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Enforcement of Foreign Judgments: Bahrain

LEGISLATION

Treaties

Is your country party to any bilateral or multilateral treaties for the reciprocal recognition and enforcement of foreign judgments? What is the country’s approach to entering into these treaties, and what, if any, amendments or reservations has your country made to such treaties?

Bahrain is a signatory to a number of bilateral and multilateral recognition treaties. These include:

  • The Hague Convention for the Pacific Settlement of International Disputes 1907;
  • The Convention on the Settlement of Investment Disputes between States and Nationals of other States 1965;
  • The Riyadh Arab Agreement for Judicial Cooperation 1983 (the Riyadh Convention);
  • The Gulf Cooperation Council Convention for the Execution of Judgments, Delegations and Judicial Notifications 1995 (the GCC Convention);
  • The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention); and
  • various bilateral investment treaties and free trade agreements.

As a general rule, the Bahraini courts will enforce foreign judgments without requiring prior recognition proceedings as long as the judgment originates from a country that is also a signatory to one of the same treaties, although this is subject to the Bahraini courts’ discretion, particularly where the relevant convention, such as the GCC Convention, does not provide a specific procedure for such recognition.

Where reciprocal recognition is not established via a treaty between Bahrain and the foreign country, the recognition of foreign judgments is governed by article 16 of Decree-Law No. 22/2021 on the Promulgation of the Execution Law in Civil and Commercial Matters (effective as of 17 March 2022) and foreign judgments may still be recognised following an application to the High Civil Court for the judgment to be recognised. This is essentially a fresh claim in which the court may choose to re-examine the issues should the defendant submit a defence.

Intra-state variations
Is there uniformity in the law on the enforcement of foreign judgments among different jurisdictions within the country?

Yes, all judgments capable of being enforced in accordance with Bahrain law requirements are treated the same for the purpose of enforcement. This is subject to the caveats of the subject matter discussed below.

Sources of law
What are the sources of law regarding the enforcement of foreign judgments?

In Bahrain, the primary source of law regarding the enforcement of foreign judgments is Decree-Law No. 22/2021 on the Promulgation of the Execution Law in Civil and Commercial Matters. This governs the treatment of foreign judgments and the limitations on enforcement of foreign judgments.

The recognition of foreign judgments may be subject to principles of shariah law to the extent that the enforcement of such may risk contradicting shariah law provisions in Bahrain.

Hague Convention requirements
To the extent the enforcing country is a signatory of the Hague Convention on Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, will the court require strict compliance with its provisions before recognising a foreign judgment?

Bahraini courts will not enforce a foreign judgment unless the foreign court that handed down the judgment is competent in accordance with the international rules of jurisdiction set down in the laws of that country. The court judgment must also be final in accordance with the law of the jurisdiction of the court handing down the judgment. Subject to this, and other public policy requirements, the Bahraini courts would be willing to enforce a foreign judgment.

 BRINGING A CLAIM FOR ENFORCEMENT
Limitation periods
What is the limitation period for enforcement of a foreign judgment? When does it commence to run? In what circumstances would the enforcing court consider the statute of limitations of the foreign jurisdiction?

There are no specific provisions in Decree-Law No. 22/2021 regarding the limitation periods for enforcement of a foreign judgment.

Under Bahraini law, all civil claims are subject to the statute of limitations, which prescribes a general limitation period of 15 years (from the date the cause of action arose) unless the law provides for another period. There are shorter limitation periods applicable that vary depending on the nature of the claim. For instance, commercial claims are generally barred after 10 years from the date of due performance of the commercial obligation.

Any judgment being enforced in Bahrain must be final and enforceable in accordance with the laws of its originating country or courts.

Types of enforceable order
Which remedies ordered by a foreign court are enforceable in your jurisdiction?

All judgments must be final to be recognised and enforced by the Bahraini courts. Provided that a certificate of final judgment or enforceability can be obtained from the country in which the judgment was obtained, default and summary judgments can also be recognised and enforced in Bahrain.

Enforcement of an interim judgment will be difficult to enforce in Bahrain as it would not be deemed ‘final’ for the purposes of article 16 of Decree-Law No. 22/2021 (see below).

As to the remedies ordered in a foreign judgment, provided that these do not constitute a breach of public order or policy in Bahrain, there is no restriction on the type of remedy that the Bahraini courts can enforce.

Once the foreign judgment is recognised, a judge of the execution court may make the orders and decisions generally available for the enforcement of domestic judgments, including:

  • specific performance and associated fines;
  • placement of attachment on the bank accounts, property and movable assets or lifting of such attachment;
  • sale of property that is under attachment;
  • imprisonment of a party who obstructs the execution procedures or fails to cooperate with the execution proceedings;
  • payment of amounts collected from the judgment debtor to the judgment creditor or surrender of the disputed items to the latter party;
  • precautionary or provisional measures such as freezing orders, appointment of a guardian, custodial or judicial receiver over assets, orders to prevent assets from being removed from the jurisdiction; or
  • authorising the use of force whenever required and seeking the assistance of the police, if necessary.
 Competent courts
Must cases seeking enforcement of foreign judgments be brought in a particular court?

Applications for recognition of foreign judgments and enforcement orders are made to the High Court (article 16 of Decree-Law No. 22/2021).

Recognised judgments or enforcement orders are then enforced, together with local court judgments, by the court of execution, in accordance with article 1 of Decree-Law No. 22/2021: ‘The Courts of Execution shall be competent to enforce writs of execution. Execution shall take place under the supervision and control of the Judge of the Court of Execution, and a sufficient number of private execution persons to assist him in the execution procedures’.

Article 2 of Decree-Law No. 22/2021 defines ‘writs of execution’ as ‘judgments and decisions made by the courts in their various kind and degrees, arbitral awards, after ordering their enforcement by the competent court, authenticated deeds, conciliation reports that are ratified by the courts, and any other documents so characterized by law’.

Therefore, an execution court will deal with foreign judgments being enforced under any applicable treaty or agreement, foreign judgments that have been recognised by the Bahraini courts and foreign judgments confirmed by the Bahraini courts following being heard as a fresh case.

Separation of recognition and enforcement
To what extent is the process for obtaining judicial recognition of a foreign judgment separate from the process for enforcement?

The recognition procedure commences with the presentation of the foreign judgment before the Bahraini High Civil Court together with the filing of requests that such judgment is recognised and an enforcement order issued. Payment of the prescribed court fees is also required.

Once recognised, enforcement of the judgment is then undertaken by the Bahraini Court of Execution. Domestic authorities must execute the foreign judgments as issued (ie, not in-part) provided that they do not constitute a breach of public policy.

OPPOSITION
Defences
Can a defendant raise merits-based defences to liability or to the scope of the award entered in the foreign jurisdiction, or is the defendant limited to more narrow grounds for challenging a foreign judgment?

In accordance with articles 22 and 23 of Decree-Law No. 22/2021, the role of the execution court is to enforce the judgments received without entertaining objections by a party to the judgment itself. If there appears to be any element of a judgment that is practically unenforceable, the execution court judge must not offer any opinion as to the resolution of the judgment, and shall instead seek a clarification of the relevant section in writing from the court that handed down said judgment.

Injunctive relief
May a party obtain injunctive relief to prevent foreign judgment enforcement proceedings in your jurisdiction?

Various enforcement or injunctive relief procedures are available against individuals or companies and their assets. These forms of relief are most commonly sought domestically either through the Court of Urgent Matters (at the beginning or during proceedings) or the execution court when enforcing a final judgment.

REQUIREMENTS FOR RECOGNITION
Basic requirements for recognition
What are the basic mandatory requirements for recognition of a foreign judgment?

Under article 16(3) of Decree-Law No. 22/2021, no enforcement order of a foreign country judgment may be passed until the following has been ascertained:

  • that the courts of Bahrain are not competent to hear the case in respect of which the court judgment or order was passed, and that the foreign courts which passed it are competent in accordance with the international rules of jurisdiction set down in the laws thereof;
  • that the litigants in the case in respect of which the judgment was issued were duly summoned and properly represented;
  • that the judgment or order has become final in accordance with the law of the court that passed it; and
  • that the judgment or order does not conflict with any judgment or order previously passed by the courts of Bahrain and does not provide for anything that constitutes a breach of public order or morality.
Other factors
May other non-mandatory factors for recognition of a foreign judgment be considered and, if so, what factors?

The treatment of foreign judgments may depend on the country from which the judgment originates and whether a treaty exists between Bahrain and that country.

A party seeking recognition of a foreign judgment in Bahrain must be aware that, while civil and commercial law in Bahrain is not governed primarily by shariah law, the courts will consider certain principles of shariah law that form parts of Bahrain’s public policy, and therefore may refer to paragraph 3(4) of article 16 of Decree-Law No. 22/2021 to justify rehearing the case.

Procedural equivalence
Is there a requirement that the judicial proceedings where the judgment was entered correspond to due process in your jurisdiction and, if so, how is that requirement evaluated?

Other than certain limited provisions for reciprocal recognition and enforcement proceedings, there is no requirement for the due process under a foreign jurisdiction to correspond with that in Bahrain for a judgment to be enforceable.

The due process that must have, however, been complied with in all cases is that litigants in the case in respect of which the judgment was issued were duly summoned and properly represented. Evidence of this will need to be provided to the High Court as part of any application for recognition.

JURISDICTION OF THE FOREIGN COURT
Personal jurisdiction
Will the enforcing court examine whether the court where the judgment was entered had personal jurisdiction over the defendant and, if so, how is that requirement met?

The Bahraini High Civil Court will evaluate whether the foreign courts that handed down the judgment were competent in accordance with the international rules of jurisdiction set down in the laws of that country.

Subject-matter jurisdiction
Will the enforcing court examine whether the court where the judgment was entered had subjectmatter jurisdiction over the controversy and, if so, how is that requirement met?

Part of the Bahraini High Civil Court’s assessment of competency of the issuing court may involve a subject matter jurisdiction assessment, however, insofar as the judgment overcomes the steps listed in paragraph 3 of article 16 of the Decree-Law No. 22/2021, the Court will not retry the merits of the case.

Service
Must the defendant have been technically or formally served with notice of the original action in the foreign jurisdiction, or is actual notice sufficient? How much notice is usually considered sufficient?

The defendant must have been properly served with notice of the original action in accordance with the laws governing service in that country. The Bahraini High Civil Court will evaluate whether the litigants in the case in respect of which the judgment was issued were duly summoned, and evidence of such should be presented together with any recognition application.

Fairness of foreign jurisdiction
Will the court consider the relative inconvenience of the foreign jurisdiction to the defendant as a basis for declining to enforce a foreign judgment?

Provided the Bahraini courts are satisfied that the foreign court, and not the local courts, had jurisdiction to hear the matter, an inconvenience to the defendant vis-à-vis foreign jurisdiction is not a consideration of the Bahraini courts when deciding on a recognition and enforcement application.

EXAMINATION OF THE FOREIGN JUDGMENT
Vitiation by fraud
Will the court examine the foreign judgment for allegations of fraud upon the defendant or the court?

The Bahraini High Civil Court will evaluate the foreign judgment on certain terms, including whether it contains anything that constitutes a breach of public policy (if so, it will not be recognised). Where there is reciprocity, the merits and the arguments made in the judgment are not assessed by the Bahraini courts.

Public policy
Will the court examine the foreign judgment for consistency with the enforcing jurisdiction’s public policy and substantive laws?

Paragraph 3(4) of article 16 of Decree-Law 22/2021 allows the Bahraini High Civil Court to ensure that the foreign judgment would not be inconsistent with the ‘public order or morality’ of Bahrain.

This principle is established in the Gulf Cooperation Council (GCC) and is enshrined in some treaties themselves. For example, the recognition of a foreign judgment can also be rejected under the Riyadh Convention (of which Bahrain is a member), if such recognition would contradict the principles of shariah law or the constitution and public order of the requested country.

Conflicting decisions
What will the court do if the foreign judgment sought to be enforced is in conflict with another final and conclusive judgment involving the same parties or parties in privity?

One of the pillars of enforcement by the Bahraini execution court for foreign judgments is that they will not enforce any foreign judgment that conflicts with a previous decision or order of a Bahraini court.

Enforcement against third parties
Will a court apply the principles of agency or alter ego to enforce a judgment against a party other than the named judgment debtor?

It will be at the discretion of the execution court whether an enforcement against a third party would be effective. However, this may depend upon whether that third party was duly summoned and properly represented.

Alternative dispute resolution
What will the court do if the parties had an enforceable agreement to use alternative dispute resolution, and the defendant argues that this requirement was not followed by the party seeking to enforce?

Under article 16 of the Decree-Law No. 22/2021, the Bahraini High Civil Court must be satisfied that the foreign courts that passed the judgment were competent to have heard the case and the procedural rules of that jurisdiction were followed. This may include whether the original judgment was heard by the correct means and forum.

Favourably treated jurisdictions
Are judgments from some foreign jurisdictions given greater deference than judgments from others? If so, why?

The Gulf Cooperation Council Convention for the Execution of Judgments, Delegations and Judicial Notifications 1995 (GCC Convention) (article 1) states that each of the GCC countries (of which Bahrain is a member) shall:

execute the final judgments issued by the courts of any member state in civil, commercial and administrative cases and the personal affairs cases in accordance with the procedures as provided under this agreement, provided that the court that issued the judgment has the jurisdiction in accordance with the international jurisdiction as applicable in the member state where the judgment is required to be executed or has the jurisdiction in accordance with the provisions of this agreement.

Enforcement under the Riyadh Convention (article 32) requires the competent judicial body to establish that the judgment complies with the provisions of the Riyadh Convention and to confirm this in its judgment. The competent body will then order appropriate measures to be taken to give the judgment the same enforceable status it would have had if it had been made by the requested party.

In the absence of a treaty such as the GCC or Riyadh Convention, or in the absence of the principle of reciprocity between Bahrain and the jurisdiction in which the foreign judgment originates, a fresh claim must be filed before the competent court requesting that it acknowledges and recognises such judgment – the foreign judgment may be used as evidence in support of this application.

It may be said, therefore, that judgments subject to reciprocal treaties, such as the GCC or Riyadh Convention, are given greater deference than non-treaty jurisdiction judgments.

Alteration of awards
Will a court ever recognise only part of a judgment, or alter or limit the damage award?

If the award is recognised, a party must seek enforcement from a Bahraini execution court. Domestic authorities must execute the foreign judgments as issued (ie, not in part), provided they do not contradict shariah law and public policy.

 Effect of sanctions
What effect do foreign or domestic sanctions have on the enforcement of foreign judgments in your jurisdiction? Will a court refuse enforcement of a judgment against or in favour of a sanctioned entity or individual? If so, which sanctions regimes do the courts of your jurisdiction recognise?

Sanctions can form part of a country’s public policy. The Bahraini courts would therefore consider whether the enforcement of a judgment against or in favour of a sanctioned entity or individual would contradict Bahrain’s public policy. If so, the courts have the discretion to not enforce a judgment if the requirements under article 16(3) of Decree-Law No. 22/2021 are not satisfied.

Whilst sanctions imposed by the United Nations and others may be recognised by Bahrain, they would not be immediately enforceable in Bahrain unless the relevant authorities take active steps to enforce them in Bahrain.

AWARDS AND SECURITY FOR APPEALS
Currency, interest, costs
In recognising a foreign judgment, does the court convert the damage award to local currency and take into account such factors as interest and court costs and exchange controls? If interest claims are allowed, which law governs the rate of interest?

In recognising a foreign judgment, the Bahraini courts will determine the judgment amount in the currency of the country in which the judgment originates or its equivalent in Bahraini dinars. Interest is recoverable in Bahrain and the rates of interest are enforced in accordance with the provisions for the same, as set out in the judgment.

Security
Is there a right to appeal from a judgment recognising or enforcing a foreign judgment? If so, what procedures, if any, are available to ensure the judgment will be enforceable against the defendant if and when it is affirmed?

To appeal a foreign judgment that has been enforced by the Bahraini Execution Court, a party must submit an application to the Bahraini High Court.

To protect the recovery position, concurrent applications can be made to freeze a defendant’s assets at the time of filing recognition proceedings. Appeals to recognition and enforcement orders do not usually have the effect of staying the enforcement proceedings.

ENFORCEMENT AND PITFALLS
Enforcement process
Once a foreign judgment is recognised, what is the process for enforcing it in your jurisdiction?

Enforcement of final judgments in Bahrain is carried out predominantly by the execution court. As with any jurisdiction, the length of time it takes for a judgment to be settled is almost entirely dependent on the availability of the debtor’s assets.

The Bahraini execution courts are efficient and dependable, with systems in place for timely recovery should assets be available.

The swiftest recovery option is, of course, liquid assets held by the banks in Bahrain. The execution court requests the debtor’s cash asset position from the Central Bank of Bahrain and, should there be monies held, the execution court will issue an order that an amount up to the value of the judgment be frozen and transferred to the court account. In these circumstances, enforcement can take as little as eight weeks.

If, however, there are no liquid assets available, and property is required to be seized and auctioned, or judicial receivers appointed to manage property (for example, in the case of a business or rental property), the time period for enforcement can extend considerably. There is, of course, no fixed amount of time for recovery in these circumstances and they are dealt with on a case-by-case basis.

The execution court fees are governed by Legislative Decree No. 3 of 1972 (as amended) (the Judicial Fees Law). In accordance with the Judicial Fees Law, on application of the enforcement of a foreign judgment or order, the applicant is required to pay 1 per cent of the amount awarded to the court. In addition, the execution court charges a fee per enforcement order – this means that each application for a freeze or a seizure of assets is charged separately in accordance with the value of the claim.

Pitfalls
What are the most common pitfalls in seeking recognition or enforcement of a foreign judgment in your jurisdiction?

Parties seeking to enforce foreign judgments in Bahrain should be aware of the following:

  • parties cannot undertake this either themselves or using their foreign jurisdiction lawyers as there is no right of audience for non-Bahrain qualified lawyers in the Bahraini courts relevant to recognition and enforcement of foreign judgments. Bahraini counsel will need to be engaged to file proceedings and appear at court;
  • all original documents will need to be legalised or apostilled (depending on whether the originating country is a party to the Apostille Convention); and
  • all documents will need to be translated into Arabic by a court-certified translator.
UPDATE AND TRENDS
Hot topics
Are there any emerging trends or hot topics in foreign judgment enforcement in your jurisdiction?

Bahrain, along with other Arab countries, has expressed its support for a diplomatic resolution in respect of the Russia/ Ukraine conflict. Bahrain has, however, not imposed any sanctions on Russia itself, and therefore there are no restrictions in relation to the enforcement of judgments issued by Russian courts.

The Bahraini High Civil Court must however be satisfied that the foreign courts that issued the judgment (ie, the Russian courts, in this case) were competent to have heard the case and that the procedural rules of that jurisdiction were followed, including consideration as to whether the original judgment was heard by the correct means and forum.

Bahrain is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) and has been since 6 April 1988.

Arbitration as a dispute resolution mechanism has risen in popularity, and many in the Gulf region are now choosing it as a means of dispute resolution over litigation, due to its flexibility, confidentiality and speed of enforcement. In addition to foreign court judgments, Bahrain established its own arbitration institution in 2009 when it partnered with the American Arbitration Association (AAA), enabling it to quickly establish itself as a credible and attractive arbitration centre with well-recognised rules (the AAA being almost 100 years old).

It was known as the Bahrain Chamber for Dispute Resolution – American Arbitration Association (the BCDR-AAA). In 2022, the partnership was amicably concluded, and the centre is now an independent arbitration centre known as the Bahrain Chamber for Dispute Resolution (the BCDR). In October 2022, the BCDR issued new arbitration rules to replace the previous 2017 rules. The new rules automatically apply to any arbitration commenced before the BCDR on or after 1 October 2022. The new rules further solidify the BCDR’s independence and mark a significant milestone in its journey to becoming a leading institution for dispute resolution in the region.

Moreover, and rather significantly, pursuant to Resolution No. 28/2023 issued by the Ministry of Justice, the English language may now be used before Bahraini courts in specific cases. The English language may also be used in certain cases before the BCDR and in litigation proceedings supporting arbitration proceedings, where the language of the arbitration is English, the value of the dispute or contract exceeds 500,000 Bahraini dinars and the Court’s assistance is sought in respect of: the appointment or disqualification of arbitrators; interim measures; the enforcement of an arbitral award; or an application to set aside an arbitral award. It would therefore appear that Bahrain may be headed towards recognising the English language as an official language of the court, which would include recognising foreign judgments or awards issued in English. This would eliminate the need for written translations and the engagement of professional interpreters, which will save both time and costs.


Reproduced with permission from Law Business Research Ltd. This article was first published in Lexology GTDT – Enforcements of Foreign Judgments. For further information, please visit the site here

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