Freezing Orders And Injunctions In Bahrain Arbitration
1. Legal Framework in Bahrain
(a) Bahrain Arbitration Law
- Legislative Decree No. 9 of 2015
- Based on the UNCITRAL Model Law on International Commercial Arbitration
(b) Civil and Commercial Procedure Law
- Governs:
- Court-issued injunctions
- Enforcement mechanisms
2. Concept of Freezing Orders and Injunctions
(A) Freezing Orders (Mareva Injunctions)
A freezing order restrains a party from:
Disposing of or dissipating assets to frustrate enforcement of an arbitral award.
(B) Injunctions
An injunction is a broader remedy that may:
- Restrain conduct (prohibitory injunction)
- Compel action (mandatory injunction)
3. Powers of Arbitral Tribunals
(A) Interim Measures Authority
Under Bahrain Arbitration Law:
- Tribunals may grant:
- Asset preservation orders
- Injunctions
(B) Limitations
- No direct enforcement power
- Requires court assistance for implementation
4. Powers of Bahraini Courts
(A) Strong Enforcement Authority
Courts may:
- Issue freezing orders
- Grant interim and permanent injunctions
- Enforce tribunal orders
(B) Timing
Courts can act:
- Before arbitration
- During arbitration
- After award (to secure enforcement)
5. Conditions for Granting Freezing Orders
Bahraini courts follow internationally recognized principles:
(1) Good Arguable Case
(2) Real Risk of Asset Dissipation
(3) Urgency
(4) Balance of Convenience
(5) Full and Frank Disclosure (especially ex parte applications)
6. Types of Injunctions in Arbitration Context
(1) Asset Freezing Orders
(2) Anti-Suit Injunctions (rare in Bahrain)
(3) Status Quo Orders
(4) Mandatory Orders
7. Judicial Approach in Bahrain
Bahraini courts:
- Support arbitration proceedings
- Grant relief cautiously
- Avoid interfering with merits
8. Enforcement of Orders
Court Orders:
- Directly enforceable
Tribunal Orders:
- Require court recognition
9. Key Case Laws (International & Persuasive)
Since Bahraini case law is limited, courts rely on established international jurisprudence.
1. Mareva Compania Naviera SA v International Bulkcarriers SA
Principle:
- Established modern freezing injunction (Mareva injunction)
Relevance:
- Foundation for asset-freezing orders globally, including Bahrain
2. The Siskina (Owners of Cargo Lately Laden on Board) v Distos Compania Naviera SA
Principle:
- Injunction must be linked to a substantive cause of action
Relevance:
- Limits scope of freezing orders
3. Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH
Principle:
- Clarified risk of asset dissipation requirement
Relevance:
- Influences threshold for granting freezing orders
4. American Cyanamid Co v Ethicon Ltd
Principle:
- Established test for injunctions:
- Serious issue
- Balance of convenience
Relevance:
- Widely applied in arbitration-related injunctions
5. Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd
Principle:
- Courts may grant interim injunctions in support of arbitration
Relevance:
- Supports Bahraini court intervention
6. Mobil Cerro Negro Ltd v Petroleos de Venezuela SA
Principle:
- Courts can enforce arbitration-related interim measures
Relevance:
- Confirms supportive judicial role
10. Practical Scenarios
Scenario 1:
- Respondent transferring assets abroad
✔ Court grants freezing order
Scenario 2:
- Tribunal orders asset preservation
✔ Court enforces order
Scenario 3:
- Breach of contractual obligation during arbitration
✔ Injunction granted to maintain status quo
11. Risks and Challenges
(A) Overuse of Injunctions
- May interfere with arbitration
(B) Enforcement Abroad
- Freezing orders may not be recognized internationally
(C) High Threshold
- Courts require strong evidence
12. Drafting Recommendations
To enhance protection:
(1) Include Interim Relief Clause
- Allow tribunal and court relief
(2) Provide for Emergency Arbitration
(3) Specify Jurisdiction
- Clarify court authority
13. Advantages in Bahrain
- Strong court support
- Alignment with international standards
- Effective enforcement mechanisms
14. Conclusion
In Bahrain:
- Freezing orders and injunctions are key tools to protect arbitration
- Courts play a central enforcement role
- Tribunals provide procedural flexibility
The Bahraini framework ensures that arbitration is not undermined by asset dissipation or procedural abuse, maintaining both efficiency and fairness.
RELATED Blog
comments