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Mon 11 Jan 2010 12:22 PM

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Bahrain launches dispute resolution chamber

UPDATE 1: New initiative sees Gulf state setting up world's first arbitration free zone.

Bahrain launches dispute resolution chamber
STRIKE OUT: Bahrain has launched its own dispute resolution chamber offering businesses the opportunity for commercial disputes to be resolved in the region.

Bahrain on Monday launched a chamber of dispute resolution, becoming the first country in the world to establish an arbitration “free zone”.

The chamber is an initiative of Bahrain’s Ministry of Justice and delivered in partnership with the American Arbitration Association and will be known formally as the BCDR-AAA. 

It aims to provide the region with an international centre of excellence for dispute resolution, with the added advantage of operating an arbitration “free zone” under Bahrain’s new legislation.

As a result, where international disputes are heard at the BCDR, where the parties involved agree to be bound by the outcome, the award will be guaranteed and not subject to challenge in Bahrain. 

This resolves an issue that has been a significant problem in many parts of the world, despite existing international conventions. 

Bahrain’s arbitration “free zone” will, therefore, offer jurisdictional and legal certainty to the recognition of arbitration awards.

Bahrain has also introduced the concept of statutory arbitration for commercial and financial disputes. 

Cases that would previously have come before Bahrain’s domestic courts, where the claim is more than $1.3m and involves an international party or a party licensed by the Central Bank of Bahrain, will now be directed to the BCDR-AAA for final and binding resolution. 

The move is aimed at providing additional benefit to Bahrain’s commercial, banking and financial services sectors, which form a long-established hub within the region.

Bahrain Minister of Justice, Sheikh Khaled bin Ali Al Khalifa, said: “In establishing the BCDR-AAA, Bahrain has sought to bring the very latest in global ADR solutions to the region.

"We firmly believe the Chamber has all the necessary elements to become a leader in its field and provide Bahrain with another compelling draw for the international business community.

“The Chamber is also a key aspect of Bahrain’s Vision 2030 and National Economic Strategy. It will help develop the legal services sector offering here in the kingdom, stimulate economic trade and further enhance Bahrain’s international business and legal credentials.”

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