as to adversely alter the conditions" on which it was sanctioned. Foreign investment may not be treated less favourably than similar local investment.

The courts treat these sections as enforceable law, not just policy statements. In Northpole (BD) Ltd. v. BEPZA (57 DLR 631), the High Court Division held that a regulator's refusal to decide a foreign investor's application "clearly goes against" these provisions.

2. The Constitution of Bangladesh. Article 31 guarantees everyone the protection of the law and the right to be treated in accordance with law. The High Court Division has held that this extends to foreigners and to companies registered in Bangladesh. Article 27 (equality before law) and Article 40 (freedom of trade and business) also protect investors. Article 102 gives the High Court Division the power to enforce all of them.

All public authorities are held to the same standards: they must act lawfully, fairly and reasonably, give reasons, and not discriminate.

Remedy one: the writ petition under Article 102

A writ petition is filed directly in the High Court Division of the Supreme Court. It asks the court to declare a government decision unlawful and of no legal effect, to quash it, or to order an authority to do its legal duty. Interim relief, such as a stay of the decision, can often be obtained at the first hearing.

Can a foreign company file one?

Yes. Governments sometimes argue that a foreign-owned company is not a "citizen" and so cannot come to court. The High Court Division rejected that argument in Northpole. A foreign company may not be able to enforce the fundamental rights in Part III of the Constitution under Article 102(1). But it can apply under Article 102(2) as a "person aggrieved" by any authority that fails to act in accordance with law.

What can be challenged?

The cases show the range of government action the court will review:

Cancellation of a permission you have already acted on. In HKD International (CEPZ) Ltd. v. BEPZA (19 BLC 298), BEPZA cancelled a no-objection certificate after the investor had relied on it to restructure. The court set the cancellation aside. Having made the promise and let the investor act on it, BEPZA was bound by promissory estoppel, and a vague reason ("it seems to the Authority") was not enough.

Silence and delay. In Northpole, a 100% foreign-owned manufacturer that had invested USD 6 million waited years for a decision on a product licence. The court held that "a person may be treated to his detriment not only by action but also inaction". It ordered the regulator to decide within two months.

Unlawful charges and changed conditions. In Universal Jeans Ltd. v. BEPZA (20 BLC 643), BEPZA ordered EPZ factories to remove generators it had earlier approved unconditionally and billed a 10% "service charge" for power the factories produced themselves. The court quashed both. A statutory authority can charge only for services it actually renders, and it cannot unilaterally withdraw an approval investors have relied on.

Withdrawal of promised tax incentives. In Bureau Veritas v. Government of Bangladesh (30 BLC 337), the tax department denied a foreign-owned laboratory in an EPZ the 10-year tax holiday promised to "all industries" there. The court quashed every assessment and demand and prohibited further proceedings. It did not insist that the investor first exhaust the statutory tax appeals, because the authority had acted beyond its jurisdiction.

Obstruction by a body acting under government control. In UTI Pership v. Bangladesh (24 BLC 743), a trade association refused to renew a foreign freight forwarder's membership, without which its customs licence would lapse. The court relied on the Government's duty under section 4 of the 1980 Act and directed renewal.

Unfair tender and licensing decisions. In Ekushey Television (54 DLR (AD) 130) and SSA Bangladesh (24 BLD (AD) 92), the Appellate Division confirmed that the court will examine how a tender, licence or concession was awarded. Hidden changes to evaluation reports, secret conditions and the absence of competitive bidding all make a decision unlawful. These were challenges against investors who had benefited, but the same principles protect a foreign bidder that has been unfairly passed over.

What the court will not do

The writ court reviews legality, fairness and process. It does not take over policy-making. In Abul Khair Tobacco (2020), it refused to hold the Government to a budget speech, because fiscal policy may change from year to year. It did strike down a retrospective repeal that would have wiped out rights that had already accrued. A sound writ case is therefore built on a concrete decision that is unlawful, unfair or beyond the authority's power, not just on a change of policy you dislike.

Remedy two: when your dispute is about a contract

Many investors deal with the Government through contracts: power purchase agreements, concession agreements, leases, joint-venture undertakings. Here the courts draw an important line.

The general rule: no writ for a pure breach of contract

In Karnafully Fertilizer Co. Ltd. v. Government of Bangladesh (40 BLD 438), a major international joint venture argued that the Government had broken written "assurances" by leasing land promised for its expansion to another company. The High Court Division refused to intervene by writ, holding the dispute contractual. Following the Appellate Division, it said a writ for breach of contract lies only where:

the Government entered into the contract in its sovereign capacity;

the obligation arises from a statutory duty, sovereign obligation or public function;

the contract is a statutory contract;

the public authority contracted under statutory power; or

the relief sought is against a breach of statutory duty.

The lesson is that the way your documents are drafted matters. In Karnafully, the court held that the assurances were given by the Government as a shareholder and were not executed in the President's name under Article 145. They therefore created contractual rights only. Investors negotiating State guarantees should bear this in mind before signing.

The line is not always against you. Where a contract or licence was won or cancelled through an unlawful process, the Appellate Division has held that the challenge is to the public-law decision, not to the contract terms, and a writ lies (Ekushey Television).

Arbitration, and interim protection from the court

Most government contracts with foreign investors contain an arbitration clause, and arbitration is usually the proper route for contract disputes. The real risk is that the authority terminates the contract, takes back the site or cashes your security before any tribunal exists.

Section 7A of the Arbitration Act, 2001 deals with that risk. It allows the court to make interim orders, including injunctions and orders preserving property, before, during and after arbitration.

In Jamuna Resort Ltd. v. Bangladesh Bridge Authority (36 BLD 561), a foreign-invested company held a 30-year tourism concession. The Bridge Authority cancelled it on seven days' notice, although the contract required three months to cure any default. The High Court Division held that arbitration had begun when the notice of arbitration was served and restored protection of the concession. It also held that a foreign-invested concession could not be ended in such an arbitrary way, given the 1980 Act.

In Southern Solar Power Ltd. v. BPDB (16 ALR (HCD) 91), the arbitration was an ICC arbitration seated in Hong Kong. The High Court Division held that section 7A applies to foreign-seated arbitration too. It restrained BPDB from terminating the power purchase agreement for 60 days, so that the investor could seek relief from the arbitral tribunal.

Be aware of one limit. Bangladeshi courts will not normally stop the encashment of an unconditional, on-demand bank guarantee unless there is clear fraud. Southern Solar applied that rule. Negotiate the wording of any performance security carefully.

Remedy three: if you are bidding in a government tender

International companies regularly bid for Bangladeshi public contracts: roads, power plants, ports, IT systems and supplies. A bid can be lost unfairly at many stages: rigged evaluations, conditions applied to some bidders and not others, a contract handed to a favoured party without open competition. The law gives bidders both rights and remedies.

Your rights as a bidder

Equal treatment. Every bidder must compete on the same terms. In Ekushey Television (54 DLR (AD) 130), the Appellate Division held that any later change to the terms and conditions of a tender "must be relayed to each and every participant". Changes kept secret from some bidders discriminate against them and make the process unlawful.

Evaluation by the stated criteria, openly recorded. In the same case, the technical committee's report was quietly rewritten to move a rejected bidder to the top, "subject to conditions" no one was told about. The award was quashed. The court will not re-mark bids, but it will always review "the manner and procedure" of the evaluation. It can order the authority to produce its files.

Open competition for public contracts and concessions. In SSA Bangladesh (24 BLD (AD) 92), a port concession was approved for one company without competitive bidding, while other international operators who had shown interest were ignored. The courts held that State contracts and largess must normally be awarded through competitive bids. They also held that awarding them by private negotiation without advertisement denies others an equal opportunity, contrary to Articles 27, 31 and 40 of the Constitution.

Standing as a foreign company. A foreign bidder can come to the High Court Division under Article 102(2) as a "person aggrieved" (Northpole). Its right under Article 31 to be treated in accordance with law extends to it.

Donor-funded projects. Where a project is financed under an agreement with a development partner (World Bank, ADB, JICA and others), the lender's procurement guidelines can prevail over national rules. Check which rulebook governs your tender.

Remedy step 1: the statutory complaint procedure

The Public Procurement Act, 2006 and the Public Procurement Rules, 2008 (Rules 56 to 60) set out a complaint and appeal procedure. The time limits are very short and are strictly enforced:

Complaint to the Procuring Entity: in writing, within 7 calendar days of becoming aware of the problem. The Procuring Entity has 5 working days to respond.

Head of the Procuring Entity: within 3 working days after that period ends, if you are not satisfied.

Secretary of the Ministry or Division: within 7 working days after the Head's period ends. The Secretary decides within 5 working days.

Review Panel: an appeal within 7 working days of the Secretary's decision, with a security deposit and registration fee. The Panel decides within 12 working days. On a properly filed appeal, it asks the Procuring Entity to keep the notification of award suspended until it decides.

Missing a deadline can be fatal. In Shohoz-Synesis-Vincen JV v. CPTU (16 SCOB [2022] HCD 25), the High Court Division stressed that a complaint must state the date of the cause of action. It held that bidders learn of rival offers when tenders are opened in their presence, so time starts running from then.

Remedy step 2: a writ petition in the High Court Division

The Review Panel is not the last word. The High Court Division has quashed Review Panel decisions that were unlawful:

In Shohoz-Synesis-Vincen JV, the Panel's decision recommending a re-tender was declared without lawful authority because the Panel failed to decide the limitation question properly.

In Roots Developments Ltd. v. Review Panel-2, BPPA (Writ Petition No. 6624 of 2024, judgment of 13 August 2025), the court quashed a Panel decision. The Panel had sat with two members when the Rules require at least three, and it had gone beyond its powers, which under Rule 60(3) are limited to making recommendations.

Where a tender decision is mala fide, discriminatory or made without lawful authority, the High Court Division can also review the decision itself under Article 102, as Ekushey Television and SSA Bangladesh show. Courts generally expect bidders to use the statutory complaint route first, so take advice early on which path to follow.

Once a contract has been signed, disputes about its performance usually move to arbitration or the civil courts (see Remedy two).

Procurement law in Bangladesh has recently been amended. Check the current text of the Act and Rules, and the Bangladesh Public Procurement Authority guidance, for your tender.

Which remedy fits your problem?

What to do the moment a problem arises

Act quickly. The court can refuse relief for unexplained delay, especially if others have acquired rights in the meantime. For tender complaints, the first deadline is only 7 calendar days. Early action also means a stay can be sought before a cancellation or termination takes effect.

Keep the paper trail. Licences, approvals, NOCs, correspondence, show-cause notices and your replies are your evidence. In HKD International, the authority's own earlier letters decided the case.

Answer show-cause notices in writing and ask for a hearing. A considered reply protects your position, and an authority's failure to deal with it strengthens a later challenge.

Document your reliance. Record the investment, hiring and commitments you made on the strength of each approval. Promissory estoppel and the 1980 Act's protection against unilateral change both depend on showing that you relied on what you were told.

Check the contract before you litigate. Find out whether there is an arbitration clause, any notice or cure periods, and any tiered dispute-resolution steps. The right forum, and the right first step, depend on it.

Secure interim protection first. Whether by a writ stay or a section 7A injunction, preserving the status quo is often what decides the outcome.

Get advice before signing, too. How a government undertaking is executed, and how your performance security is worded, can decide years later whether you have a remedy at all.

How Justice Corner can help

A government decision against your business is not the final word. Bangladesh's courts have shown, over two decades of decisions, that they will hold public authorities to the law, the Constitution and the promises made to foreign investors.

Justice Corner advises foreign investors and joint ventures at every stage:

reviewing a notice, cancellation or demand and identifying the strongest remedy;

filing tender complaints and Review Panel appeals within the strict procurement deadlines;

filing writ petitions and seeking urgent interim stays in the High Court Division;

obtaining section 7A protection and conducting domestic and international arbitration against public bodies;

reviewing licences, concession agreements, government undertakings and bank guarantees before you sign, so your remedies are built in from the start.

If a government decision is affecting your investment, contact Justice Corner as early as possible. In these cases, the first few days often matter most.

This article is for general information only and is not legal advice. Every case turns on its own facts and documents; please seek specific advice on your situation.