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Bahrain opens world’s first arbitration free zone

Manama, January 11, 2010

Bahrain has launched the Bahrain Chamber of Dispute Resolution, becoming the first country in the world to establish an arbitration “free zone” and introduce the concept of statutory arbitration.

The chamber, an initiative of Bahrain’s Ministry of Justice and delivered in partnership with the American Arbitration Association, the world’s leading provider of conflict management and dispute resolution services, will be known formally as the BCDR-AAA.

Established through unique ADR legislation, the BCDR-AAA will provide the region with a ‘best in class’ international ADR centre of excellence, but with the distinct 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, an essential component of modern day commercial transactions.

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

“BCDR has partnered with the world’s leading provider - the AAA - to ensure the highest standards of international best practice are consistently delivered. And have also enacted cutting-edge legislation that guarantees the independence of the chamber itself and, vitally, the interests of its users,” he added.

“The BCDR-AAA will provide these users, including Bahrain’s legal community, international legal firms, multi-nationals and governments contracting in the Gulf and beyond, with a purpose-built solution for the rapid, effective and certain resolution of commercial disputes,” Al Khalifa continued.

“And, by introducing unique elements including an arbitration free zone and statutory arbitration, we are seeking to set the pace of ADR in modern day commerce. 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. Essentially, the chamber will be delivered in full partnership with Bahrain’s legal and commercial communities, especially Bahrain’s highly regarded legal profession,” Al Khalifa concluded.

William K Slate II, AAA president and CEO, said: “The American Arbitration Association is honoured and pleased to partner with the MoJ to form the BCDR. As alternative dispute resolution grows internationally, public and private sector legal officials are experiencing its efficiencies and fairness.”

“AAA commends His Excellency Sheikh Khaled bin Ali Al Khalifa for his recognition that arbitration and other ADR disciplines will enable the international business community served by Bahrain greater dispute resolution flexibility for generations to come as its practice here evolves,” he added.

Sheikha Haya bint Rashed Al Khalifa, one of the most eminent lawyers and arbitrators in Bahrain and the former president of the UN General Assembly, has also been appointed chair the BCDR-AAA’s independent board of trustees.

Clive Hopewell, Bahrain based partner and head of Middle East for international law firm Charles Russell LLP, said: “The launch of the BCDR-AAA is confirmation of the maturity and reliability of Bahrain’s business environment and is welcomed by both Bahrain’s local and international legal community who will be working together to ensure its success.”

“The impact of the chamber however, is certain to be felt throughout the region and will be a welcome boost to the business community of the wider region too,” Hopewell noted.

In another global first, 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 over 500,000 BHD ($1.3 million) 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. – TradeArabia News Service




Tags: Bahrain | arbitration | Chamber of Dispute Resolution | BCDR-AAA |

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