The Bahrain Chamber for Dispute Resolution, incorporated in 2009, recently released its Annual Report for 2022. We take a look at some of the highlights, including its new sports arbitration rules, and what that means for dispute trends in the region.

Commercial arbitration continues to grow in the Middle East, with Dubai and Saudi Arabia arguably leading the way as arbitration hubs for the region (and institutions such as the Saudi International Arbitration Centre gaining prominence).

Similarly, other countries in the region are  focusing on improving how they are perceived  as arbitration centres. In Bahrain, the Bahrain Chamber for Dispute Resolution (the “BCDR”) was incorporated in 2009, and until last year, was operated in conjunction with the American Arbitration Association. In the first year after the termination of that relationship, the BCDR has recently released its Annual Report for 2022.

A look at the casework

The BCDR’s casework comprises disputes brought before the BCDR Court (referred to as ‘Section 1’ cases) and disputes referred to the BCDR’s international arbitration wing (referred to as ‘Section 2’ cases).

In terms of caseload, the BCDR has performed solidly. There were a total of 45 new cases registered in 2022, worth approximately USD 450 million. Of these 45 cases, 36 were Section 1 cases and 9 were Section 2 cases, potentially reflecting use by both domestic and international parties. There was a particular spike in the number of Section 2 cases: between 2019 and 2022, the BCDR registered a total of 31 Section 2 cases, representing around 75% of the total number of Section 2 cases registered since its inception.

Of the 421 cases filed with the BCDR since its inception, around a quarter were in the banking and finance sector, with general commercial and Islamic finance also making up a large share of the caseload.

Around two thirds of these 421 cases involved at least one non-Bahraini party, though only 5% involved exclusively non-Bahraini parties.

Revamping the BCDR Rules of Arbitration

Building on  the 2017 edition, the BCDR's amended 2022 rules introduced new provisions on third-party funding and security for costs; the aim being to  ensure that potential conflicts of interest related to third-party funding are disclosed and that the tribunal's power to order security for costs are explicitly stated.

There have also been refinements to some of the existing rules:

• Codifying the BCDR’s practice of allowing a non-defaulting party to cover a defaulting party’s portion of the case management fee before the BCDR resorts to the suspension or termination of the proceedings for failure to pay these fees (Article 5.4 and Paragraph of the Fee Schedule)
• Empowering the BCDR to select an arbitrator in default of a nomination by a party, or where the parties have not reached an agreement on party nomination.
• Requiring tribunal-appointed experts to affirm their impartiality, aligning with the standards set for arbitrators.
• Enabling the tribunal or BCDR to issue an order terminating the arbitration if no steps have been taken in the arbitration for at least six months and no justifiable objections to termination are raised by the parties.

Introduction of the 2022 BCDR Sports Arbitration Rules

Recently, the Gulf region has hosted many high-profile international sports events, including the 2022 FIFA World Cup in Qatar,  Formula 1 races across Bahrain, Abu Dhabi, and Saudi Arabia, as well as leading tennis, golf, equestrian, and other competitions. Such a concentration of events presents the possibility for disputes between athletes, sporting bodies, and various organizers, all necessitating swift and specialised resolution processes. In response, the BCDR released its Sports Arbitration Rules in March 2022 (the “BCDR Sports Rules”).

The BCDR Sports Rules closely mirror, and in some cases are identical, to the 2022 BCDR Arbitration Rules. The key differences include:

• Sports arbitration agreement: as well as being contractual, the arbitration agreement under the BCDR Sports Rules may be contained in the statutes or regulations of sporting bodies.
• Appeals jurisdiction: the BCDR Sports Rules can, subject to express written agreement, operate as a platform to appeal a decision or award issued by a sporting body.
• Representation: given the prevalence of parties being represented by agents in sports disputes, the BCDR Sports Rules allow for parties to be represented by authorised individuals.

Navigating the future

The amendments by the BCDR to its commercial arbitration rules, and introduction of the BCDR Sports Rules, evidence a resolve to be at the forefront of arbitration services in MENA. As arbitration grows in that region, centres like the BCDR are likely to have a significant role to play. It will be interesting to see how such centres perform and develop in the future.