On 10 January 2010, Bahrain launched its new arbitration centre, known as BCDR-AAA, a partnership between the government and the American Arbitration Association. The centre will administer arbitrations under the rules of the International Centre for Dispute Resolution, the AAA’s international division. Users can also opt for arbitration under UNCITRAL rules or the centre’s own rules, which are modelled on the UNCITRAL rules.
Bahrain has introduced an “arbitration free zone” where the centre is based. Although it is not yet clear how this will work legally, the centre’s press release says the free zone guarantees that awards will not be subject to challenges in local Bahraini courts. Any challenge to the award will have to be before the competent authority in another state. However, this applies only where the parties have expressly chosen an alternative law to govern their dispute. Parties will have to opt in to this regime by adopting specific language in their agreement.
It has also introduced new legislation making arbitration compulsory for certain disputes. Claims worth over US$1.3 million that concern an international party or party licensed by the Central Bank of Bahrain will be referred to arbitration at the centre.
The centre is designed to support the country’s commercial, banking and financial sectors.
For further details see the Middle East dispute resolution update e-bulletin available on our website at http://www.herbertsmith.com/NR/rdonlyres/7275AF9DCB55- 4B54-B7B5-648AA574B196/14058/Bahrain ChamberofCommercePartnershipwithAAADubaiLic.html .