Bahrain has introduced significant procedural reforms affecting the resolution of construction, mechanical, and electrical contract disputes before the Bahrain Chamber for Dispute Resolution (BCDR).

Ministerial Resolution No. 45 of 2026, which came into effect on 12 June 2026, amends the BCDR’s Dispute Resolution Procedures Regulations by introducing a dedicated framework for disputes exceeding BHD 500,000 arising from construction, mechanical, and electrical contracts. The reforms are intended to streamline proceedings, encourage early settlement, and improve the efficiency of dispute resolution.

Key Changes

Mandatory Schedule of Claims

Claimants must now submit a detailed Schedule of Claims when commencing proceedings. The Schedule must:

• Set out the claimant’s demands in detail; and
• Be supported by a technical opinion from a specialist in building, mechanical, electrical, or accounting matters, as applicable.

This requirement places greater emphasis on early case preparation and evidentiary support before proceedings begin.

Accelerated Response Requirements

Defendants are required to respond to the Schedule of Claims within two weeks of service.

Failure to respond may result in the matter proceeding based solely on the claimant’s submissions, with the file being referred directly to the adjudicating panel.

Mandatory Mediation Process

The amendments introduce a dedicated mediation pathway for qualifying construction, mechanical, and electrical disputes (Article 32 bis).

Once the Schedule of Claims and the defendant’s response have been submitted, the matter is referred to a delegated judge, who will review any formal defences raised by the defendant, including jurisdiction, standing, and res judicata.

The dispute will proceed under the BCDR’s ordinary procedures where a formal defence appears sufficiently serious on its face or where the parties have already attempted mediation before commencing proceedings.

Where neither of these circumstances apply, the judge will issue a final order referring the dispute to mandatory mediation.

Mediation Procedure and Timelines

The new framework establishes a structured process for the appointment of mediators and the conduct of mediation.

Key requirements include:

• Parties have five working days from notification of the mediation order to agree on a mediator.
• If no agreement is reached, the BCDR registrar will appoint a mediator from the approved lists.
• Parties may object to the appointed mediator within three days of notification, provided reasons are given.
• The delegated judge may reject the objection, invite the parties to select from a shortlist of proposed mediators, or appoint a mediator directly.
• The judge’s decision is final.

The mediation period:

• Runs for 30 working days from the date the mediator is agreed, appointed, or designated.
• May be extended with the delegated judge’s approval upon a reasoned request from the parties or the mediator.
• Cannot exceed 90 working days in total.

Settlement Incentives and Enforcement

Where mediation results in a settlement:

• The mediator prepares a settlement agreement for signature by the parties.
• Once ratified by the judge, the agreement has the force of an enforceable instrument.
• The claimant is exempt from court fees on the settled portion of the claim, subject to the applicable provisions relating to mediator fees, being 10% of the court fee paid in the case of a full settlement and 5% in the case of a partial settlement.

Consequences of Non-compliance

The amendments introduce clear consequences for parties that fail to comply with the new procedures.

For claimants:

• Failure to submit the required Schedule of Claims, or unjustified absence from mediation, may result in the claim being struck out.
• Unjustified absence from mediation may also result in the claim being struck out.
• If the claim remains struck out for 60 days, it will be treated as though it had never been filed.

For defendants:

• Failure to submit a response or attend mediation after proper service may result in the matter proceeding based solely on the claimant’s submissions.

Practical Steps for Businesses

Businesses operating in the construction and engineering sectors should consider:

• Reviewing contract administration and document management procedures.
• Ensuring project records, correspondence, variations, and delay notices are properly maintained.
• Engaging technical experts at an early stage when disputes arise.
• Establishing internal processes to meet the new filing and response deadlines.
• Preparing for mandatory mediation as a core stage of the dispute resolution process.
• Assessing current dispute management practices against the updated BCDR requirements.

How ASAR Can Help

ASAR advises clients on the legal and procedural aspects of construction and engineering disputes, including claim assessment, preparation of supporting documentation, mediation strategy, and representation throughout BCDR proceedings.

For further information, please contact ASAR Bahrain at: asarbh@asarlegal.com