Proposal to Lower Business Dispute Threshold Set for Parliament Review

TDT | Manama

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Parliament is set to discuss a bill on Tuesday that would lower the minimum claim value handled by the Bahrain Chamber for Dispute Resolution (BCDR) from 500,000 to 100,000 dinars, adjusting the Chamber’s monetary jurisdiction and potentially offering companies a faster route to settle commercial disputes. Proponents believe the change could ease pressure on the courts and bolster Bahrain’s appeal as a business-friendly hub by providing businesses with quicker, more accessible resolutions.

The proposal, led by MP Dr Ali Majid Al Nuaimi, seeks to remove barriers that currently limit access to the Chamber, opening its services to a wider range of commercial claims. By revising the jurisdictional threshold, the bill is intended to create a more accessible route for firms to resolve financial and business conflicts, thus adding another layer to Bahrain’s appeal as a place for investment.

The BCDR, however, has voiced reservations. They argue that the bill’s goal of speeding up case resolutions may already be met through current procedures. The BCDR operates on similar timelines to the courts, with both allowing for an initial two-month period to manage cases, which can be extended by two months as required.

The Chamber also stresses the need to balance its financial health against the costs of its services. Fees generated from cases above 500,000 dinars form a critical part of its revenue. Lowering the threshold could cut these earnings by 20 to 80 per cent per case, depending on the claim value, and reduce the funds available for maintaining services. This income is essential for covering the costs of both mandatory and optional services, such as mediation and arbitration, and for allowing the Chamber to invest in future projects.

As more cases are likely to fall under the Chamber’s remit if the bill passes, the institution foresees a risk of overstretching its resources, which may strain its ability to sustain service quality at current levels. Financial strain could hinder the BCDR’s ambitions to fund new initiatives and to preserve its standing on the regional and international stage.

Despite these concerns, the Legislative and Legal Affairs Committee has recommended the proposal, urging its approval in the upcoming session. The committee sees this as a practical move towards making dispute resolution faster and easier for Bahrain’s business sector.

This proposal aligns with Bahrain’s ambition to refine its legal and economic systems in ways that encourage investment and development. Should it pass, the bill will alter the process for managing economic disputes, aiming to reduce time in legal proceedings and improve judicial services within the Kingdom. By expanding the Chamber’s jurisdiction to cover claims over 100,000 dinars, the legislation has the potential to make Bahrain an even more attractive location for businesses, while the Chamber faces the challenge of sustaining financial stability under the new arrangement.