Legal Update: Establishment of The International Commercial Court in Bahrain
Our Associate Fatima Alsayed, discusses the establishment of the International Commercial Court in Bahrain & its role in resolving cross-border disputes
Fatima Alsayed ([email protected]) – Associate
On 29 August 2024, the Official Gazette published Decree Law No. (9) of 2024 regarding the International Commercial Court in Bahrain (Law). Bahrain signed a bilateral treaty with Singapore to establish an international commercial court for resolving cross-border commercial disputes named ‘Bahrain International Commercial Court’ (BICC). The aim is to enhance the Kingdom’s legislation and resolve disputes according to the best global practices in collaboration with internationally esteemed commercial courts. It also seeks to strengthen international trade by developing systems for resolving international commercial disputes.
Establishment and Composition of the Court
According to Article 3 of the Law, an independent body called ‘International Commercial Court of Bahrain’ will be established, endowed with its own legal personality. The Minister of Justice or the minister designated by a decree will oversee and administer the BICC.
The courts will be composed of its president, vice president, and all members of its dispute resolution panels. The court council may establish an executive board from among its members and assign it responsibilities as it deems appropriate.
The BICC is competent to adjudicate the following disputes:
- International Commercial Disputes
A dispute is considered ‘international’ if one of the parties is based in a location outside the Kingdom, part of the obligations arising from the commercial relationship is to be performed outside the Kingdom, or the subject matter of the dispute is more closely related to a place outside the Kingdom.
It is considered a ‘commercial’ dispute if its subject matter relates to relationships of a commercial matter, whether contractual or non-contractual. This includes any transaction involving the supply of goods or services, exchange or distribution agreements, commercial representation or agency, managing rights with others, and commercial leasing.
- Disputes related to Arbitration
These disputes include issues related to interim measures, the appointment of arbitration tribunals, the appointment of its members, and the nullification or recognition of its decisions and judgments.
The BICC will be competent to consider the dispute if the lawsuit is filed before it and the other party has expressly or implicitly accepted its jurisdiction, provided that the dispute falls within the aforementioned categories. The agreement between the parties regarding the choice of court must be in writing or via any communication method that makes the information accessible for later retrieval. If the agreement is part of the contract, it is treated as independent of the other contract terms. The validity of the court choice agreement cannot be challenged solely on the ground that the contract containing it is invalid or incorrect.
The court council shall establish regulations regarding the rules, procedures, and deadlines to be observed in disputes within the jurisdiction of the court according to the provisions of the Law.
Appeals
The parties may agree in writing not to appeal the judgment issued on the subject of the case by the Dispute Resolution Authority, stipulating that its judgment shall be final and binding. In this case, the judgment may not be appealed unless there is a nullity in the judgment or in the procedures that affected the judgment. The appeal against the judgment issued in the subject of the case necessarily entails appealing all non-final rulings and decisions previously issued in the case that can be individually appealed, unless they are explicitly accepted. The appeal transfers the case to the state it was in before the issuance of the appealed substantive judgment concerning what was raised in the appeal.
Unless the regulations specifically state otherwise, it is not acceptable to file an appeal against judgments rendered during the course of a case that do not result in the settlement of the dispute.
Concluding Remarks
The establishment of the BICC marks a significant advancement in Bahrain’s legal landscape, particularly in the realm of international commercial dispute resolution. By providing a dedicated platform for adjudicating cross-border commercial disputes and arbitration-related issues, the BICC aligns Bahrain with global best practices and enhances its position as a hub for international trade. The court’s independent structure, overseen by a qualified ministerial body, ensures that it operates with integrity and efficiency. Furthermore, the BICC not only aims to strengthen Bahrain’s legal framework but also to attract foreign investment and facilitate smoother commercial transactions in the region.
For more information, please contact us on [email protected]