A NEW government-drafted law on international commercial arbitration in Bahrain has been approved.
Shura Council yesterday approved the bill, which had been "urgently" referred by the Cabinet - meaning members only had two weeks to discuss the matter.
Another government-drafted law on commercial disputes involving foreign elements was also approved.
Both bills were passed at the end of last month by a narrow margin of MPs, who clashed with Justice, Islamic Affairs and Endowments Minister Shaikh Khalid bin Ali Al Khalifa and Parliament and Shura Council Affairs Minister Ghanim Al Buainain over the government's use of "urgent" legislation.
Under the constitution, if "urgent" legislation is rejected by parliament or the Shura Council, it is immediately referred by the Cabinet to His Majesty King Hamad, who can ratify the bill or reject it.
Shaikh Khalid said both bills were in line with the United Nations Commission on International Trade Law principles.
"The new bills will affect operations involving foreign companies and firms, who are now investing in Bahrain or have plans to invest in future," he said.
"We will now follow international arbitration and allow foreign companies to have their own representation, something that will bring confidence to our judicial system of arbitration."
He revealed Bahrain was currently handling arbitration cases worth $14 billion from neighbouring countries through the Bahrain Chamber for Dispute Resolution - American Arbitration Association.
"Arbitrators are in a difficult situation because they have several choices on what law to take from which country, but now with the new dispute law they will be able to choose the most suitable without question from involved parties, protecting the rights of all," he said.
"Let's take the example of a Bahraini purchasing a property in Spain from England through a French broker, what law would be used there?
"Another issue is related to franchises and whether it would be the mother company's country's law or leaseholder's country's law - and the same goes for multinational companies."
A number of Shura Council members criticised the use of the English word "franchise" in the bill and said an Arabic equivalent must be used.
However, Shaikh Khalid and council chairman Ali Al Saleh defended its use, saying that there was no direct Arabic equivalent.
