BAHRAIN Law and Practice Contributed by: Rad El Treki, Noor Al Rayes, Aayush Kainya and Mohamed Al Sari, Al Tamimi & Co.
9. M&A Litigation Relating to Regulatory Decisions
9.3 Standard of Review and Deference to Regulators In Bahrain, the standard of review applied by the courts to regulatory decisions is primarily a legality review centred on administrative law principles rather than a full de novo review of merits. Bahraini courts, particularly the Administrative Court, assess whether a regulator acted within its statutory jurisdiction, fol - lowed due process and avoided abuse of power or manifest error of assessment. 9.4 Interim Relief and Suspension of Decisions Parties can generally obtain interim relief to stay the execution of administrative prohibitions, remedies or fines while an appeal is pending, typically by filing a “stay of execution” request before the Administrative Division of the High Court or the relevant appellate chamber. 9.5 Interaction With Damages and Other Civil Actions Judicial review and follow-on damages actions inter - act through a bifurcated process where the Adminis - trative Division of the High Court serves as the primary gatekeeper for reviewing regulatory conduct. In the context of M&A, if a regulator issues a decision that stalls or collapses a deal, the aggrieved party must typically first challenge the lawfulness of that decision through judicial review to seek an annulment. While Bahraini law – primarily the Civil and Commercial Procedure Code and the Civil Code – allows for civil claims and “follow-on” damages, these are often con - tingent upon establishing a “fault” or “wrongful act” by the regulator. 10. Private Enforcement and Competition/Regulatory Claims 10.1 Follow-On and Standalone Actions In Bahrain, follow-on or standalone damages actions for conduct related to mergers (such as gun-jumping or the exchange of CSI) are legally possible but histori - cally rare in practice. Under the Competition Law, any entity harmed by an “unapproved economic concen - tration” or “anti-competitive arrangement” can seek
9.1 Judicial Challenges to Regulatory Actions In Bahrain, judicial challenges to merger control or national security decisions are highly infrequent, reflecting both the Kingdom’s pro-business orienta - tion and the high degree of deference courts grant to the state on matters of sovereign discretion. Prohibitions are exceptionally rare because the CPA and the MOI prefer to negotiate conditional clearances (remedies) behind closed doors rather than issue a flat rejection. Consequently, the most frequently con - tested decisions are conditional approvals where an investor believes the imposed mitigation measures – such as local data storage or divestiture of sensitive assets – are disproportionate or commercially unvi - able. These cases are usually first channelled through a mandatory administrative grievance process before reaching the High Administrative Court, where the legal standard for reversal is notoriously high, requir - ing proof that the regulator acted with “manifest error” or “abuse of power”. 9.2 Standing and Access to Courts Standing to challenge regulatory decisions is primar - ily granted to the notifying parties and any person or entity who can demonstrate a “direct and personal interest” in the decision, a standard strictly applied by the Administrative Court. Under the Competition Law, third parties such as competitors have a recognised pathway to intervene, as they can file complaints with the Consumer Protection Directorate (acting as the interim competition authority) regarding economic concentrations or anti-competitive arrangements that adversely affect their market position. Consumer groups may also have standing if they can prove that a regulatory decision (such as a merger approval) direct - ly harms consumer welfare or violates the Consumer Protection Law. However, for a challenge to be admissible in court, the petitioner must typically exhaust administrative grievance procedures – such as filing an appeal with the relevant Ministry or the CBB – within the statutory 30-day window before seeking judicial review to annul the decision.
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