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Overview: Arbitration in Bahrain and Enforcement of Arbitral Awards in Bahrain

Published on : 01 Apr 2022

Arbitration in Bahrain and Enforcement of Arbitral Awards in Bahrain

Arbitration rules enacted by The Kingdom of Bahrain In 2009 make it the primary united states within the globe to create the equal of a loose exchange quarter for arbitration. That rules, Legislative Decree No. 30(The Decree), offers events to a settlement calling for worldwide arbitration the choice of holding the arbitration in Bahrain without subject that the courts of Bahrain would possibly intervene with, or set aside, the ensuing award, so long as the events are trying to find to implement the award most effective in some other united states. The result is the advent of what this newsletter will call the Bahrain "Free Arbitration Zone. The new regulation additionally creates a brand new Bahrain Chamber for Dispute Resolution (BCDR), that is supposed to end up each a Bahraini countrywide and a Middle Eastern nearby arbitration middle on the way to be run with the assist of the American Arbitration Association (AAA). Creating a worldwide arbitration middle from scratch is not always a clean proposition, mainly in part of the sector wherein customers of arbitration were important of the judicial shape inside which arbitration has so far must be conducted. Despite the benefit of getting nearby arbitration facilities withinside the Middle East, many companies have remained careful approximately sitting arbitrations there out of issues that nearby courts are green in managing arbitration and that awards in opposition to nearby influential parties (mainly the ones related with or desired via way of means of governments) may be set aside. In August 2015, Bahrain Law No. 9/2015 promulgating the Arbitration Law got into effect. Article 1 of the New Arbitration Law offers provisions of the UNCITRAL 1985 Model Law with its 2006 amendments on worldwide industrial arbitration will observe to any arbitration regardless of the prison courting of the events to the dispute, if the arbitration takes vicinity in Bahrain or overseas and the events to it agreed to be a situation to the Law. The provisions of the UNCITRAL Law will observe to all arbitration starting after the New Arbitration Law's access into pressure no matter whether the arbitration settlement becomes concluded earlier than such access into force. The advent of the New Arbitration Law is a breakthrough in unifying worldwide arbitration policies and making sure Bahrain is an appealing region to settle industrial disputes. According to the New Arbitration Law, Bahrain will use alternative 1 in Article 7 of the UNCITRAL Law to define and form an arbitration settlement. To ensure a successful reliance on arbitration as a method of dispute resolution, events must ensure that the arbitration settlement is consistent with and meets the standards of Article 7 of the UNCITRAL Law, which are as follows.

  • "Arbitration settlement" is a settlement reached by requiring the parties to submit to arbitration all or any positive disputes that have arisen or may additionally arise among them in respect of a specified criminal relationship, whether contractual or now not. An arbitration settlement can take the form of an arbitration clause in a contract or a separate settlement.
  • The arbitration agreement could be in writing.
  • An arbitration settlement is in writing if its content is recorded in any shape, regardless of whether the arbitration settlement or agreement was concluded orally, using conduct, or now not.
  • The requirement that an arbitration settlement is in writing is met by using digital conversation if the facts contained therein are available to be used for subsequent reference; "digital conversation" means any conversation the events have using information messages; "information message" means facts generated, sent, obtained, or saved in a digital, magnetic, optical, or comparable manner, including, but now not restricted to, digital conversation.
  • Furthermore, an arbitration settlement is in writing if it is far contained in trade of declaration and protection statements in which the life of the parties is specified.
  • A reference in a contract to any report containing an arbitration clause constitutes a written arbitration settlement, provided the connection is also used to make the clause a part of the agreement. These are the steps taken by the Bahrain government.

Due to hindrances and a lack of understanding of typical arbitration proceedings, GCC laws and international arbitration practice, particularly recognizing and enforcing foreign arbitral awards, were insufficient and required updating to conform to modern international arbitration practice fully. On the other hand, the New Arbitration Law addresses this long-standing GCC-wide issue. Article 7 of the New Arbitration Law states that no arbitrator appointed beneath the provisions of the UNCITRAL Law may be puzzled on an act or omission withinside the overall performance of his responsibilities except it turned into performed in terrible religion or due to a critical error. This provision also applies to the arbitrator's personnel or those legal through him to direct several paintings associated with the responsibilities entrusted to him. Thus, arbitrators cannot be held responsible besides in instances of terrible religion or grave error; that is a good step to boost the number of arbitrators in Bahrain, expanding an average agreement within the arbitral process. Bahrain's signature of the New York Convention at the Recognition and Enforcement of Foreign Arbitral Awards in 1988 turned into a wonderful step in the direction of the encouraging manner of opportunity dispute resolution because the conventional course of neighborhood courts may be costly and time-eating process. However, different GCC nations had been reluctant to amend or produce neighborhood rules reflecting the choice to sell arbitration committedly. The New Arbitration Law takes a massive jump ahead to make sure Bahrain's arbitration legal guidelines are in step with acceptable worldwide practices, bringing predictability in arbitral techniques and truth within the enforcement of awards within the region. Going ahead, the enactment of the New Arbitration Law will, with any luck growth the variety of events choosing Bahrain as the specific jurisdiction for their worldwide business arbitrations.

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