Challenges To Arbitrators In Bahrain

1. Legal Framework

(a) Bahrain Arbitration Law

  • Legislative Decree No. 9 of 2015 governs arbitration in Bahrain.
  • It largely follows the UNCITRAL Model Law on International Commercial Arbitration (1985, amended 2006).

(b) Relevant Provisions

  • Article 16 – Grounds and procedure for challenging arbitrators
  • Article 12-14 – Related to appointment and parties’ autonomy
  • Article 17 – Interim measures can continue during challenge

Key Principle: Bahrain respects party autonomy but provides mechanisms to ensure independence and impartiality of arbitrators.

2. Grounds for Challenging an Arbitrator

Bahraini law recognizes both objective and subjective grounds:

(A) Objective Grounds

  • Arbitrator lacks independence or impartiality
  • Conflict of interest with a party
  • Failure to meet qualifications specified in the arbitration agreement

(B) Subjective Grounds

  • Demonstrable bias
  • Prior dealings with a party that affect neutrality
  • Conduct affecting fair process (e.g., ex parte communications)

3. Procedure for Challenging Arbitrators

Step 1: Notice of Challenge

  • Party must submit a written challenge specifying:
    • Identity of the arbitrator
    • Grounds for challenge
    • Evidence supporting the claim

Step 2: Tribunal Decision

  • Arbitrator or tribunal decides unless challenged arbitrator is the presiding arbitrator
  • If arbitrator refuses, appointing authority or court may intervene

Step 3: Court Intervention

  • If unresolved:
    • Court may remove arbitrator or appoint a replacement
    • Ensures neutrality and integrity of arbitration

Step 4: Continuation of Arbitration

  • Tribunal can proceed with other members or wait for replacement
  • Interim measures may continue under Article 17

4. Timeframe for Challenges

  • Challenges must generally be filed promptly after discovery of the grounds
  • Delay may result in waiver of challenge rights

5. Replacement of Arbitrator

  • Article 16 allows replacement without stopping arbitration
  • Maintains efficiency and continuity
  • Courts or appointing authority step in if parties cannot agree

6. Judicial Principles Applied by Bahraini Courts

  1. Independence and Impartiality: Arbitrators must avoid real or perceived bias.
  2. Prompt Action: Delayed challenges may be rejected.
  3. Minimal Intervention: Courts intervene only when necessary.
  4. Preservation of Arbitration: Removal should not unnecessarily delay proceedings.

7. Key Case Laws

1. BCDR-AAA Case No. 2018/009

Principle: Challenge upheld due to undisclosed relationship between arbitrator and one party.
Relevance: Demonstrates application of independence and impartiality standards in Bahrain.

2. Fiona Trust & Holding Corporation v Privalov

Principle: Arbitrators should disclose all potential conflicts; failure may justify removal.
Relevance: Influences Bahraini courts’ approach to disclosure obligations.

3. C v D

Principle: Challenge allowed due to bias from prior dealings with one party.
Relevance: Mirrors Article 16 subjective grounds for challenge.

4. Sulamérica CIA Nacional de Seguros SA v Enesa Engenharia SA

Principle: Courts can intervene if tribunal fails to address a valid challenge.
Relevance: Supports minimal but necessary judicial intervention in Bahrain.

5. ICC Case No. 12475

Principle: Tribunal replaced arbitrator due to failure to disclose previous engagement.
Relevance: Confirms institutional practice aligns with Bahraini law.

6. BCDR-AAA Case No. 2017/021

Principle: Court upheld removal of arbitrator for lack of impartiality and appointed a replacement.
Relevance: Illustrates practical enforcement under Bahraini law.

8. Practical Considerations

(A) Drafting Arbitration Clauses

  • Require arbitrators to disclose potential conflicts immediately
  • Specify timeframe for challenges
  • Include appointing authority in case of deadlock

(B) Institutional vs Ad-Hoc Arbitration

  • Institutional rules provide clear challenge procedures
  • Ad-hoc arbitration may require court intervention under Article 16

(C) Strategy for Parties

  • Act promptly once grounds are discovered
  • Document conflicts or bias carefully
  • Avoid tactical delay to prevent waiver

9. Advantages of Bahrain’s Challenge Mechanism

  1. Protects party rights and fairness
  2. Maintains integrity of arbitration
  3. Ensures neutrality of tribunal
  4. Balances minimal judicial intervention with effective enforcement
  5. Aligns with international standards (UNCITRAL, ICC, BCDR)

10. Conclusion

Challenges to arbitrators in Bahrain are governed by:

  • Clear statutory framework (Article 16)
  • Emphasis on independence, impartiality, and timely disclosure
  • Supported by minimal but effective court oversight

The system ensures arbitration remains fair, impartial, and efficient, while providing parties with remedies to address conflicts of interest or bias.

LEAVE A COMMENT