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A Dawn of a New Era in Bahrain – Enactment of a New Arbitration Law

Mohamed ElGhatit

22 July 2015
Bahrain has recently passed Law No. 9/2015 promulgating a standalone arbitration law (the "Law"), which significantly changes its arbitration regime. The Law is applicable to locally seated arbitrations, or if the parties agree foreign seated ones as well.

The main feature of the Law is the incorporation of the well-known and tested UNCITRAL Model Law. The Law also provides for some unique features. According to the Law, the Bahraini High Court is the Court entrusted with considering and determining all arbitration related applications, including applications to enforce or set aside arbitral awards. The Law also provides the legal representatives of the parties do not have to be licensed and/or registered with the Bahraini authorities for "international commercial arbitration[s]" held in Bahrain. This permits foreign investors to retain their preferred legal counsel (whether local or international). In addition, the Law confirms arbitrator immunity (save for instances of bad faith or gross mistake) in respect of actions and decisions taken in the conduct of the arbitral proceedings they preside on.

With the promulgation of the Law, the arbitration regime in Bahrain now closely resembles the established framework in Egypt, the favoured seat for arbitration in the Arab world. This is confirmed by the caseload and total value of locally seated arbitrations of the Cairo Regional Centre for International Commercial Arbitration.  Although the most current statistics have yet to be officially published, the relatively new (established in 2010) Bahrain Chamber for Dispute Resolution in partnership with the American Arbitration Association (the "BCDR-AAA") has had a growing caseload.

The enactment of the Law will likely result in an increase in the number of parties opting for Bahrain as a seat of their arbitrations (whether using BCDR-AAA or other arbitral institutions).

Mohamed ElGhatit

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