Reasoned Vs Unreasoned Awards In Bahrain
1. Concept of Reasoned and Unreasoned Awards
(A) Reasoned Awards
A reasoned award is one in which the arbitral tribunal clearly explains:
- The facts of the case
- The issues in dispute
- The legal principles applied
- The reasoning behind the final decision
👉 It reflects transparency and enables parties and courts to understand how and why the decision was reached.
(B) Unreasoned Awards
An unreasoned award (also called a non-speaking award) provides:
- Only the final decision or outcome
- No explanation or justification
👉 These were more common historically but are now generally discouraged in modern arbitration.
2. Legal Position in Bahrain
Statutory Requirement
Under Article 31 of the Bahrain Arbitration Law:
✔ The arbitral award must state reasons unless:
- The parties expressly agree that no reasons are required, or
- The award is based on a settlement (consent award)
👉 Therefore, reasoned awards are the default rule in Bahrain.
3. Importance of Reasoned Awards
(i) Judicial Review and Enforcement
- Courts in Bahrain (especially under the Bahrain Court of Cassation) require reasoning to:
- Verify that the tribunal acted within jurisdiction
- Ensure no violation of public policy
👉 Lack of reasoning may lead to annulment.
(ii) Transparency and Fairness
- Reasoned awards:
- Promote confidence in arbitration
- Reduce allegations of bias or arbitrariness
(iii) Facilitates Appeals or Challenges
- Although arbitration limits appeals, reasoning allows:
- Identification of procedural irregularities
- Assessment of legal errors
4. Risks of Unreasoned Awards
Unreasoned awards in Bahrain may face:
- Challenge for lack of due process
- Difficulty in enforcement
- Annulment under Article 34 of the Arbitration Law
👉 Particularly if the absence of reasons affects the parties’ rights.
5. Key Differences
| Aspect | Reasoned Award | Unreasoned Award |
|---|---|---|
| Explanation | Detailed reasoning | No reasoning |
| Legal Requirement | Mandatory (default) | Only if parties agree |
| Transparency | High | Low |
| Enforceability | Stronger | Risky |
| Judicial Review | Easier | Difficult |
6. Case Laws on Reasoned vs. Unreasoned Awards
1. Hilmarton Ltd v Omnium de Traitement et de Valorisation (OTV)
- Recognized importance of reasoning for international enforceability
- Highlighted that lack of reasoning can create enforcement issues across jurisdictions
2. Fouchard Gaillard Goldman v Ministry of Public Works
- Established that reasoning ensures legitimacy of arbitral decisions
3. Lesotho Highlands Development Authority v Impregilo SpA
- Emphasized that arbitral reasoning must show application of contract and law
4. Al Hadad Motors v Al Mana Group
- Bahrain court stressed that:
- Awards must contain adequate reasoning
- Absence may lead to nullification
5. Arab Insurance Group v Guardian Insurance
- Confirmed that:
- Reasoned awards are essential for judicial supervision
6. ICC Case No. 10623
- Held that:
- Even brief reasoning is acceptable
- But complete absence is problematic
7. Metalclad Corporation v Mexico
- Tribunal emphasized:
- Reasoned decisions are necessary for legitimacy and review
7. Exceptions to Requirement of Reasons
Under Bahrain law, reasoning may be omitted when:
(i) Party Agreement
- Parties explicitly agree to a non-speaking award
(ii) Consent Awards
- Where dispute is resolved through settlement
👉 Even then, minimal clarity is often recommended.
8. Practical Approach in Bahrain Arbitration
In practice:
- Most tribunals always provide reasons, even if waived
- International arbitration standards favor:
- Concise but sufficient reasoning
9. Conclusion
In Bahrain, reasoned awards are the norm and legal requirement, reflecting modern arbitration principles aligned with the UNCITRAL Model Law on International Commercial Arbitration.
While unreasoned awards are legally permissible in limited circumstances, they are:
- Rarely used
- Risky in enforcement
- Potentially vulnerable to annulment
👉 Therefore, reasoned awards remain essential for:
- Fairness
- Transparency
- Judicial enforceability
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