Law: Every society has its own established rules to govern the conduct of its members. These rules
can sometimes be established informally through many years of customs and traditions or they can
be formally instituted with procedures in place and precedents. In either case, those rules determine
the standard of acceptable conduct in society and what is acceptable or unacceptable behaviour based
on those standards.
Bahrain legal system:
History: Bahrain gained full independence from Britain in 1971, adopted a constitution in 1973, and
substantially revised it in 2002.
Constitutional status: Constitution adopted on the 26th May, 1973:
•
Article 1(a): “Bahrain is an Arab Islamic State”.
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Article 2: Affirms Islam as official religion and identifies the Shari’a as a main source of
Legislation.
Classifications of law: Although Bahrain has had an established system of law courts since 1771,
it was only in the course of the twentieth century that it gradually developed a legal system
compatible with international norms. Today, it has a judicial system which represents a blend of
Islamic Sharia law, and modern reforms drawn from the Egyptian civil law (influenced by the
French Law), and the international laws.
There are three classifications of law:

Public law: Governs the relationship between the State Vs individual. Public law deals more
with issues that affect the general public or the state itself. Examples: criminal law where it is
the duty of the state to protect its society from the criminal.

Private law: Governs the relationship between individuals Vs individual, or citizens Vs
company. It is a private matter and only affects the people involved and not the public
generally. Examples: Breach of contract or causing injury to someone through carelessness.

Sharia law: Mainly governs personal affairs of Muslims. The direct influence of Sharia law is
primarily confined to social laws, such as family law, divorce or succession. There are elements
of Sharia law that govern some commercial transactions although they are predominantly
dealt with in a civil court. Examples: Divorce, child custody and inheritance.
Types of Liabilities: ‘Liability’ means Legal responsibility for acts committed that cause loss, harm or
damage to another person. For example, if a doctor gives her patient careless advice that causes this
patient to be seriously ill, the doctor is liable to pay compensation for the illness she caused. If you
take a bank loan, you are liable to make repayments plus any penalty for lateness.

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Civil Liability: usually arises where a person has caused injury, damage to property or financial
loss through their carelessness or by breach of contract (i.e. breaking the terms of the
contract). Examples: Restaurant causes customers food poisoning, company sells faulty
product that causes injury, an employee does not perform his contractual obligations.
Punishment for Civil Liability: As there was no intention to cause harm to the other person,
the punishment is mainly to pay compensation only.

Criminal Liability: arises where a person intentionally and deliberately commits an act that
causes damage or injury to another person. Examples: intentionally poisoning another
person’s food to cause harm, committing bribery, intentionally committing fraud, deliberately
damaging someone’s property. As there is an intention to cause damage or harm, the
punishment in this case will mainly be imprisonment
Common law and civil law:
Common law:




Custom and practice
Judge-made law
Flexible
Precedent
Civil law:




Through legislation and codes
The judge just applies the law (passive role)
Less flexible
Judical (previous cases) are not binding
Common law is more flexible, judge makes the law, recognizes the national law but does not go by it.
Civil law respects the legislation, the judge just applies it. Bahrain is a civil law country.
Bahrain has a secular court system (not related to spiritual matters). This is the default while the sharia
law is the basis.
Litigation: The process of taking legal action
Levels of litigation:
1.First instance
2.Appeals
3.Cassation
The Cassation Court's judgment is final and binding, and it renders its decision on questions of
law. The questions of fact are restricted to the first instance and appeals court.
The Cobra Effect: When a proposed solution to a problem ends up making it worse.
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Creation of a new law:
Set by the Constitution, HM The King is the Protector of the Legality of the Government and the
Supremacy of Law. HM The King can propose constitutional amendments and initiate laws. Only HM
The King can ratify and promulgate the laws. Before it becomes a law the draft law proposed is called
a “bill” The bill must go through both chambers: Parliament and Shura Council (Advisory Council). The
Prime Minister (government) will submit draft laws to Parliament.
Contract Formation
Claimant is the person who wishes to take you to court- (also called Plaintiff)
Defendant is the person to whom the action is against
Offeror is the person who makes the offer
Offeree is the person to whom the offer is made
Contract: an agreement- made up of a proposal [Offer ] which is then accepted [Acceptance] with the
parties intending to have it enforced if necessary in a court of law [Create a legally binding contract]
Art. 29 (Civil Code)
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Requirements for a valid contract:
1- Offer
2- Acceptance
3- Consideration
4- Intention
5- Capacity
Other factors to be taken into account when forming contracts:
Certainty
Legally permissible: Not forbidden by law or by public order or morality.
Entered into freely/ consent/Not Under Duress
Fraudulent misrepresentations
Offer
Offer: A firm, clear and full statement of terms indicating intention to be bound on acceptance by
another party to whom the offer has been communicated.
An offer becomes effective when it reaches the offeree. The offeree must know the offer; he must be
able to accept it/to perform the terms of the offer. This is for the exception of rewards as “a person
who makes a promise to the public of a reward in exchange for a specific act shall pay the reward to
the person who performs such act according to the published condition, even if he acted without
thought of the promise of reward, or without knowledge thereof.” Art. 152 (CC)
According to the civil code an offer is A proposal is an offer made by a person to another person of
his intention to conclude a certain contract merely by acceptance of the person to whom it is
offered. Art. 37 (CC)
It shall include at least the nature of the contract required to be concluded and its fundamental
conditions. Art. 37 (CC)
Nature of the contract: subject matter, area under discussion, etc.
Fundamental Conditions: primary/essential terms
An offer must be distinguished from what is known as an invitation to treat. An invitation to treat has
no legal effect.
Examples of an invitation to treat include:
- mass distribution of a catalogue, company websites , Instagram-shopping online
- brochures
- general advertisements
- display of goods on shop windows or shelves.
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An advertisement is usually an invitation to treat but can be an offer, depending on its wording and
on the circumstances. Look what happened to Carbolic Smoke Ball company. If you word the
advertisement in such a way that it only requires the reader to accept, all terms and conditions are in
the wording then it’s an offer. For Example, If the advertiser indicated that he was willing to sell only
to the first person accepting, it would then be an offer.
Withdrawal of the offer; You can withdraw your offer as long as the other party has not accepted it
yet. Unless you stated in your offer that it was open till 10pm or in 3weeks time then you have to wait
for the time limit to expire. Art. 38,39 (CC) Any alleged acceptance after withdrawal is ineffective.
Acceptance
Acceptance: An expression of intention to be bound by the offeror’s terms. (Art.41 (a) CC)
The second essential feature of a contract is that the offer be accepted and, in most cases, that this
acceptance is communicated to the offeror. It must be absolute and without any impediments [no
variation of terms in terms of quantity , quality or price]. In essence a mirror image. Art. 41-43 CC
Acceptance must:
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Correspond precisely with the terms of the offer. The offeree must not attempt to vary its
terms (Mirror image). Art. 41 (b) & Art 50 (CC)
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Must be entered into freely. Art 41(a) (CC)
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Be unconditional Art. Art.41(c) (CC) (no material changes) if conditional on a material term i.e.
price this is then is a rejection of original offer and this rejection become a new offer.
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Be Communicated. Acceptance cannot be silent; a nod is not seen as silence. Art 42 (CC)
The offeror may specify a particular method of acceptance, in writing, by email, by phone and if so
this must be complied with. However, the offeror cannot state that an offeree has accepted if he does
not hear anything- silence is not an acceptance.
Contract of Auction: A contract by public auction is only concluded when the final bid is accepted. A
bid is nullified from the moment a higher bid is made, even if the higher bid is void. Art. 55 (CC) The
final bid forms acceptance. The striking of the hammer. Physically being present in same room /space
not required.
Counter offer: A counter-offer is not an acceptance, and actually kills the original offer. Art 41 (c) CC
41(c): An acceptance that goes beyond the offer, or that is accompanied by a restriction or a
modification, is deemed to be a rejection comprising a new offer.
Consequences of the counter offer:
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•
The counter offer destroys the initial offer.
•
The offeree becomes the offeror (and vice versa).
•
The offeror who becomes the offeree has a new role: to accept or to refuse the counter-offer.
A counter offer must materially alter the terms of the offer, examples of terms which may
materially alter the offer:
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a) Price.
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b) Payment.
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c) Quality of the goods.
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d) Place or time of delivery.
Rewards
A person who makes a promise to the public of a reward in exchange for a specific act shall pay the
reward to the person who performs such act according to the published conditions, even if he acted
without thought of the promise of reward, or without knowledge thereof. Art. 152 CC
Posters which advertise rewards, missing cat etc...’ are offers and in these cases, acceptance is by
conduct and performance of the terms.
The position of rewards according to the Civil Code is contrary to the common law principle which
requires knowledge of the reward (i.e. Offer) before acting up on it. Under the common law, lack of
knowledge of the reward makes the agreement non-existent.
Consideration
Consideration: Some right, interest, profit or benefit accruing to one party, or some forbearance,
detriment, loss or responsibility given, suffered or undertaken by the other".
Consideration must be of some value. Art. 111 & 112 CC. This means that you need something
tangible, not enough if you promise to do something and my benefit is that it makes me happy or stop
driving me crazy!
Article 111 (b) CC: An obligation is deemed to have lawful consideration by the motive that urges a
contracting party to conclude a contract if the other contracting party was aware of such motive, or
should have been aware thereof.
Intention
Intention: to be legally bound. The courts will not enforce any contract unless it is clear that the parties
intended to be legally bound by their agreement. Art. (32-36) CC
So promises made as a joke or a friendly measure are not legally binding.
Capacity:
Capacity: The people involved in the contract must have the Legal capacity to conclude a contract.
Art. 72 CC: “Every person who has not been declared to be under total or partial legal incapacity has
the legal capacity to conclude a contract.”
There are 3 types of Capacity with respect to Age:-
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People with NO capacity 0-under 7
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People with partial/discretionary capacity 7-under 21( Known as Minors)
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People with full capacity over 21
Age - Art 73(b) CC: “every person under seven years shall be deemed as lacking discretion.” their acts
in law are deemed to be void (i.e. no legal effect), under Art. 73 (a) CC.
Insane or Deranged :- No right to enter into a legally binding contract. Their contracts are Null and
Void, never existed. Art. 78 CC
Imbecile or Congenital :- People who have a right to enter into a legally binding contract, despite their
learning difficulties due to certain hereditary/ genetic issues I.e. Down syndrome. But the law protects
them like minors. Art. 79 CC
Termination of a Contract, Breach and Remedies.
Mutual Agreement
Typically refers to the ending of a contract, usually before the natural end of the anticipated term of
the contract, which may be by mutual agreement. Art. 148 (a) CC
Performance
A contract can be terminated where both parties have fully performed their contractual obligations.
Article 214 CC:
(a) Subject always to any provision of the law or agreement to the contrary in the case of an obligation
to do something, a debtor who is required to preserve a thing, to manage it or to act with prudence
in the performance of his obligation, satisfies his obligation, if he brings to the performance thereof
the care of a reasonable person, even if the object in view is not achieved.
Do your job to the standard – required. Shoddy work done is not performance of the contract. If
performance is perhaps not achieved but done in all the circumstances as well as it could be done,
then performance is achieved
Non-Performance
A contract may come to an end where there exists a change in circumstances, after the contract was
made, which is not the fault of either of the parties, which renders the contract either impossible to
perform or deprives the contract of its commercial purpose. Art. 145 (a) CC
A Force Majeure clause (French for "superior force"): A clause within a contract that allows a party to
suspend or terminate the performance of its obligations when certain circumstances beyond their
control arise, making performance inadvisable, commercially impracticable, illegal, or impossible.
Art.54 CC: If the impossibility to perform the obligations resulting from the contract is due to a force
majeure, earnest money shall be returned to the payer.
The Force Majeure clause could state that the contract is temporarily suspended, or that it is
terminated if the event of force majeure continues for a prescribed period of time.
Art 218 CC: The debtor may by agreement accept liability for unforeseen events and even Force
majeure.
That means in a contract you can have a clause that states exactly what risks are involved
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Typical types of Force Majeure:
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Acts of God: Fire, flood, Hurricanes, etc.
Government/ State made: War, Shutdown of ports and embargoes
Man-made: Explosions, strikes, slowdown and civil unrest
Breach
1. Anticipatory Breach: Occurs when one party announces, in advance of the due date for
performance, that he intends not to fulfill his side of the bargain (this could also be by actions
which would lead a reasonable person to believe they do not intend to perform their
obligations). enables the innocent party to accept this kind of breach about to happen and sue
for damages immediately or wait until the performance of obligation is due, the sue for
damages.
2. Actual Breach: An actual breach occurs when one person refuses to fulfill his or her side of
the bargain on the due date or performs incompletely. Art. 140 CC
Remedies
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•
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Damages (money): The purpose of damages is to compensate the injured party for the loss or
damage arising from the breach. It should therefore put the injured party in a position that
they would have been in if the breach had not taken place.
Rescission- Impossibility of performance: A contract may be terminated where there exists a
change in circumstances, after the contract was made, which is not the fault of either of the
parties, which renders the contract either impossible to perform or deprives the contract of
its commercial purpose. Art. 145 CC. The contract is rescinded.
Specific Performance: This is an order by the court requiring one party to perform their
contractual obligation. Compensation in lieu of performance. Art 206, 2016 CC.
International contracts
It is no longer possible for a country (Bahrain or elsewhere) to isolate itself from the international
circulation of goods and persons. The development of the market economy, the growth of markets
for manufactured goods and the opening up of new markets has led to a boom in overseas trade.
Newer and faster methods of communication. The need of universal rules and standards in order to
assess cases surrounding international contracts.
Governing law clause
A commercial contract is a legal relationship. This raises the immediate question: a relationship under
which laws? Different countries have different laws and the content and effect of those laws can vary
greatly. Therefore, in a contract particularly an International contract state clearly the Governing
clause
Governing clause: Specifies which rules and laws will apply in the event of a legal dispute.
Examples of governing law clause:


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“This Agreement shall be governed by and construed in accordance with the laws of the State
of California.”
“THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.”
Jurisdiction clause
Jurisdiction clause: Refers to the court or court system where your case will be heard. represents the
parties' decision to resolve their disputes in a particular court. Place/country.
Examples of jurisdiction clause:

"The parties submit all their disputes arising out of or in connection with this Agreement to
the exclusive jurisdiction of the Courts of Kuwait".
 “Any dispute, controversy or claim arising out of or relating to this contract, in particular its
conclusion, interpretation, performance, breach or validity shall be finally settled by the
courts of Oman which will have exclusive jurisdiction.”
Example of governing and jurisdiction clause:
“13.3 The laws of the Kingdom of Bahrain apply to this Agreement. Both parties shall submit to the
jurisdiction of the Bahrain courts of law.”
United Nations Convention on Contracts for International Sale of Goods- CISG
The CISG was signed in Vienna in 1980 and became effective on January 1st 1988. The aim of the CISG
is the creation of a uniform body of international commercial sales law. CISG Applies to Contracts for
the International Sale of Goods.
Major Obligations of the parties in the CISG
Namely the Seller and Buyer involved in a contract to import and export goods from overseas. The
courts look at the terms of the actual contract first. Do the parties wish to be governed by CISG, etc.
Have they made any exclusions [opted out]. If any of the terms of contract are silent in some details
or missing altogether, then CISG could be activated.
THE SELLER
THE BUYER
Delivery of goods.
Taking delivery of the goods.
Quality & Conformity of goods.
Making payments.
If any or some of the above is not within the terms of contract or if silent in contract, then CISG
could be activated and the Seller could be in breach of contract.
Obligations (duties) under CISG- THE SELLER:
According to Art. 30 CISG, the seller is under an obligation to:
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Deliver goods
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Hand over the documents (e.g. certificates of origin, quality, transport documents, documents
required for customs clearance), and
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Transfer property in the goods.
Conformity of the goods: The seller must deliver goods which are of the quantity, quality and
description required by the contract and which are contained or packaged in the manner required by
the contract (Art. 35).
Art 35 (2):
1. The Seller is not obliged under this article to sell goods which conform to all statutory or other Public
codes in force in Buyers state i.e. health and safety regulations unless:
-The Seller actually knew of the prohibitions by Buyer’s state,
-The Buyer told Seller of these provisions and the relied on Seller’s expert knowledge,
-The same provisions apply to Seller’s state.
The Seller must have Good Title to good: The seller must deliver goods that are free from any right
or claim of a third party, including rights based on industrial property or other intellectual property
(Art. 41). Stolen property does not carry good title, if you buy stolen property whether knowingly or
not, the rightful owner can come and take it off you. You are out of pocket.
Taking Delivery: Take delivery of the goods as required by the contract and the Convention (art. 53,
art. 60); Examine the goods once the goods have been delivered (art. 38); Notify the seller in the event
of non-conformity of goods (art. 39).
Free Trade Agreement (FTA)
Free Trade Agreement (FTA): An agreement between two or more countries where the countries
agree on certain obligations that affect trade in goods and services, and protections for investors and
intellectual property rights, among other topics
This agreement ensures the elimination of trade restrictions in the form of tariffs and quotas and other
regulations of commerce regarding trade between the countries. The objective of the FTA is to allow
countries to use their comparative advantage and produce goods that help increase efficiency and
profitability for each country. The FTA creates export opportunities for both countries by creating jobs
and expanding into the foreign market.
Advantages of FTA:

Low prices since there are no tariffs (import price). Moreover, firms will have low production
costs by importing cheap raw materials tax-free.

Building trust; hence, reducing the risk of conflicts.

Attracting foreign direct investment, bringing capital into Bahrain. This aids in improving
domestic businesses, as it will create employment opportunities that will help in refining the
local economy.
Disadvantages of FTA:
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
FTA eliminates trade restriction, which means no tariffs or quotas. This reduces the tax
revenue of the government.

Foreign competition could cause local firms to go out of business
Incoterms
Factors to consider when buying or selling goods internationally:




Who pays for the shipping?
Who pays for the packaging?
Where will the goods be delivered?
Who takes responsibility to ensure the goods arrive safely?
International commercial terms (Incoterms): should be clearly stated in every commercial invoice,
these terms summarize the tasks, responsibilities, risks and shipping costs relating to an international
shipment, these define what the sender and receiver agreed upon before shipping. This prevents any
misunderstandings regarding shipping costs. Incoterms can vary through the buyer and seller sharing
varied risks depending on the agreement which points out who is responsible for what.
Incoterms were developed by the International Chamber of Commerce (ICC) and are widely used in
international commercial transactions. They are Accepted worldwide. The latest updated version is
Incoterms 2020 although the 2010 version is still valid.
Benefits of incoterms:

The main advantage of Incoterms is they provide a set and standardized terminology used by
all companies doing international business.

Specific terms or acronyms provide both sellers and buyers with clear rules, helping to avoid
confusion about each party's responsibilities and cost management
There are different rules to determine responsibility during the trade process. Most common rules are
CIF (Cost, Insurance and Freight) and FOB (Free on Board).
CIF (Cost, Insurance and Freight): When CIF is used, the seller has responsibility for the cost of the
goods in transit, providing minimum insurance and paying freight charges to move the goods to a
destination chosen by the buyer. From the point of delivery at the destination, the buyer assumes
responsibility for unloading charges and any further shipping costs to a final destination.
Benefits to Seller
Benefits to Buyer
Seller can charge a higher price taking into
account the extra services he provides (i.e.
obtaining shipping space and insurance)
Buyer does not have to undertake the task of finding
shipping space or insurance
(although buyer pay more for the seller
to take on this responsibility)
Seller usually gets paid for the goods before
If the buyer is new to international trade and is
the arrival at destination (payment often takes inexperienced, hey do not have the stress of
place when the documents (e.g. invoice,
arranging the transportation of the products.
insurance policy) are tendered to the buyer)
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Free On Board: Under FOB the seller has less responsibility. The seller will put the good on the ship
and will be free from any other obligations. The Buyer will take the responsibility for the other aspects
of delivery (carriage, insurance, cost)
Benefits to Seller
Benefits to Buyer
Seller does not have the responsibility to organize Buyers can save money as they can obtain very
the transport process.
competitive shipping rates
If the seller is new, FOB is the better option as the Buyer is in control of the process, but this will only
buyer takes on most of the responsibilities.
be suitable for a buyer
experienced in
international trade.
Tort Law
Tort: Latin from the word ‘Tortum’ meaning ‘to twist’. Conduct which is not straight or lawful, but
twisted, or unlawful. French meaning: ‘harm’ The English equivalent to ‘wrong’. It is about
responsibility within Law, it deals with injuries, loss and obligations.
There are different types of Torts/ wrongs for which a person can claim compensation examples are :
◦
Negligence: when a person through carelessness causes damage to another.
◦
Defamation: is a tort which concerns a person’s reputation.
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Trespass to the person/land
◦
Nuisance, neighbors playing loud music till early hours of the morning.
The primary aim under the law of torts is to:
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To claim compensation for the victim
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To deter not only the wrong doer [Tortfeasor] but others in their position from doing this
wrong
◦
To punish the wrong doer (In some legal systems)
Negligence is the area of Tort law which protects personal security, economic interests and property
E.g.: Medical negligence; Careless driving; Employers not providing safe environment for work; ill
equipped or badly trained staff; Bringing dangerous things on to land, animals, weapons, buildings,
machines.
Art. 158: Every fault that has caused damage to others makes an obligation upon the person who
committed it to pay compensation
The word fault means responsibility, liability, burden, error, slip up mistake, blunder. This concept of
fault is logical as the person who is at fault- caused the damage/injury and so they should pay
compensation. This person is liable because he/she failed to match up the standard that is required,
or he/she failed to do something he/she had a duty to provide.
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Tort Law and Contract Law: Both areas of law are often referred to as the “Law of Obligations” –
duties. Both areas of law compensate victims of harm done to them. Both areas are ultimately based
on duties owed by parties to each other. However, the parties impose the duties on themselves in a
consensual way through the contract. It affects only the parties to the contract. In the law of tort, the
specific duties are imposed by the law, and they apply to everyone likely to be affected by the tort.
NO need to have a contract.
Elements to prove the tort of negligence:
1. Duty of Care; To Establish The existence of duty of care 3 elements should be considered
 Reasonably foreseeable. Take reasonable care to avoid actions which one could
reasonably envisage occurring and causing harm. Was it reasonably foreseeable that
the defendant’s carelessness would cause injury?
 Legal proximity. The harm caused must be to someone who one should reasonably
be aware could be injured if one acts or fails to act. Relationship of the parties/
closeness in distance and time. Legal proximity is not necessarily based on physical
closeness. It can mean various types of relationships. There must be a close
relationship between the acts of the defendant and the claimant at the time of the
wrong-doing. Is there proximity between the defendant and the injured person?
 Fair, just and reasonable to impose duty. Is it fair, just and reasonable to impose this
duty of care on person[s] who are in a similar position as this defendant. Is it fair, just
and reasonable impose this duty on the defendant?
2. Breach of the duty of care: which is done through The “reasonable man” concept. In order
to prove this, it is essential that there be some mechanism to decide the standard of behavior
which can be expected of the defendant. That mechanism is known as comparing the
defendant’s behavior with that of“the reasonable man” This concept is believed to be a
person who is guided by deliberate thought which control everyday conduct of day to day
living. S/he will do or omit to do only those things which a sensible and rational person would
do or not do. The following guidelines are the ones taken into consideration while judging
Breach of duty: The degree of Risk involved- how likely is it that injury will occur?
 The seriousness of harm- Can a person die; break am arm or just a few scratches?
 The practicality of taking precautions – Is this going to be very costly and the risk low –
proportionality?
 The social importance of risky activity- Is there an emergency of life and death to the public at
large.
To answer these questions, you need to read the facts of each case on an individual basis.
The reasonable man concept helps us reach a decision which carefully balances all the facts, and those
that can be anticipated. in this way we can identify the risks and assess whether the defendant has
satisfied this duty of care obligation. Or has failed this duty of care obligation.
3. Damages suffered by the Claimant; Once the claimant has shown the existence of a duty of
care and proved it has been breached by falling below the appropriate standard [reasonable
man], then we need to consider 2 main questions.
 Did the breach cause the damage (causation)?
 Was this specific damage foreseeable (foreseeability)?
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Tort: Vicarious Liability
Vicarious Liability: imposes responsibility on one person for a tortious act committed by another.
Vicarious liability is a form of strict liability imposed on a master (employer) in respect of torts
committed by his servant(employee).
Article 172 CC
(a) A master is liable towards an injured person for the damage caused by an unlawful act of his
servant when the act was performed by the servant in the course, or as a result, of his employment.
(b) The relationship between master and servant exists even when the master has not been free to
choose his servant, provided he has actual powers of supervision and control over his servant.
Consideration of Vicarious Liability in the workplace: Is there liability? Ask three questions:
•
Was a tort committed? (Employers will not be liable for a criminal act committed by
the employee)
•
Was the Tortfeasor an employee?
•
Was the employee acting in the course of employment when the tort was
committed?
A crime is a wrongful act that injures or interferes with the interest of society: manslaughter, murder,
thefts, beating, selling heroin, etc. Crimes are identified as such by the government. The object of
criminal proceedings is primarily punishment. It is the state against the Individual action. While a tort
is a wrongful act that injures or interferes with an individual’s person or property; civil wrong, results
in harm. The object in tort is compensation, reparation to the plaintiff for the loss or injury caused by
the defendant. It is an Individual against an Individual action.
An employer will not be liable for the torts committed by an independent contractor (a third party
who are contracted for a service, not employees of the organizations, a tort from one of them do not
make the employer vicariously liable). A contract of service (Employees) does, while a contract for a
service (Independent Contractor) Does not.
In recent years, however, the courts (mainly for policy reasons) have broadened the scope of vicarious
liability. The modern test for the "course of employment" is whether the employee's acts were so
closely connected with his employment as to make it fair and just to hold the employer vicariously
liable.
Where the defendant is engaged in carrying out his/ her obligations under a contract of employment,
and in the course of his employment, commits a tort against the Claimant then he or she may sue not
only the Defendant but the Defendant's employer. (Both can be sued).
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Labour Law
Types of Labour Contracts:
•
Definite period contract
•
Indefinite period contract
•
Contract for the completion of specific work
Arbitrary Dismissal- Article 104 A; The termination by the employer of the Labour contract shall
be deemed and arbitrary dismissal if the termination is due to any of the following causes:
1- The worker’s sex, color, religion, ideology, marital status, family responsibilities, or the female
worker’s pregnancy, delivery of a child, or breastfeeding
2- If the worker is affiliated to any workers’ trade union or participates legitimately in any of its
activities in accordance with the laws and by-laws
3- If the worker represents workers in a trade union association, has already enjoyed said capacity
or seeks to do so
4- If the worker submits a complaint or formal notice or instigates an action against the employer,
unless the complaint, formal notice or action are of a vexatious nature
5- If the worker exercises his right to take a leave in accordance with the provisions of this Law
6- The garnishment of the worker’s entitlements with the employer.
Article 104B: The Court, based on the dismissed worker’s request, shall order that the latter be
brought back to work when it is evidenced to it that his dismissal was due to one of the causes
specified in item 2 and 3 of the previous paragraph.
Article 105: The worker may terminate the labour contract without any notification in any of the two
following events:
1- If the employer or any of person acting on his behalf assaults the worker, during or as a result
of the work, whether verbally or through an act sanctioned by virtue of the law.
2- If the employer or any of his representatives commits an act prejudicing ethics against the
worker or any of his family members. The termination of the labour contract in these two cases
shall be deemed an arbitrary dismissal by the employer.
Compensations
Indefinite labour contracts – Working less than 3 months (Art. 111-a)
If the employer terminates the indefinite labour contract within the first three months as of the start
of work, the worker shall not be entitled to any compensation, unless the termination is an arbitrary
dismissal in accordance with any of the provisions of Articles 104 and 105 of this Law and in this case
the worker shall be entitled to a compensation equivalent to a one-month wage.
1 Month wage when the dismissal is arbitrary
No compensation when it is a normal compensation
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Indefinite labour contracts – Working more than 3 months (Art. 111-b)
If the employer terminates the indefinite labour contract for no reason or for an illegitimate reason
following the expiry of three months as of the date of start of work, he shall undertake to compensate
the worker with a compensation equivalent to the wage of two working days per each month of
service, with a minimum of one-month wage and a maximum of twelve months’ wage.
When the dismissal is for no reason or an illegitimate reason: 2/30 of the monthly wage* the months
of service
Minimum compensation= the wage of 1 month (15 months and below)
Maximum compensation= the wage of 12 months/1 years (180 months/ 15 years and more)
Definite labour contracts (Art. 111-c)
If the employer terminates the definite labour contract for no reason or for an illegitimate reason, he
shall undertake to compensate the worker with a compensation equivalent to the wage of the
remaining period of the labour contract, unless the parties agree on a lesser compensation provided
the compensation agreed upon does not fall below the wage of three months or the wage for the
remaining period whichever is lesser.
Maximum/General Compensation: The wage of the remaining period of the contract
Minimum Compensation: Wage of 3 months (the wage of the remaining period if the remaining
period is 3 months or less)
Contracts for the performance of a specific work (Art. 111-d)
If the employer terminates the labour contract concluded for the performance of a specific work for
no reason or for an illegitimate reason, he shall undertake to compensate the worker with a
compensation equivalent to the wage of the remaining period of the labour contract necessary for
the completion of the work agreed upon according to the nature of the work, unless the parties
agree on a lesser compensation provided the compensation agreed upon does not fall below the
wage of three months or the wage for the remaining period necessary for the completion of the
work agreed upon whichever is lesser.
Maximum/General Compensation: The wage of the remaining period of the contract
Minimum Compensation: Wage of 3 months (the wage of the remaining period if the remaining
period is 3 months or less)
Article 111-e Additional Compensations
In the cases specified in paragraph (a) and (b) of this Article, if the termination is deemed an arbitrary
dismissal in accordance with the provisions of Articles 104 and 105 of this Law, the worker shall be
entitled to an additional compensation equivalent to half the compensation due in accordance with
the provisions of this Article, unless the contract provides for a higher compensation.
Article 111-f period
For the purpose of this Article, a fraction of a month shall be deemed a whole month
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Company Law:
Company law is about the formation of companies, their continuing regulation of the companies and
the procedures for dealing with their assets when they are terminated in a liquidation (Bankruptcy).
Company: a "corporation" - an artificial person created by law. A human being is a "natural" person
however a company is a "legal" person. A company thus has legal rights and obligations in the same
way that a natural person does. Therefore, a company can sue and be sued in its own name, hold its
own property (land, chair, tables, etc.) and be liable for its own debts.
Definition of a company in law: Article 1 (Part I) of the Commercial Companies Law
“The Company is a contract by which two persons or more undertake to participate in a profit-making
economic project, with each of them offering a share in the form of money or work to divide the yield
of this project, whether profit or loss.”
Article 2:
A commercial company incorporated in the State of Bahrain shall take one of the following forms:
1-General partnership company
2-Limited Partnership company
3-Association in participation
4-Joint Stock Company
5-Limited Partnership By Shares
6-Limited Liability Company
7-Single Person Company
8-Holding Company
b-Any commercial company that does not take one of the above forms shall be null and void, and the
persons who have entered into contracts in its name shall be personally and jointly liable to third
parties for the obligations resulting therefrom.
Documents Required for registration:
•
Memorandum of Association: The Memorandum is addressed to the general public. A
document that regulates a company's external activities. According to Article (31):
The summary of the company’s memorandum of association shall specifically include the
following details:
i-The Company’s name, objective, headquarters and branches, if any.
ii-The partners’ names, domiciles, professions and nationalities.
iii-The company’s capital and sufficient definition of each partners’ shares.
iv-The names of the managers and the persons authorized to sign for the company.
v-The date of the company’s incorporation and its term.
vi-The beginning and the end of the company’s financial year.
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•
Articles of Association: A set of rules for running the company. They set out the heart of any
company’s organizational structure by allocating power between the board of directors (the
main management organ) and the general meeting (the main shareholder organ). It contains:
-
The company name
-
The registered office
-
Number of directors
-
Methods of their appointment
-
Power of directors
-
Voting rights of members
-
Payment of dividends
-
Etc.
Key Corporate Governance Rules and Requirements: Focuses on transparency, efficiency, clear
communication, fairness, accountability and anti-money laundering.
Roles of Board Members: The Chairman is considered the head of the company. The Chairman
represents the company before third parties and his signature solely shall bind the company in its
relationship with third parties, unless the Constitutional Documents require the Chairman to have
joint signature authority with one or more director. The Chairman must ensure that the decisions of
the board are executed.
Jointly, the directors must fulfil the role of the board in the management of the company. Severally,
each director must ensure that they work in the best interest of the company and makes the decisions
and actions required to serve that interest.
Directors are nominated by appointment or election by the general meeting of the shareholders. The
general meeting of the shareholders is the authority with director removal powers.
Legal duties of the directors:
•
to participate in the management of the company in a diligent, skillful, and efficient manner
in accordance with the law and the Constitutional Documents;
•
to serve the company as a representative of the interests of all the shareholders, and not one
or a specific group of shareholders; and
•
to disclose any personal interests, they may have in any of the issues discussed in board or
general meetings and to refrain from voting in respect of any of these issues
The role of the shareholders within a company: The general meeting of the shareholders is the
ultimate decision-making authority in the company. The involvement of shareholders in the
company's management and participation in controlling the activities of the directors is through their
participation in the general meetings and the decisions made therein.
The board shall adopt written corporate governance guidelines covering the matters stated in the
Corporate Governance Code and other. The company shall appoint an employee as the company's
corporate governance officer. They shall undertake the tasks of verifying the company's compliance
with the corporate governance rules, laws, regulations and decisions issued to implement them.
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Intellectual Property Law
Protects the legal rights of artists, writer, inventors, traders and etc.
Types of Intellectual Property:
•
Copyright: Protects original works of authorship including literary, dramatic, musical, and
artistic works, such as poetry, novels, movies, songs, computer software, and architecture.
To be protected by copyrights the work must be:
1- original - This means it has to be unique and not copied from anywhere else.
2- recorded- the work must be more than just an idea in the creator’s mind. It must be
recorded in tangible form.
Copyright protection only applies to "original works of authorship" that are "fixed in a tangible
medium of expression. “So, if you attend an improvisational speech that has not been notated
or recorded, you could publish the speech without fear of infringement.
Copyright law does not protect recipes that are mere listings of ingredients.
... Copyright protection may, however, extend to substantial literary expression—a
description, explanation, or illustration, for example—that accompanies a recipe or formula
or to a combination of recipes, as in a cookbook. That means Cookbooks protected.
There are 2 types of Ownership:
-Literary Ownership: Moral rights, the right to publish for the first time, the right to have the
author’s name placed on all copies of the work.
-Economic Ownership: To make Money, reproduce the work, distribute the original or copies
of work via sale, to rent the work for commercial purposes.
An author's economic rights are protected throughout his lifetime and for seventy years
beginning on the first day of the calendar year following the year of his death, except where
other provision is made in this subsection
The user who shared the original post retains all copyrights to the images. If you intend on sharing
this post, you MUST either obtain consent from the author or give attribution to the author. This
applies to all social media platforms. Any original pictures included in your tweets, Instagram,
Facebook etc. will be copyright protected. According to WIPO, the character limit to a Twitter post
generally makes the tweet unlikely to meet the criteria for copyright protection, but photos will be
protected.
•
Designs
-The design right
-Registered Designs
• Patents: A patent is an exclusive right granted for an invention, which is a product or a process
that provides, in general, a new way of doing something, or offers a new technical solution to
a problem.
A patent shall be given for every invention that is new, involves an inventive step and is industrially
applicable whether it is related to new industrial products – imported or locally produced -,
industrial methods or a new application of already known industrial methods. Art. 1 (2004)
Rights of the Patentee:
1- The patentee is entitled the right to prohibit others from Manufacturing, exploiting, using,
offering for sale, selling or importing the patented product, without prior permission. Using the
manufacturing method, if the subject patent is a method for manufacturing a product.
2- The owners of patents can grant licenses to whomever they choose.
The term of a patent is 20 years as of the filing date of the application. Art. 14 (2006)
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•
Trade-marks: Any sign capable of being represented graphically which is capable of
distinguishing the goods or services of one undertaking from another is illegible to be
registered for a trademark. A trade mark must be sufficiently distinctive to enable the public
clearly to identify the origin of the product and not confuse it with others. (art. 3. A. a
contrario). A trademark must not be against the public interest or morally offensive. (art. 3,
B.)A trademark must not be identical or very similar to an earlier registered trademark. (art.
3, K, L, M, N)
•
Registration of Trademarks in Bahrain: A trade mark registration is valid for ten years from the date
of filing the application. (art. 17) Thereafter, a trademark registration is renewable for periods of ten
years each. Marks which are not renewed will be cancelled by the Commercial Registry.
Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR): any means of setting disputes outside of the Court Room.
Alternative Dispute Resolution (ADR) refers to a variety of processes that help parties to resolve
disputes without a trial
Reasons for an alternative to court:
•
Voluntary. The parties themselves must be willing to reach a suitable solution for all parties.
•
Privacy- information and settlements reached in an ADR session will not be disclosed to the
public.
•
Quick – reaching an agreement in ADR is much faster than going to court.
•
Control – the parties are in total control of where and when they wish to meet for ADR.
Forms of ADR:
1. Negotiation: This is the simplest form of ADR. Where two people have a dispute they can
negotiate a solution themselves. Negotiation can be an informal process. It is usually the initial
stage to any form of dispute resolution. This is something the parties can do on their own
without the need for a lawyer. The parties can get together and try to reach a suitable solution.
Advantages: It is free (if no lawyers are used), private and quick
Disadvantages: It is not legally binding! The parties can change their minds at any point.
2. Mediation: This is where a neutral person (the mediator) helps the parties to reach a
compromise. The job of the mediator is to consult with each party and see how much common
ground there is between them. S/he should act as a facilitator, taking offers between the
parties.
Requirements for Certified Mediators:
• Be adults
• Be qualified and recognized for their integrity and impartiality,
• Not have been convicted of a crime involving dishonor or dishonesty,
• Not have been terminated or demoted from their office by a disciplinary decision, and
• Not have been removed from the Mediators List or have had their original practice license
annulled or suspended as the result of a disciplinary decision. (Art. 3.)
Registered Mediator in Bahrain
• Bachelor’s degree, or its equivalent, from a recognized institution.
• 3 years of experience.
• Received training in mediation (exemption allowed).
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Model Clauses- Mediation: “Any dispute arising out of or in connection with this contract shall be
referred to mediation in accordance with the Rules of Mediation of the Bahrain Chamber for Dispute
Resolution, which rules are deemed to be incorporated by reference into this contract.
“Any dispute arising out of or in connection with this contract, including any question regarding its
existence, validity or termination, shall be referred to mediation in accordance with the Rules of
Mediation of the Bahrain Chamber for Dispute Resolution (hereinafter “BCDR”). If the dispute remains
unresolved [30] days after the submission to BCDR of the Request for Mediation, or after such shorter
or longer period as the parties may agree in writing, the dispute shall be finally settled by arbitration
in accordance with the Rules of Arbitration of BCDR, which rules are deemed to be incorporated by
reference into this contract.”
3. Arbitration: Arbitration agreement is an agreement by the parties to submit to arbitration all
or certain disputes which have arisen or which may arise between them in respect of a defined
legal relationship, whether contractual or not. An arbitration agreement may be in the form
of an arbitration clause in a contract or in the form of a separate agreement. The arbitration
agreement shall be in writing. The parties can agree the number of arbitrators who will hear
their dispute. Normally one or three arbitrators. The parties will normally appoint someone
who is an expert in their area of business.
Conduct of Arbitral Proceeding:
• Equal treatment of parties.
• The parties are free to agree on the procedure to be followed by the arbitral tribunal in
conducting the proceedings.
• The parties are free to agree on the place of arbitration.
• The parties are free to agree on the language or languages to be used in the arbitral
proceedings.
The decision made by the arbitrator is called an award and is legally binding on the parties.
Model Clause- Arbitration (BCDR-AAA):
Any dispute arising out of or in connection with this contract, including any question regarding its
existence, validity or termination, shall be finally settled by arbitration in accordance with the Rules
of Arbitration of the Bahrain Chamber for Dispute Resolution.
The arbitral tribunal shall consist of [specify one or three] arbitrator[s].
The place of arbitration shall be [specify town and country].
The language of the arbitration shall be [specify language].
Arbitration in Bahrain:
1- GCC Commercial Arbitration Centre (GCCCAC)
2- Bahrain Chamber for Dispute Resolution (BCDR)
To become an Arbitrator:
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•
Arbitrators' Qualification & Development Programme by GCCCAC
•
Chartered Institute of Arbitrators (CIARB)