BCDR arbitration claims total $500m
Manama, November 13, 2011
Around $500 million (BD189 million) has been claimed in 13 resolved cases by the Bahrain Chamber for Dispute Resolution in its first year of operation last year, an official has revealed.
This year the Bahrain Chamber for Dispute Resolution (BCDR)-American Arbitration Association (AAA) has received 27 cases, said BCDR-AAA chief executive James MacPherson.
Most cases have been for the financial sector, either from banks, insurance companies or investors and have involved parties from Bahrain and abroad.
'The feedback from lawyers and parties to date has been very positive,' MacPherson told our sister newspaper, the Gulf Daily News. 'They are appreciative because it's fast, because some of these cases are decided in eight or nine months and others might take a year or year-and-a-half.
'You have a professionally trained young lawyer who works with the parties and works to get all the relevant data in order, which takes about four months and then that information, is turned over to a tribunal,' he said.
The BCDR in partnership with the AAA was launched in January last year to provide international and regional businesses and governments contracting in the Gulf and beyond.
It offers purpose-built mediation and arbitration solutions for the rapid, effective and binding resolution of commercial disputes. This is in addition to statutory Alternative Dispute Resolution (ADR) and international arbitration with a Free Arbitration Zone option.
Statutory ADR tribunals are disputes involving either a financial institution licensed by the Central Bank of Bahrain (CBB) or international commercial matters where the contested sum exceeds BD500,000 ($1,329,784).
These disputes are automatically heard by the BCDR-AAA, rather than the local courts for rapid, final and binding resolution of disputes.
'If you have a dispute with a CBB-regulated bank or between each other and it's over half a million dinars if the case is filed with us directly,' said MacPherson.
'The other type of case is if it's an international commercial matter, so if someone from another GCC state or anywhere in the world has a dispute in Bahrain with a Bahraini business or person and it's over half a million Bahraini dinars if those cases are filed with us,” he said.
'The tribunal is chaired by an appeals court judge and the parties have 30 days to appoint two people to sit to form a tribunal of three. If the parties can't agree within 30 days, then we name a judge, so there are two judges, and we name a non-judge to sit there, so that way we can appoint a banker, an insurance professional, an accountant, someone from the private sector who understands the case and dispute,' he added.
MacPherson said the courts still had a role to play, for example if parties were involved in arbitration and one of them needed interim relief, the company could go to the courts and ask for an order to have a cash advance.
'The real thing is business people want to do things in a business way, courts around the world offer the same broad approach to whatever comes their way, but arbitration let's you pick a specialist,' he said. “If you have an engineering dispute you want an engineer on that tribunal making a decision, you want someone understanding your role. The fees are the same whether you go through statutory arbitration or the courts.'
The other aspect of BCDR-AAA's work is international arbitration, where parties can choose to arbitrate by agreement and can opt to make use of the Free Arbitration Zone. In such cases, the arbitration award will not be subject to challenge in Bahrain.
The BCDR-AAA has the jurisdiction to hear a dispute if the parties agree in writing to settle it through the chamber. There is no criteria for the amount of money contested and no requirement that the dispute be international or commercial.
For the Free Arbitration Zone to work effectively, parties must agree that a non-Bahraini law will be applied and that the award should be enforced outside of Bahrain and in the country whose law has been selected to govern the dispute.
'The arbitrators will draft a binding award that is enforced internationally under the New York convention of which Bahrain is a signatory, which means they will enforce awards from other countries, which is much easier than enforcing a court judgement,' said MacPherson.
'If somebody comes here and gets an award of arbitration, they can go somewhere like England and enforce it without having to go to court and enforce it all over again.”
MacPherson said one of the goals of BCDR-AAA was to make Bahrain a hub for arbitration. He said having the chamber was a competitive advantage for Bahrain because it gives potential investors the confidence that they will be able to resolve disputes if they run into conflict down the line.
'A big concern is that you invest in a country and can't get your money back, but here you know within 16 to 18 months you will get a resolution and you won't get it solved faster anywhere else,' added MacPherson. – TradeArabia News Service