Enhancing Global Commerce – The Bahrain International Commercial Court Law Explained

On 27 August 2024, the Kingdom of Bahrain enacted Royal Decree Law No. (9) of 2024 Regarding the Bahrain International Commercial Court. This legislation is designed to enhance Bahrain’s standing as a premier centre for international commercial dispute resolution. This article highlights key features of the Bahrain International Commercial Court Law and its anticipated impact on litigation in Bahrain.

Establishment of the Bahrain International Commercial Court

The law establishes the Bahrain International Commercial Court (BICC), an independent body with legal personality, dedicated to adjudicating international commercial disputes. The court aims to streamline the resolution process and provide a specialized forum for complex commercial matters.

Jurisdiction: Comprehensive Scope

The BICC has exclusive jurisdiction to adjudicate a variety of disputes, contingent upon the parties’ agreement to its jurisdiction. This jurisdiction applies even in cases where traditional judicial bodies may lack the competence to consider the matters for any reason. The court’s jurisdiction encompasses:

1. International Commercial Disputes: A dispute is classified as international if it involves relationships of a commercial nature, whether contractual or non-contractual, where the domicile of one of the parties, the location where any part of the obligations is performed, or the place with the closest connection to the subject of the dispute is situated outside Bahrain. This definition covers a wide range of commercial interactions, including:

• Transactions involving the supply of goods or services.
• Distribution agreements, commercial representation, and agency arrangements.
• Management of third-party rights, leasing, and construction projects.
• Consulting services, engineering works, and investment activities.
• Banking, insurance, joint ventures, and other forms of commercial cooperation.

2. Arbitration-Related Matters: The court also holds jurisdiction over disputes concerning arbitration, including:

• Provisional measures.
• Appointment and disqualification of members of the arbitration body.
• Annulment or recognition of arbitration decisions and rulings.

A. The court will consider a dispute if a claim is brought before it and the other party explicitly or implicitly accepts its jurisdiction. This acceptance can occur through the signing of a contract that includes a jurisdiction clause or through participation in the proceedings without objection.

B. Importantly, any agreement regarding the choice of the BICC must be documented in writing or through any medium that makes the information accessible for future reference. If this agreement forms part of a broader contract, it is treated as an independent agreement, separate from other contractual terms. The validity of the jurisdictional agreement cannot be challenged on the basis that the contract it is part of is void or invalid, as it stands alone from the other terms of the contract.

C. The other party must clearly express its intention to accept the court’s jurisdiction, whether explicitly or implicitly, reinforcing the necessity for clear communication in commercial agreements.

Regulation of Dispute Resolution Procedures

The law states that the Court Council shall establish one or more regulations regarding the rules, procedures, and deadlines to be observed in disputes that fall within the jurisdiction of the court. This ensures that the process is governed by clear and consistent guidelines, facilitating efficient and fair resolution of disputes.

Representation of Parties Before the Court

In applying the provisions of this law, and subject to the regulations:

A. Non-Bahraini attorneys may represent parties in conjunction with a Bahraini attorney licensed before the Court of Cassation in disputes conducted in Arabic. This provision is important as it allows for collaboration between local and foreign legal expertise, ensuring that parties have access to knowledgeable representation in a bilingual legal environment.

B. Non-Bahraini attorneys may represent parties in disputes conducted in languages other than Arabic. This flexibility is crucial for international parties who may be more comfortable communicating in their native languages, thereby promoting a more inclusive and accessible judicial process.

Immediate Enforcement of Rulings

Rulings issued under the provisions of this law shall be considered as rulings issued by a competent authority in the Kingdom and shall be subject to immediate enforcement without the need for guarantees. The Dispute Resolution Body or the Appellate Body to which the appeal is submitted may order, at the request of the concerned parties, a suspension of immediate enforcement if there is a fear of significant harm from the execution and if the grounds for the appeal suggest a likelihood of its annulment. When ordering the suspension of immediate enforcement, the Dispute Resolution Body or the Appellate Body may require guarantees or any other measures it deems appropriate to secure the rights of the ruling party. This provision ensures that parties can rely on the enforceability of rulings while also allowing for protective measures in cases of potential harm.

Anticipated Implications

The establishment of the BICC and the provisions of the Bahrain International Commercial Court Law are expected to significantly enhance the efficiency of commercial dispute resolution in Bahrain. With an emphasis on international practices, the BICC is likely to attract more businesses seeking a reliable legal framework for resolving disputes. Traditionalists may express concerns about transitioning from Arabic to English, particularly in cases where local legal practices have been well established.

Conclusion

As Bahrain aims to solidify its position as a leading hub for international commercial arbitration and dispute resolution, the Bahrain International Commercial Court Law represents a progressive approach to legal practice. The changes are expected to encourage greater participation from international entities and enhance Bahrain’s reputation in the global commercial landscape.