BAHRAIN Law and Practice Contributed by: Mohamed Shaban, Mohsin Al Alawi and Qassim Al Fardan, Hassan Radhi & Associates
national Commercial Arbitration, including its 2006 amendments. Where court proceedings are com- menced in respect of a dispute covered by a valid arbitration agreement, the court must refer the parties to arbitration if the objection is raised within the time prescribed by the Model Law. Insurance policies are nevertheless subject to the additional formal protection in Article 696 of the Civil Code. An arbitration condition may not be invoked against the insured unless it has been prominently highlighted by block lettering, larger print or an equiv- alent method. Merely including the clause among lengthy standard conditions may therefore be insuf- ficient. In commercial and reinsurance contracts negotiated between sophisticated parties, arbitration clauses are commonly upheld where the parties’ agreement is clear. To minimise disputes, the clause should iden- tify the seat, applicable rules, number and method of appointment of arbitrators, language, governing law and scope of disputes referred to arbitration. 3.2 Enforcement of Arbitral Awards Bahrain is a party to the New York Convention and has adopted the UNCITRAL Model Law through Law No 9 of 2015. Under Article 35 of the Model Law, an arbitral award is recognised as binding irrespective of the country in which it was made and may be enforced upon written application to the competent Bahraini court. The applicant must submit the award or a copy and may be required to provide an Arabic translation where the award is not in an official language of Bah- rain. Recognition or enforcement may be refused only on the limited grounds stated in Article 36. These include incapacity, invalidity of the arbitration agreement, lack of proper notice, inability to present a case, excess of jurisdiction, procedural irregularity, non-arbitrability and conflict with Bahraini public policy. The enforcement court does not conduct a rehearing on the merits. In practice, difficulties are more likely to concern service, translation, proof of authority, the scope of the arbitration agreement, due-process objections, public policy or the identification and
attachment of assets than a substantive reconsidera- tion of the tribunal’s decision. 3.3 Practical Use of Arbitration in Insurance Matters Arbitration is not the usual mechanism for high-volume retail or motor insurance disputes, which are generally handled through the claims process provided by the CBB complaints framework in the motor insurance or the Bahraini courts. It is more common in reinsurance disputes and in high-value or specialised policies, including major property, engineering, construction, marine, energy and professional liability risks. Arbitration may provide greater procedural privacy than court litigation, particularly where the parties select institutional rules containing confidentiality pro- tections or include an express confidentiality agree- ment. However, confidentiality should not be assumed to arise comprehensively from the Model Law alone. The agreement should address the confidentiality of pleadings, evidence, hearings, awards and informa- tion disclosed during enforcement or annulment pro- ceedings. Personal data processed in the arbitration also remains subject to applicable data protection requirements. An award is not subject to an ordinary court appeal on the facts or law. An application to set aside is the exclusive court recourse and is available only on the limited grounds in Article 34 of the Model Law. The parties may agree on an internal arbitral appellate mechanism, but this is distinct from an appeal to the Bahraini courts. 4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes One developing feature of coverage disputes is the legal characterisation of the insurer’s defence. In par- ticular, an insurer may contend that the event was never within the insuring clause, rather than relying on an exclusion, forfeiture provision or condition that removes an otherwise existing entitlement. This distinction can be significant because Article 696 of the Civil Code prevents an insurer from relying on
14 I NSURANCE L I T IGATI O N 2026
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