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Scope Of Arbitrable Disputes In Bahrain

Scope of Arbitrable Disputes in Bahrain

In Bahrain, arbitration is governed primarily by Legislative Decree No. 9 of 2015 (the “Arbitration Law”), which adopts the UNCITRAL Model Law in its entirety. This modern legal framework is designed to support commercial arbitration and aligns Bahrain with international best practices. 

An important starting point is that, under Bahraini law:

• There are no express statutory exclusions defining a comprehensive list of non‑arbitrable disputes. 
• Certain matters are recognised as non‑arbitrable in practice because they involve subject matter that parties cannot validly submit to private adjudication due to public policy or exclusive judicial competence. Examples typically include family law, criminal law, and purely public policy issues. 
• Tribunals and courts in Bahrain have authority to determine arbitrability, including whether subject matter falls within the parties’ arbitration agreement. 

1. Commercial/Contractual Disputes are Arbitrable

Principle: Ordinary commercial and contractual disputes arising out of business contracts are fully arbitrable in Bahrain, subject only to the existence of a valid arbitration agreement.

Case Law Example 1:
In a landmark ruling involving a subcontracting chain, the Bahrain Court of Cassation (Case No. 31 of 2023) held that disputes between commercial parties under interconnected contracts (main contract, subcontract, sub‑subcontract) could be arbitrated. The Court found that where the arbitration clause in a subcontract applied by reference to related contracts, the dispute over performance and payment was arbitrable. This confirms Bahrain’s arbitration regime is wide‑ranging regarding commercial disputes. 

2. Matters of Arbitrability: Public Policy and Non‑Commercial Matters

Principle: While Bahrain law does not list non‑arbitrable matters, disputes involving criminal law, family status, or pure public policy typically remain outside arbitration.

Case Law Example 2 (Inferred Practice):
Courts in Bahrain have historically recognised that arbitration cannot oust exclusive judicial competence in matters such as family status (e.g., divorce, inheritance of minors) and disputes touching criminal sanctions. Though specific judgment names in Bahrain may not be reported, this follows established practice under the Arbitration Law and Model Law principles and is supported by procedural norms indicating such exclusions. 

3. Arbitrability of Jurisdiction and Kompetenz‑Kompetenz

Principle: Tribunals themselves are empowered to address whether a dispute is arbitrable—this doctrine is known as Kompetenz‑Kompetenz, allowing arbitral tribunals to rule on their own jurisdiction (including arbitrability) as a preliminary or substantive issue.

Case Law Example 3:
In Case No. 200 of 2023 (Court of Cassation, 24 June 2024), the Bahrain Court of Cassation reaffirmed that tribunals have authority to decide on jurisdiction and arbitrability under Article 16 of the Arbitration Law. The Court limited judicial review at the appointment stage to a prima facie check of whether an arbitration agreement exists, and stressed that substantive arbitrability challenges should be decided by the arbitral tribunal first. 

4. Third Parties and Non‑Signatories: Scope of Arbitration Agreements

Principle: Parties to a contract may extend the arbitration agreement’s scope even to non‑signatories in limited circumstances where consent can be inferred from the contractual chain of obligations.

Case Law Example 4:
In Case No. 31 of 2023, the Bahrain Court of Cassation acknowledged that a main contractor — not originally a signatory to the subcontract’s arbitration clause — could be bound by that clause if the contract structure and interrelated obligations indicated consent to resolve disputes through arbitration on the same subject matter. This demonstrates expansion of arbitrability where commercial reality and consent justify it. 

5. Arbitrability and Mediation/Dispute Resolution Sequence

Principle: Multi‑tiered dispute resolution clauses requiring steps such as mediation before arbitration can impact arbitrability if interpreted as a condition precedent. Arbitration may still proceed where the parties clearly intend arbitration as the final stage.

Case Law Example 5:
In the Bahrain Court of Cassation decision of 19 June 2023, Case No. 815 of 2022, the Court clarified that invoking mediation does not automatically waive the right to arbitrate unless the mediated settlement disposes of the dispute. This case holds that agreed dispute processes (mediation followed by arbitration) are part of the scope that the arbitral process can respect, and arbitration remains arbitrable once all agreed conditions are met. 

6. Limits: Arbitration and Public Policy

Principle: Even where arbitrability exists, an arbitral award may fail enforcement if the subject matter contravenes public policy. Arbitrability must not conflict with core legal principles or public order.

Case Law Example 6 (Reinforcing Principle):
In enforcement contexts, Bahraini courts have held that enforcement of an arbitration award can be refused where the dispute concerns non‑arbitrable subject matter or public policy, such as disputes touching sovereign state functions, essential regulatory public policy or certain tax matters. While specific case names are less widely reported, this aligns with Article 36 of the Arbitration Law and enforcement jurisprudence on public policy exclusions. 

Summary: Key Principles on Arbitrability in Bahrain

Concluding Notes

• Bahrain’s arbitration law, modelled on the UNCITRAL framework, embraces a broad scope of arbitrable disputes, especially in commercial contexts, while retaining certain public policy and jurisdictional exceptions.
• The judiciary — particularly the Court of Cassation — has played a proactive role in shaping arbitrability, reaffirming tribunal autonomy over jurisdiction, expanding arbitration to connected commercial actors, and clarifying how arbitration interacts with mediation and public policy concerns.
• Foreign and domestic parties can generally agree to arbitrate commercial, financial, and contractual disputes, subject to clear arbitration clauses and compliance with the written form requirements under Bahraini law. 

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