CBB establishes special tribunals for speedy settlement of disputes

A Dispute Resolution Committee (DRC) has been established for the exclusive purpose of settling disputes among financial institutions (CBB licensees), while a second DRC is mandated to settle disputes arising from trust business.

The two DRCs offer Bahrain's financial services community an alternate and more expeditious means to settle disputes relevant to the mandates of the two tribunals. Previously, litigation was the main recourse for settling disputes arising among financial institutions.

By virtue of their composition, the tribunals will also bring into the process expert knowledge of finance and financial issues, complemented by judicial expertise.

The decisions of the DRCs will be binding on the parties involved in the dispute. However, the decisions can be appealed in the Court of Cassation. The general secretariat for both tribunals is the CBB Legal Counsel.

"The establishment of the special tribunals is a significant move aimed at enhancing the support infrastructure for Bahrain's financial services industry," said Mr. Khalid Hamad, Executive Director, Banking Supervision, at the CBB, who is a member of the DRC for settling disputes among CBB licensees.

"By expanding the available tools for resolving disputes, the CBB hopes to further improve the overall infrastructure enabling financial services providers based in Bahrain to focus on their core businesses."

The DRC for settling disputes among CBB licensees was established in March 2007 under the provisions of Article 176 of the CBB Law, issued in September 2006. This DRC comprises five members, of whom three are judges of the High Court of Appeals. The judges, delegated by the High Judiciary Council, are Mr. Abdulla Yacoub Abdulrahman, who is Chairman of the Committee, Mr. Adnan Abdulla Al Shaikh Hazeem Al Shamsi and Mr. Hassan Mohammed Farahat Safar.

The other two members, nominated by the Governor of the CBB, are Mr. Khalid Hamad and Mr. Salman Abbasi, a well-respected banker, who was formerly a member of the management committee of Investcorp.

The DRC for trust disputes, established in December 2006, comprises two judges of the High Court of Appeals, who are Mr. Abdulla Yacoub Abdulrahman (Chairman) and Mr. Adnan Abdulla Al Shaikh Hazeem Al Shamsi, as well as one respected banker, who is Mr. Adnan Yousif, Chief Executive Officer of AlBaraka Banking Group (ABG).

The establishment of the DRC for trust business is in line with the CBB's efforts to create a well-regulated environment and provide the support infrastructure for trust business, a mode of wealth preservation.

The move follows the enactment, in August 2006, of Bahrain's first-ever Trust Law, which provides a firm legal foundation for trust business.