In accordance with Article 10 the Basic Byelaw and Article 59 of the Internal Regulation of the Bahrain Chamber of Commerce and Industry, and in compliance with the vital role played by commercial conciliation and arbitration in resolving disputes arising from dealing with various aspects of economic activities amicably and as quickly as possible, the Bahrain Chamber of Commerce has introduced rules of settlement of commercial disputes and arbitration with the aim of providing such services to the different business, economic and legal communities.

Chapter One

Powers and Duties of the Commercial Arbitration and
Disputes Committee and its Formation

1.         Pursuant to the provisions of Article (59) of the BCCI Basic Byelaw, the Commercial Arbitration and Disputes Committee shall have the following duties:

5.           In the exercise of its duties, the Committee shall comply with the applicable laws in the Kingdom of Bahrain, the prevailing commercial customs and practices, terms of the contract or agreement between parties to the dispute and the supporting documents issued by the concerned parties. 

Chapter Two

Rules of Settlement of Commercial Disputes

 Article (2):

1. These Rules shall be applicable to all commercial disputes referred to BCCI, provided that they shall be between:   

(a)          Two local parties or more provided that at least one of them shall be a BCCI member and shall fulfil the membership conditions.  

(b)          An overseas party and one local party or more provided that at least one of them shall be a BCCI member. 

Dispute Settlement Procedures 

1.           An application with respect to the desire to settle a commercial dispute shall be submitted to the BCC Director General by one of the parties to the dispute or his/its representative in which case the application shall be referred to the Committee’s Rapporteur.   

2.           Such application shall contain the following details:   

3.           The Committee’s Rapporteur shall ensure the fulfillment of the necessary conditions for settlement of the dispute. He shall also give notice to the other parties to the dispute with respect to the contents of the application submitted, date of commencement of the settlement procedures, venue of convening the sittings and such other relevant procedural matters. The BCCI Director General or his representative shall approve such procedures and shall sign the relevant correspondence.  

4.           The other parties to the dispute shall be requested to decide their position towards the settlement through the Committee and in case of its admission in writing, they shall be requested to express their viewpoint with respect to the dispute in question supported by all the relevant documents within 30 days from the date of notice with respect to reaching a settlement.   

5.           In case of the failure by the other parties to the dispute to respond to the BCCI registered letters, they shall be given notice one month after the first letter and then a further notice shall be given.  In case of failure to respond, the matter shall be kept on hold by a decision of the Committee three months after the first letter. In this event, notice shall be given to the applicant to adopt the appropriate action in this respect from the date of adopting the Committee’s decision. However, any of the other parties to the dispute may give to the Committee an excuse justifying their inability to appear before the Committee or to respond to the BCCI’s correspondence within one month from the Committee’s issue of its decision to keep on hold the issue of the dispute. In case the Committee accepts the excuse, it shall examine the dispute once again.  

6.           The Committee shall convene its sittings to examine the dispute at the BCCI building and each party to the dispute shall appear in person or through its representative acting under a power of attorney or letter of authority if so requested to do so. The Committee shall seek to bring closer the views of the parties. It shall also propose a formula for settlement of the dispute.  If such formula is accepted a settlement agreement shall be drawn up to be signed by the Committee’s Chairman and parties to the dispute. The other party shall be entitled to obtain a copy of the settlement agreement duly attested by the Chamber to act in accordance therewith.  

1.           A settlement agreement shall not be deemed as an arbitration award nor shall the rights of parties to the dispute be affected in any manner in case it is not implemented, as they shall remain to have the right to seek recourse to the competent courts or to have reference to arbitration if agreement is reached in this respect or in case there is an arbitration clause in the contract concluded between the parties to the dispute.  

2.           Arabic shall be the language used by the Committee in all the documents and in filing defence pleas. The Arabic text shall be the recognized version for its resolutions. Any party may submit its documents in a language other than Arabic if they are necessary to fulfil procedures for settlement of the dispute. In addition, any party shall be entitled to request a translated copy which is recognized by the Chamber of the Committee’s resolutions and its ruling in this case shall be deemed as the original version.  

3.           The Committee shall be empowered to seek the assistance of experienced and specialized person to benefit from their views and experience in the investigation of the issues of the dispute that are so required. The Chamber shall charge to the parties to the dispute and in the manner to be decided by the Committee the fees and charges of such experts whose assistance is sought by the Committee in its deliberations. The Committee shall be empowered to nominate one member or more from its members or from the sub-committees or any specialized party designated for inspecting the goods subject to the dispute and to submit a report concerning them, which shall be taken into account in the Committee’s final decision.  In addition, it shall be empowered to instruct the concerned subcommittee to examine the dispute and to report on it according to the subject-matter of the dispute.  

4.           No Committee member shall participate in the settlement of a dispute to which he is a party in his personal capacity or to be a relative thereof to the fourth degree of relationship or to have a direct or indirect financial relationship therewith.  

5.           In case of disputes that arise between a BCCI member and other overseas parties, BCCI shall contact such parties. Should it find out that they do not wish to settle the dispute, it may contact the Chamber of Commerce in such country to whom they belong or to the concerned institutions therein with a view to reaching a settlement of the dispute.  

6.            The Committee shall adopt its decisions by a majority of votes. The detailed contents of the resolutions, its recitals, date of its issue and signatures of the Committee’s members and Rapporteur shall be confirmed in writing. The Committee members shall not receive any fees or remuneration in consideration of their efforts towards the settlement of disputes.   

7.           BCCI shall charge the parties to the dispute non-refundable fees and the settlement proceedings shall not go ahead unless each party pays the prescribed fees in addition to the fees and expenses of experts that BCCI may seek their assistance to investigate the dispute in question as shall be determined by the Committee in accordance with the applicable practices in this respect.   

Failure to Implement the Settlement Agreement

The Committee may refer a recommendation to BCCI Bureau seeking the freezing of a member’s membership and suspending all the services provided thereto in addition to non-renewal of membership or any other penalties which the BCCI finds appropriate and the contents of such decision shall be intimated to the relevant authorities in the following cases:   

1.           If he fails to co-operate with the Arbitration and Commercial Disputes Committee upon its hearing of a commercial dispute to which the member is a party either by appearance, submission of the required documents, responding to the claims or inquiries addressed thereto by the Committee or by any other means.  

2.           If he fails to implement the Settlement Agreement that has been reached through the Arbitration and Commercial Disputes Committee in a commercial dispute to which the member is a party and where he previously approved such agreement before the Committee.  

In the above two cases, a written notice shall be given to the member by registered letters on three occasions concerning his violations, provided that he shall be given a maximum period of 3 months from the date of the first notice after which the appropriate action will be taken by BCCI. A member may submit a petition to the Board of Directors to review its decision in case of its issue within a maximum period of 15 days from sending the last letter thereto.   

Chapter Three

Commercial Arbitration Rules and Procedures 

1.           An applicant for arbitration shall file a written application with BCCI Director General signed by him or by his attorney accompanied by the supporting documents evidencing his viewpoint with an undertaking to pay the prescribed fees according to BCCI’s regulations. An application must contain the conditions and particulars mentioned in the rules of settlement of commercial disputes and arbitration in addition to the agreements entered into and the arbitration clause.   

2.           Upon receipt of the arbitration application and documents, the Committee’s Rapporteur shall give notice to the other party against whom arbitration is sought through BCCI Director General or his deputy of the contents of the application to obtain his approval or disapproval and requesting the supporting documents within a period of 15 days from the date of receiving the application. In case the latter is opposed to arbitration, the application shall be kept on hold and such action shall be notified to the other party. In case of approval, the parties shall be invited to attend a meeting at BCCI’s offices within 7 days from the date of completing the notification procedures to agree on the arbitration agreement.   

Appointment of Arbitrators and their Powers 

1.           In case the parties to the dispute agree to submit to arbitration by the Committee, the latter shall hear the subject-matter of the dispute within two weeks from the parties’ signature of the arbitration agreement.  The number of arbitrators shall be even. In case of failure to agree upon the third arbitrator within 15 days, the Commercial Arbitration and Disputes Committee shall nominate the third arbitrator. 

2.           The Arbitration Committee shall ascertain the availability of the arbitration clause immediately upon receipt of the Case file and shall clarify the points of agreement and the dispute sought to be resolved.   

3.           If the contract or agreement entered  into between the parties to the dispute originally provides for reference of any dispute that arises between them with respect to implementing the contract or interpretation of its clauses to the Commercial Arbitration and Disputes Committee, the latter shall be entitled to hear such dispute upon an application by one of the parties even if the other party fails to respond to arbitration application.  

4.           The arbitrators shall be fully empowered to hear the dispute.  They shall have the power to invite the parties to hear their statements and views and to request the submission of new documents if necessary. The arbitration proceedings shall continue in case either party fails to appear without a justifiable excuse in spite of giving notice thereto.  

5.           The arbitrators shall upon the desire of one of the litigants or of their accord seek the assistance of an expert to be guided by his opinion in respect of the subject-matter of the dispute if so required by the conditions of hearing the dispute.  The expert’s prescribed fees shall be borne by the applicant for such appointment otherwise they shall be equally incurred by the disputing parties if the decision of his appointment is in response to the arbitrators’ desire.   

6.           In case of the failure of either party to the proceedings to submit the required documents or to respond to the questions addressed thereto by the Committee, the statements and documents of the other party shall be deemed as a presumption in his favour unless the opposite is proved.   

7.           An arbitration clause shall result in the litigant’s waiver of their rights to have recourse to the court which is originally competent to hear the dispute according to Article 236 of the Civil and Commercial Procedures Act of 1971.   

8.           Hearings of the Commercial Arbitration and Disputes Committee and its deliberations shall be held behind closed doors and shall be only attended by the concerned parties and by the persons given permission thereto by the Committee. In case of the death of a party to the dispute, the Committee shall defer the hearing of the subject-matter pending the appointment of a legal representative thereof by his heirs.  

1.           The Committee shall issue the arbitration award within a maximum of 3 months from the date of its acceptance to arbitrate the dispute, otherwise either litigant may refer the dispute to the competent court unless they agree on extending the aforesaid period unless the litigants prescribe a certain time limit in the arbitration agreement.   

2.           The arbitrators’ award shall be adopted by a majority vote and shall be confirmed in writing. It shall include in particular a copy of the arbitration agreement with a summary of the litigants’ statements, documents, reasons of the award, its text, date of issue and arbitrators’ signatures with a determination of the party that lost the proceedings that will incur the arbitration and expert’s fees.  An arbitration award shall not be challenged.    

3.           The arbitrators shall adopt their award according to the rules of law. The Bahrain law shall be deemed as the applicable law in respect of the elements of the dispute unless the parties otherwise agree. Subject to complying with the contract signed between the parties to the dispute and the prevailing customs, the arbitrators shall comply with the general principles of justice and shall observe the right to defence and treatment of the litigants on an equal basis.   

4.           Arabic shall be the language of arbitration and the Committee may invite the litigants to procure the translation of their documents into Arabic. Notwithstanding the above, the arbitration proceedings may be held in the language of the contract if the litigants do not speak Arabic.   

Execution of the Award 

1.           In accordance with Article 240 of the Civil and Commercial Procedures Act, all the arbitrators’ awards, even though they are issued in respect of an investigation procedure, shall be deposited in original together with the original of the arbitration charter with the Clerks Department of the court originally competent to hear the dispute within the three days following the date of its issue. The court clerk shall draw up a statement in respect of such deposit and a copy thereof shall be served upon the parties to the arbitration. Should the arbitration relate to an appeal case, the deposit shall be made with the clerks department of the court originally competent to hear the appeal.   

2.           In accordance with Article 242 of the Civil and Commercial Procedures Act, an arbitrators’ award may be appealed according to the rules laid down for appeal of judgements handed down by the law courts within 30 days from the date of the service of the statement of depositing the original award with the litigants. An appeal shall be filed according to the rules set forth in the law. Each interested party may seek the invalidation of the arbitrators’ award handed down finally in the cases set forth in Article 243 of the Civil and Commercial Procedures Act. Filing a case for invalidation of the arbitrators’ award with the competent court shall result in the stay of execution thereof unless the court rules for the continuation of such execution.  

3.           In accordance with Article 241 of the Civil and Commercial Procedures Act, an arbitrators’ award shall not be enforceable except by an order to be issued by the president of the court with whose clerks department the original award has been deposited upon the request of any concerned party after review of the award the arbitration agreement and upon ascertaining that there is nothing barring the execution thereof and after the lapse of the appeal time limit where the award may be appealed.  The execution judge shall have the jurisdiction to act with respect to the execution of the arbitrators’ award.