[See Note¹]

Preliminary Provisions

Article 1

In the application of the provisions of these Rules, the following terms and expressions shall have the meanings assigned to them herein unless the context otherwise requires:

Centre: The Commercial Arbitration Centre for the States of the Co-operation Council for the Arab States of the Gulf.

Rules: Arbitral Rules of Procedure for the Centre.

Secretary General: Centre's Secretary General.

Tribunal: Arbitral Tribunal formed in accordance with the Rules.

Arbitration Agreement: Arbitration Agreement made by the parties in writing for reference to arbitration whether prior to the dispute (arbitration clause) or thereafter (arbitration stipulation).

Panel: List of the names of arbitrators at the Centre.

Article 2

1. An Arbitration Agreement made in accordance with the provisions of these Rules before the Centre shall preclude the reference of the dispute before any other authority or it shall also preclude any chal- lenge to arbitration award passed by the Arbitral Tribunal.

2. In case of reference to arbitration, it is proposed that the following text be included in the Arbitration Agreement:

"If a dispute arises between the two (or more) parties over the interpretation or application of the agreement (contract), the dispute shall be referred to an Arbitral Tribunal in accordance with the rules and procedures provided for in the Charter of the Commercial Arbitration Centre for the States of the Co-operation Council for the Arab States of the Gulf".

Article 3

All agreements and stipulations referred to arbitration before the Centre shall be presumed valid unless evidence is provided establishing the invalidity thereof.

Article 4

Arbitration before the Centre shall take place pursuant to these Rules unless there is a provision to the contrary in the Arbitration Agreement. The parties may select further procedural rules for arbitration before the Centre, provided that such rules shall not affect the powers of the Centre or Arbitral Tribunal provided for in these Rules.

Article 5

The Centre's Tribunal shall ensure all rights of defence for all parties to the dispute and shall treat them on an equal basis. The Tribunal shall ensure each party in the proceedings has the full opportunity to present his case.

Article 6

Arbitration proceedings shall take place in the State of Bahrain unless the parties agree that they shall be conducted in another State, to be approved by the Tribunal upon consultation with the Secretary General. An award shall be rendered at the venue where the Arbitration has taken place.

Article 7

Arbitration shall be conducted in the Arabic language. The Tribunal may decide to hear the statements of the parties, witnesses and experts who do not speak Arabic by seeking the assistance of a sworn interpreter after he takes the oath before the Tribunal. Further, the Tribunal may authorize the presentation of memoranda and statements and submission of pleadings in a foreign language provided that they shall be accompanied by an Arabic translation. In all cases, the award shall be rendered in Arabic.

Arbitral Tribunal

Article 8

The Arbitral Tribunal shall be composed of a single arbitrator or three arbitrators as mutually agreed upon between the parties. In case there is no agreement, the Tribunal shall be formed by three arbitrators.

Submission of Applications and Reference to Arbitration

Article 9

An applicant for arbitration shall submit a written application to the Secretary General containing the following:

I . His name, surname, capacity, nationality and address.

2 . Name of the other party against whom arbitration reference is made, his surname, capacity, nationality and address.

3. Statement of the dispute, its facts. Evidence thereof and specified claims.

4. Name of the elected arbitrator, if any.

5. A copy of the Arbitration Agreement and all the documents relating to the dispute. The Secretary General shall ensure that all the necessary documents are available for pursuing the arbitration proceedings. In case the required documents are not complete, the concerned party shall be given notice to produce them.

Article 10

Upon receipt of the arbitration application and payment of fees, the Secretary General shall notify the applicant, acknowledging receipt of his application, and shall notify the other party against whom arbitration reference is made by registered letter, with a copy thereof within seven days from the date of receiving such application.

Article11

The party against whom reference to arbitration is made shall submit, within twenty days from the date of being notified of the application, a reply memorandum containing his defense pleas, counter claims, if any, and the name of his elected arbitrator supported by the documents available to him. The Secretary General may give him, upon his request, a grace period not exceeding twenty days for this purpose.

Article12

1 . If the Arbitral Tribunal consists of a single arbitrator, the parties shall agree on his appointment

within the period fixed in the preceding Article, otherwise the Secretary General shall appoint an

arbitrator from among the Centre's Arbitrator's Panel within one week from the expiry of such period. The Secretary General shall notify all parties of such appointment within one week from the date thereof.

2 . If the applicant for arbitration fails to nominate the arbitrator he wishes to elect in his application, the Secretary General shall appoint the arbitrator within one week from the date of receiving the application.

3. If the party, against whom arbitration is referred, fails to nominate the arbitrator of his election during the period stipulated in the preceding Article, the Secretary General shall appoint an arbitrator within one week.

4. The Secretary General shall invite the arbitrators nominated by the two parties to elect a third arbitrator who shall be chairman of the Tribunal. However. in case of failure to reach agreement within twenty days from the date of the invitation, the Secretary General shall appoint, within one week, the third arbitrator.

Article 13

If either party disputes the validity of appointing one of the arbitrators, the Secretary General shall settle such dispute within three days by a final decision provided that this dispute on the validity shall be presented before holding the hearing fixed for considering the dispute.

Article 14

If an arbitrator dies, declines appointment, or force majuere prevents him from carrying out his duties or the continuation thereof, a substitute shall be nominated in his stead in the same manner in which the original arbitrator was appointed.

Article 15

The Secretary General shall refer the dispute file to the Tribunal within seven days from the date of forming it in the abovesaid manner. The Tribunal shall proceed with carrying out its mandate within fifteen days from the date of notification thereof.

Challenge of Arbitrators

Article 16

Either party may challenge the appointment of an arbitrator for reason to be set out in his petition.

The challenge shall be submitted to the Secretary General.

Article 17

1 . In case one of the parties seeks to challenge an arbitrator, the other party may agree to such challenge. Further, the arbitrator sought to be challenged may relinquish the hearing of the dispute and a new arbitrator shall be appointed in the same manner in which the said arbitrator was nominated.

2 . If the other party does not agree to the plea for challenging the arbitrator and if the said arbitrator sought to be challenged does not relinquish the hearing of the dispute, the Secretary General shall settle the issue of the challenge within three days from receiving an application in this respect.

3 . If the Secretary General decides to challenge the arbitrator, a new arbitrator shall be appointed in accordance with the Rule. The challenged arbitrator as well as the parties shall be notified of such decision.

Plea for Jurisdiction of the Arbitral Tribunal

Article 18

Unless there is an express agreement to the contrary, an Arbitration Agree- ment shall be deemed as independent from the contract subject to the dispute. If the contract is invalidated or terminated for any reason, the Arbitration Agreement shall remain valid and effective.

Article 19

The Arbitral Tribunal shall have the power to rule on the issue relating to its non-jurisdiction. This shall include the pleas based upon the lack of an Arbitration Agreement, nullity of such Agreement, lapse thereof or its non-applicability to the issue in the dispute. The said pleas shall be pre- sented at the first hearing prior to examining the merits.

Hearings

Article 20

The Tribunal shall hold, at the request of either party, at any stage of the proceedings, hearings for verbal pleadings or for hearing testimony from witnesses or experts. If neither party makes such a

request, the Tribunal shall have the option either to hold such hearings or to go ahead with the proceedings on the basis of the papers and documents, provided that at least one hearing has already been held.

Article 21

1. In case of verbal pleadings, the Tribunal shall notify the parties, within a sufficient period of time

before the pleading's hearing, of the date, time and place of hearing.

2. In case of providing proof by testimony of witnesses, -the party upon whom the onus of proof rests shall notify the Tribunal and the other party, at least seven days before the testimony hearing, of the names of witnesses whom he plans to call to the witness stand, their addresses, the matters in respect of which the said witnesses shall testify and the language to be used for such testimony.

3. The Tribunal shall make the necessary arrangements for translation of a verbal statements made at the hearing if such statements are in a language other than Arabic and the Tribunal shall prepare minutes of the hearing.

4. Pleading and testimony hearings shall be held behind closed doors unless the two parties agree to the contrary and the Tribunal shall be at liberty to decide the method of questioning the witnesses.

5. The Tribunal shall decide whether to accept or reject evidence and the existence of a link between the evidence and the issue of the case or lack of such linkage and the significance of the evidence provided.

Article 22

1. If either party alleged that the documents submitted to the Tribunal have been forged the Tribunal shall temporarily suspend the Arbitral proceedings.

2. The Tribunal shall refer the alleged forgery to the competent committee for investigating it and taking a decision in respect thereof.

3. If the forgery incident is proved to be true, the Tribunal shall pass a ruling for cancellation of documents proved to have been forged.

Article 23

The Tribunal may at any stage of the arbitration request the parties to produce other documents or evidence, conduct an inspection of the premises subject to the dispute, and make investigations it deems fit, including assistance by experts.

Article 24

The parties to the dispute may authorize the Tribunal to settle the dispute between them by means of reconciliation. They may also request the Tribunal at any stage to confirm what has been agreed upon between them by way of a reconciliation or settlement, and it shall pass a ruling to that effect.

Article 25

The Tribunal may, ex-officio or at the request of one of the parties to the dispute, decide at any time, after closing of the pleadings and prior to rendering the award, to open pleadings anew on the merits for material reasons.

Failure to Appear

Article 26

If either party fails to appear at the hearings after receiving notification to appear from the Tribunal, and does not provide, during a period of time being fixed by the Tribunal, an acceptable excuse for his absence, such absence shall not bar proceeding with the arbitration.

Interim Measures

Article 27

The Tribunal may take, at the request of either party interim measures in respect of the subject-matter of the dispute, including the measures for preservation of the contentious goods, such as ordering the deposit of the goods with third parties or sale of the perishable items thereof in compliance with the procedural rules in the country where the interim measure is adopted.

Applicable Law

Article 28

The Tribunal shall settle disputes in accordance with the following:

1. The contract concluded between the two parties as well as any subsequent agreement between them.

2. The law chosen by the parties.

3. The law having most relevance to the issue of the dispute in accord- ance with the rules of the conflict of laws deemed fit by the Tribunal.

4. Local and international business practices.

Article 29

The GCC regulations and resolutions as well as provisions of the Unified Economic Agreement and their interpretations shall be applicable to the disputes arising from the enforcement thereof.

Deliberations and Award

Article 30

If there are several arbitrators and the pleadings have ceased, the Tribunal shall meet for deliberations and passing an award. The deliberations shall be held behind closed doors. However, if there is a single arbitrator on the Tribunal, he shall pass the award after ceasing the pleading.

Article 31

If there are several arbitrators, the award shall be passed by a unanimous or a majority vote. In all cases, an award shall be passed within a maximum period of one hundred days from the date of referring the case file to the Tribunal unless the parties agree on another period for passing the award. The parties convenant with each other to enforce the award with immediate effect. In case an award is passed by a majority vote, the dissenting arbitrator shall note down his opinion in a separate paper to be attached to the award but the dissent shall not be deemed as an integral part thereof.

Article 32

The period referred to in the preceding Article may be extended by a decision made by the Secretary General upon a grounded request from the Tribunal. If the Secretary General is not convinced of the reasons given by the Tribunal for the extension request, the Secretary General shall fix a deadline in consultation with the parties to the dispute and the Tribunal shall pass its ruling within such deadline and its mandate shall be ended upon the expiry of the said deadline.

Article 33

The award shall be grounded and must contain the arbitrators' names, their signatures, names of the parties, date of the award, place of issue, facts of the case, litigants' claims, a summary of their defence pleadings, their defenses, replies thereto and the party who shall incur the costs and legal fees either in full or partially.

Article 34

1. The Tribunal shall send a copy of the award to the Secretary General for the purpose of deposit and registration, if required, under the law of the State in which the award shall be enforced.

2. The Tribunal Secretariat shall send a copy of the award to each of the parties by registered letter with a note of receipt within three days from the date the award is passed.

Article 35

1. An award passed by the Tribunal pursuant to these Rules shall be binding and final. It shall be enforceable in the GCC member States once an order is issued for the enforcement thereof by the relevant judicial authority.

2. The relevant judicial authority shall order the enforcement of the arbitration award unless one of the litigants files an application for the annulment of the award in the following specific events:

(a) If it is passed in the absence of an Arbitration Agreement or in pursuance of a null Agreement, or if it is prescribed by the passage of time or if the arbitrator goes beyond the scope of the Agreement.

(b) If the award is passed by arbitrators who have not been appointed in accordance with the law, or if it is passed by some of them without being authorized to hand down a ruling in the absence of others, or if it is passed pursuant to an Arbitration Agreement in which the issue of the dispute is not specified, or if it is passed by a person who is not legally qualified to issue such award.

Upon the occurrence of any of the events indicated in the above two paragraphs, the relevant judicial authority shall verify the validity of the annulment petition and shall pass a ruling for non-enforcement of the arbitration award.

Article 36

The Tribunal may, ex-officio or at a written request from either party to be submitted through the Secretary General, correct any material and similar errors in the award after giving notice to the other party with respect to such request, provided that the correction request shall be submitted within fifteen days from the date of receiving the award. The correction shall be done and considered as an integral part of the award and notice thereof shall be given to the parties.

Article 37

Either party may request the Tribunal, within seven days from the date of receiving the award, to interpret any ambiguity which may arise therein, provided that the other party shall be given notice of such request. The Tribunal shall provide the interpretation in writing within twenty days from the date of receiving such application. The interpretation shall be deemed as an integral part of the award in all aspects.

Article 38

1. Either party may, upon a written request to be addressed to the Secretary General, request the annulment of the award for any of the following reasons:

(a) If the Tribunal clearly acts beyond the ambit of its powers.

(b) If a new event is proved by virtue of a court judgment so as to have substantial impact upon the award.

(c) If an arbitrator falls under an undue influence that has an effect on the award.

2. The request for annulment shall be submitted within sixty days from the date of receiving the award. However, if the annulment request is based upon the two reasons indicated in Paragraphs (b) and (c), it must be submitted within sixty days from the date of discovering the event. In all cases, an annulment request shall not be entertained after the lapse of one year from the date of passing the award.

3. The Secretary General shall nominate a committee from the Panel consisting of a chairman and two members to examine the request and to decide upon it as soon as possible.

4. A committee member shall not be one of the arbitrators who passed the award nor a compatriot of either party to the dispute.

5. The committee shall decide either to annul the award in whole or in part if any of the reasons referred to in Clause (1) of this Article is fulfilled, or to support the award passed.

Fees and Costs

Article 39

The Centre shall charge a fee of (BD 50) or the equivalent thereof for every reference to arbitration.

Article 40

1. The Centre shall charge fees for the services provided to the parties but such fees shall not, under any circumstances, be more than 2% of the amount in dispute.

2. The Secretary General shall propose a scale of fees for its services pursuant to the preceding Paragraph (1) and such scale of fees shall be effective upon approval by the Board of Directors of the Centre.

Article 41

In consideration of its services, the Centre shall retain from the total fees. payable to the arbitrators, a proportionate return of 3% from the sums paid to them upon conclusion of the cases and assignments undertaken at the Centre.

Article 42

1. The Secretary General shall prepare a statement of temporary estimate of the arbitrators' fees and other arbitration costs such as the travel expenses of the arbitrators and witnesses, fees of experts and translators and fees for the Centre's services. Each of the parties to a dispute shall be instructed to deposit a certain equal amount as an advance on account of such costs. The parties may be instructed to make supplementary deposits in the course of arbitration proceedings.

2. If the required deposits are not made within thirty days from the date of receiving the instructions, the Secretary General shall notify the parties in this respect so that one of them shall pay the required amounts. In case the amount is not paid, the Tribunal may order the suspension or termination of the arbitration proceedings.

3. Once the Tribunal's award is passed, the Secretary General shall submit a statement of the deposits and expenses and make a final settlement by refunding any surplus amount or collecting the amounts outstanding.

Final Provisions

Article 43

The GCC Commercial Co-operation Committee shall have the right to amend these Rules and the Board of Directors of the Centre shall have the right to interpret them.

Article 44

These Rules shall come into effect immediately upon their ratification by the GCC Commercial Co-operation Committee.

Annex No. 1

Rules Regulating the Costs of Arbitration² 

In accordance with articles (7) and (23) of the Charter of the Centre (the Charter) and Article (42) paragraph (1) of the Arbitral Rules of Procedure (The Rules), the Board of Directors of the Centre has approved the Annex (1) pertaining to the Rules Regulating the Costs of Arbitration at the Centre as follows: -

Article (1)

Administration Fees

1. The Center shall charge non-refundable fee of BD 50.000 (Fifty Bahraini Dinars) for every reference to arbitration (Article (39) of the Rules).

2. The Center shall charge non-refundable fees for the services provided to the parties on condition that such fees shall not exceed 2% of the amount in dispute (Article (40), paragraph (1) of the Rules).

3. The administrative charges are determined as a percentage of the amounts in dispute as illustrated by the Scale of the Administrative Fees below. These charges which applied to each succession slice of the amount in dispute are to be added together. If the amount in dispute exceed five millions Bahraini Dinars, the administrative fees will be fixed at the sum of BD. 15,000.000 (Fifteen Thousand Bahraini Dinars).

4. The Board of Directors may amend this Scale from time to time upon proposition by the Secretary General.

Administrative Fees

All above amounts are in Bahraini Dinars

Article (2)

Arbitrators' Remunerations

1. Remunerations for arbitrators are determined as a percentage of the amounts in dispute.

These remunerations will be assessed according to the conditions and circumstances of each case within the maximum and minimum range of the Scale of the Arbitrator Remuneration illustrated below.

2. The Secretary General, based on the Scale of Remuneration, shall determine the arbitrators remunerations. He may, on the exceptional basis, determine the remuneration by exceeding beyond the range of the Scale if he found that the volume and the circumstance of the disputed case so justified, as the arbitration proceedings, for instance, are extended or the issue in the dispute is so subdivided that it would reach beyond the will of the Arbitral Tribunal, and by reducing the remuneration if the parties reached to a friendly settlement of the dispute outside or within the framework of the Arbitral Tribunal during the process of arbitration.

3. The Center shall retain a proportionate return of 3% from the total fees paid to the Arbitrators upon conclusion of their assignment in consideration of services undertaken by the Center. (Article (41) of the Rules).

Arbitrators' Remunerations

All above amounts are in Bahraini Dinars.

Article (3)

Fees of Additional Assistance

1. In case of authorizing the Center to appoint arbitrators according to the Rules, the Centre's Secretary General shall undertake such task in accordance with the provisions of the said Rules (Articles (21) (A) of the Charter.

2. If the two parties mutually agree on settling their dispute by arbitration but not through the Center, the Centre's Secretary General may, upon a written application from the parties, provide or arrange the necessary facilities and assistance for the arbitration proceedings requested by the parties.

The necessary facilities and assistance may include providing an appropriate place for holding the Arbitral Tribunal and assisting with secretarial duties, translation and filing documents and relevant papers (Article (22) of the Charter).

3. The Center charges the sum of BD 100.000 (One Hundred Bahraini Dinars) as fee for each application submitted to it for appointing an arbitrator to carry out arbitration not being subject to the Charter or the Rules of Procedure of the Center. The Center shall not approve any application for appointing an arbitrator unless it is submitted with the aforementioned non-refundable sum.

4. The Center charges the sum of BD50.000 (Fifty Bahraini Dinars) for providing any party with the lists of Arbitrators/Experts on the Panel at the Center.

5. The Center charges the sum of BD 50.000 (Fifty Bahraini Dinars) as the costs of using its particular places for meetings (without secretarial services) for a period of half day from 8:00 to 12:00 or 15:30 to 19:30.

6. Fees and costs of secretarial services, translation…etc. shall be determined by the Secretary General, taking into consideration the type and volume of the secretarial services, translation etc.

Article (4)

General Provisions

1. The term "Arbitration Fees" used in this annex means fees of the Center, administrative fees, arbitrator's remunerations, costs of travel and residence of arbitrators and witnesses, remunerations of experts and interpreters and other costs.

2. The Secretary General shall provisionally determine the administrative fee and estimate other fees for arbitration. He also determine the amount to be paid in advance by the parties to the dispute before the commencement of arbitration proceeding (Article (23), paragraph (A) of the Charter and Article (42), paragraph (1) of the Rules).

3. The Secretary General requests the two parties to the dispute to pay the determined deposit equally between them. If any of them fails to pay his portion of deposit within the limited period, the Secretary General shall notify other party to pay the deposit. If he refuses to pay, the arbitration proceedings may be suspended or terminated (Article (23), paragraph (A) of the Charter and Article (42), paragraph (2) of the Rules).

4. The Secretary General may, in any time during the processing of arbitration, request the parties to a dispute to deposit supplementary amounts on account of arbitration costs estimated provisionally according to item (2) of this Article. (Article (23), paragraph (A) of the Charter and Article (42), paragraph (1) of the Rules). Equal payment between the parties to a dispute shall be approved for all amounts determined by the Secretary General. If any of the parties fails to pay, the Secretary General shall notify other parties to pay the portion of the failed party. If they refuse to pay the Secretary General or the Tribunal may suspend the arbitration proceedings or terminate them.

5. The deposits determined by the Secretary General must be made within thirty days from the date of receiving the instruction to pay. (Article (23), paragraph (B) of the Charter and Article (42), paragraph (2) of the Rules).

6. Counter requests shall be treated independently as an original request and their fees are charged depending on the two above mentioned Scales; the Administrative Fees and the Arbitrators' Remuneration. The Secretary General shall determine an additional deposit to be paid by the party who had admitted the requests, without prejudice to the principle of paying these deposits equally.

7. If the amount of the dispute is not determined, the Secretary General of the Center shall determine the Administrative Fees and the Arbitrators' Remunerations depending on the volume and the nature of the disputed case, provided that the Administrative Fees should not exceed the maximum limit mentioned in the Administrative Fees Scale.

8. All the amounts collected on the account of the arbitration costs and expenses shall be deposited in the Centre's safe according to its financial rules. These amounts are kept there until the award is passed by the arbitrators.

9. The Arbitration Tribunal shall determine the party who shall undertake, partially or wholly, the costs and remunerations.

10. Following the issuance of an award by the Arbitral Tribunal in respect of the dispute, the Secretary General shall deliver to the parties to the dispute a statement of the deposits made and expenses incurred with a view to making final settlement by refunding the surplus amount of the deposited sums or collecting the balance remaining for the costs pursuant to the provisions of the Rules (Article (23), paragraph ( C ) of the Charter).

Article 5

Final Provisions

The Rules Regulating the Costs of Arbitration shall come into effect upon ratification by the Board of Directors of the GCC Commercial Arbitration Center.

Note :

The Rules Regulating the Costs of Arbitration was ratified by the Board of Directors of the Center on 27-09-1995.