Bahrain

Bahrain acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) on April 6, 1988 with two declarations.
“Declarations:
1. ...
2. In accordance with article 1 (3) of the Convention, the State of Bahrain will apply the Convention, on the basis of reciprocity, to the recognition and enforcement of only those awards made in the territory of another Contracting State party to the Convention.
3. In accordance with article 1 (3) of the Convention, the State of Bahrain will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State of Bahrain.”

Law No. 9 of 2015 (the “BAA”) has incorporated the Model Law of the United Nations Commission for International Trade Law (the “Model Law“) and included some additional provisions regarding the parties’ representation (Article 6 of the “BAA”) and arbitrators’ liability (Article 7 of the “BAA”). The Law applies to: (i) an arbitration seated in the Kingdom of Bahrain; or (b) an arbitration seated outside of Bahrain if the parties have agreed to the application of the Arbitration Law.
Article 1 of Law No 9 of 2015 Promulgating the Arbitration Law states that “without prejudice to the provisions of the international agreements in force in the Kingdom of Bahrain:
The provisions of the UNCITRAL Model Law on International Commercial Arbitration of 1985, attached to this Law, shall apply to every arbitration, regardless of the nature of the legal relationship subject of the dispute, if such arbitration is conducted in the Kingdom or elsewhere, and the parties thereto have agreed to subject it to the provisions of the attached Law.
The provisions of the attached Law shall apply to every arbitration commencing after it comes into force, even if it is based on an arbitration agreement that was concluded before this Law comes into effect.”

Hence, the Bahrain Arbitration Law broadens the application of Article 1(1) of the UNCITRAL Model Law by extending the scope of application to all arbitrations seated in Bahrain or seated outside of Bahrain if the parties have agreed to its application, irrespective of the nature of the legal relationship between the parties to the dispute. Article 1(1) of the UNCITRAL Model Law restricts its application to commercial international arbitration.
Moreover, due attention is paid to the international arbitration case law and best practices as it is important to avoid idiosyncratic interpretation of the legislation. Article 2 of the Bahrain Arbitration Law clarifies that “due regard shall be given to the international source in interpreting the provisions of the attached Law contained under Article (2)(a) thereof if the arbitration is an internationally commercial one.”
The Bahrain Chamber for Dispute Resolution was established by Bahrain Legislative Decree No. 30 of 2009, as amended by Legislative Decree No. 64 of 2014 which has two distinct and separate components: a specialized court (the BCDR Court) and an international arbitration and mediation center (BCDR). The BCDR Court has jurisdiction over disputes falling originally within the jurisdiction of the Bahraini courts, where the claim exceeds BHD 500,000 (about US$ 1.3 million) and at least one party is a financial institution licensed by the Central Bank of Bahrain, or the dispute is of an international commercial nature. Parties may only challenge the decision of the Court before the Bahraini Court of Cassation on limited grounds. The decisions are not subject to appeal.
The Center, in turn, has jurisdiction over disputes that the parties have chosen to submit to the BCDR Rules of Arbitration in partnership with the American Arbitration Association (the BCDR-AAA Arbitration Rules). The Center may also act as an appointing authority if the parties have agreed.
The Bahrain Chamber for Dispute Resolution is an international arbitration and mediation center with jurisdiction over disputes with respect to which the parties have agreed in writing that the BCDR Arbitration or Mediation Rules shall apply, or that BCDR should administer the arbitration or mediation under non-institutional rules or procedures.
BCDR's current Arbitration Rules came into effect in 2017, and are available in English, Arabic and French, introducing “new features that enhance procedure and time and cost efficiency of arbitration and mediation; new and more accessible fee schedules; and new model clauses.”
According to Article 4 of the BAA, the definition of the arbitration agreement and its form is to be made in accordance with the first option provided for in Article 7 of the Model Law. Therefore, arbitration agreements in Bahrain may be either (i) in the form of an arbitration clause in a contract or (ii) in the form of a separate agreement. It must be in writing or contained in a document signed by the parties as long as its content is recorded in any form.
In the same vein, the Kompetenz-kompetenz principle is also enshrined in the Model Law, which Bahrain has adopted. Thus, arbitral tribunals have the competence to rule on their own competence as a preliminary issue or in the merits phase. Nevertheless, any party that does not agree with the tribunal’s decision can file, within 30 days, a request before the Civil High Court for a ruling on the issue of jurisdiction. In such a case, the arbitral proceeding are not suspended.
There is no express provision that defines non-arbitrable disputes in Bahrain. However, some disputes are not capable of being settled by arbitration, for instance, matters involving family and criminal law and public policy.
The application to challenge an arbitrator must be submitted within fifteen days from the date on which the applicant party becomes aware of the facts giving rise to doubts. The arbitral tribunal itself may analyse the challenge if the parties so agree. If the challenge is rejected, the persistent party may request, within 30 days, the Civil High Court to decide on the challenge.
Regarding the enforcement of arbitral awards in Bahrain, Bahrain has acceded to the New York Convention in 1988, accordingly, international commercial arbitral awards are recognised and enforced in Bahrain according to the rules set forth in the New York Convention, which limit the grounds for annulment.
In order to recognise or enforce an award in Bahrain, the award must be final and binding on the parties. The arbitral awards that have been set aside or suspended, in the jurisdiction in which they were rendered, are very unlikely to be recognised in Bahrain. The application for recognition is made before the High Civil Court. Once recognition is granted, one of the parties may apply to the Court of Execution of Bahrain for enforcement.
With respect to the enforceability of domestic awards, they must be deposed with the arbitration agreement before the clerk of the Court that would have jurisdiction to rule on the case. The award is enforceable with an order of President of the Court (Article 240 of the Bahrain Civil and Commercial Procedures Act).
The application to set aside an award follows the rules of Article 34 of the Model Law. An application to set aside must be filed within three months from the date on which the party seeking annulment received the award.
In addition to the New York Convention, Bahrain is a party to the following treaties and conventions concerning arbitration:
the International Centre for Settlement of Investment Disputes (ICSID) Convention of 1965;
the Riyadh Arab Treaty for Judicial Cooperation of 1983;
the Execution of Judicial Judgements, Delegations and Notifications Treaty for the Cooperation Council for the Arab States of the Gulf;
the Convention for Pacific Settlement of International Disputes (Hague Convention I); and
the Commercial Arbitration Centre Regulation for the Cooperation Council for the Arab States of the Gulf.

The Gulf Cooperation Council Commercial Arbitration Centre (“GCCCAC”) is also based in Bahrain. The GCCCAC Rules were last amended in 1999 (“GCCCAC Arbitral Rules of Procedure”).
The BCDR is considering amendments to its 2017 Arbitration Rules. Draft amendments to the 2017 Arbitration Rules were published by the BCDR on January 19, 2021.
As per current Bahrain Arbitration Act, arbitration clause upholds the doctrine of separability from other clauses in an agreement. A decision by the tribunal that an agreement is null and void does not automatically render the arbitration clause contained within the agreement to also be null and void.
If the parties have not agreed on the process of selecting arbitrators, a party may request the Bahrain High Civil Court to appoint an arbitrator. Also, if the parties have not agreed on a selection process, a party may still request the Bahrain High Civil Court to appoint an arbitrator.
The tribunal must decide on the challenge if the arbitrator does not step down or if the other party does not agree to the challenge raised by the opposing party. If the tribunal rejects the challenge, the party that submitted the challenge may request the Bahrain High Civil Court, within thirty (30) days from the date that party is notified of the tribunal’s decision, to consider the matter. The tribunal may proceed with the arbitration and issue an award whilst the Bahrain High Civil Court simultaneously considers the challenge raised by one of the parties.
The recognition or enforcement of an award, irrespective of the country in which the award was issued, can only be rejected in the following cases: (i) based on a substantiated request from the party facing execution proceedings if it demonstrates that:
either party to the arbitration agreement did not have the required legal capacity, or if the arbitration agreement is invalid under the governing law selected by the parties or, if the parties have not selected a governing law, the arbitration clause is invalid under the laws of the country in which the award was issued;
it was not notified correctly of the appointment of an arbitrator or the arbitration proceedings or if it was otherwise unable to present its case;
the award deals with a dispute that is not contemplated or covered by the arbitration agreement or includes decisions that are outside the scope of the arbitration agreement, provided that if such decisions are severable from decisions concerning disputes within the scope of the arbitration agreement then the court’s rejection of the award must be limited to the unenforceable decisions;
the constitution of the tribunal or the arbitration proceedings contravened with the arbitration agreement, or if such matters were not agreed in the arbitration agreement, contravened with the laws of the seat of arbitration; or
the award is not yet binding or has been set aside or suspended by a court in the country in which, or under the laws of which, that award was issued.
(ii) if the Bahrain High Civil Court decides that:
the dispute cannot be resolved by arbitration under the laws of Bahrain; or
the recognition or enforcement of the award contravenes with public policy as applicable in Bahrain.
The enforcement of an award is made by way of a decision from the President of the Bahrain High Civil Court following the Bahrain High Civil Court’s review of the award and the arbitration agreement.
The party challenging the award must submit its challenge to the High Civil Court within three (3) months from the date of the party’s receipt of the award or from the date the tribunal rules on a request for a correction or an interpretation of an award, or a supplemental award.
the Kingdom of Bahrain, partnering with the American Arbitration Association (AAA) created the BCDR-AAA. The BCDR-AAA created an arbitration “free-zone” by ensuring an arbitral process with jurisdictional and legal certainty through exclusion of any judicial review and minimal court intervention.