World Bank Office, Dhaka and others v. Ismet Zerin Khan

The case arose from an employment dispute between Ismet Zerin Khan, an External Affairs Officer employed at the World Bank’s Dhaka Office, and the World Bank. Following the non-confirmation and termination of her appointment during the probationary period in 2001, Khan brought a civil action before the Bangladeshi courts seeking a declaration that the termination was unlawful, violated ‘principles of natural justice’, and entitled her to reinstatement with arrears of salary. The World Bank contested the suit, arguing that it was barred by the immunity regime incorporated into Bangladeshi law in 1972, which gives domestic effect to Article VII of the 1945 Articles of Agreement of the International Bank for Reconstruction and Development. It further contended that the claimant had exhausted internal remedies before the World Bank Administrative Tribunal, which had already awarded her compensation.

Both the Trial Court and the Appellate Court rejected the immunity objection and granted declaratory relief in favour of the claimant, holding that the termination was unlawful and effected in violation of procedural fairness. The World Bank subsequently sought revision before the High Court Division of the Supreme Court of Bangladesh, challenging the jurisdiction of Bangladeshi courts on the basis of immunity and the alleged finality of internal dispute-settlement mechanisms.

The High Court Division confirmed its limited revisional competence and upheld the concurrent findings of the lower courts. On immunity, it held that the provisions of Article VII of the World Bank’s Articles of Agreement, as incorporated into Bangladeshi law, confer immunities only with respect to the Bank’s external activities. According to the Court, employment relations and internal staff management constitute internal activities, which fall outside the scope of jurisdictional immunity.

The Court rejected the argument that the Bank or its officers were immune from legal process in relation to employment disputes, emphasizing that neither the treaty provisions nor domestic implementing legislation expressly extended immunity to such matters. Comparative foreign case law invoked by the Bank was considered inapplicable due to differences in treaty incorporation and domestic legal frameworks.

The High Court Division further held that recourse to the World Bank Administrative Tribunal did not preclude access to domestic courts, particularly where the Tribunal itself had found procedural deficiencies and awarded compensation without reinstatement. It stressed that the termination had been effected in breach of the Bank’s own Staff Rules and the principles of natural justice, notably the failure to provide performance assessments, notice, and an opportunity to be heard. Accordingly, the High Court Division dismissed the revision application and affirmed that the World Bank did not enjoy jurisdictional immunity in respect of the internal employment dispute at issue.