The efficient execution of court judgments is a cornerstone of justice and the rule of law in any legal system.
Recognizing the need for reform in this critical area, Bahrain introduced a new execution law in 2022, marking a significant step towards addressing challenges that had long affected the execution of civil and commercial judgments under the execution chapter of the Civil and Commercial Procedures Law (Legislative Decree No. 12 of 1971).
The new law introduces a range of changes intended to enhance the efficiency and accountability of the execution process, including private sector involvement, expanded protections for certain assets, financial disclosure obligations, coercive fines, revised travel ban provisions, surveillance mechanisms, special procedures for commercial entities, and criminal penalties for obstructing execution proceedings.
Bahrain's new Execution Law came into effect on 16 March 2022.
The law was introduced to address challenges that existed under the previous execution framework.
Electronic linkages between execution courts and relevant authorities were established to streamline execution procedures.
The law permits the involvement of licensed private execution agents.
Certain assets, including government support, social assistance, and subsidies, are exempt from execution.
Individuals are required to disclose their assets following notification of execution proceedings.
Coercive fines may be imposed for failure to comply with court orders.
Travel bans are subject to defined time limits and renewal periods.
Commercial entities are subject to specific execution procedures.
Criminal penalties apply for obstructing execution proceedings.
For over five decades, the execution of judgments in Bahrain was governed by Legislative Decree No. 12 of 1971 on the issuance of the Civil and Commercial Procedures Law.
While the legislation served its purpose for many years, the system was increasingly challenged by legislative and application-related obstacles that hindered the timely and effective execution of court decisions.
Among the challenges identified were difficulties relating to automated attachments, execution against companies with no registered assets, disproportionate seizure measures, delays resulting from growing case volumes, limited execution options within the electronic system, and the inability to address certain asset classes.
These challenges led Bahraini execution courts and the Ministry of Justice, Islamic Affairs and Waqf to pursue reforms and preparatory initiatives before the introduction of the new law.
The new Execution Law came into effect on 16 March 2022.
Prior to its implementation, Bahraini execution courts and the Ministry of Justice, Islamic Affairs and Waqf introduced several initiatives designed to improve execution procedures and address shortcomings in the previous framework.
These initiatives included:
Establishing electronic linkages between execution courts and relevant authorities.
Enhancing coordination with the Central Bank of Bahrain, the Ministry of Industry, Commerce and Tourism, and the Land Registration Department.
Collaborating with private sector entities for public auction procedures.
Issuing administrative guidance relating to the execution of judgments against solvent financial institutions and companies.
The new law incorporates and builds upon these initiatives within a comprehensive legal framework.
The law permits certain supportive execution tasks to be delegated to the private sector.
Licensed private execution agents and their employees are granted the status of public servants in the application of the Penal Code provisions.
Administrative Decisions No. 3 and 4 of 2022 regulate the rights and duties of private execution agents.
The Ministry of Justice, Islamic Affairs and Waqf is responsible for issuing authorizations and providing training programs through the Judicial and Legal Studies Institute.
The law expands the assets exempt from seizure or execution.
Government support, social assistance, and subsidies are protected from execution actions.
The law also establishes a minimum amount that must remain available in the bank accounts of individuals.
The Minister of Justice, Islamic Affairs and Waqf determined this amount to be BHD 400.
The law introduces a financial disclosure system for individuals.
Debtors must disclose their assets within seven days of notification of an execution action.
Debtors must continue disclosing changes to their financial circumstances until execution is completed.
The system shifts responsibility for identifying assets from the creditor to the debtor.
The law introduces coercive fines as a mechanism to compel compliance with court orders.
If a debtor fails to comply with a court order within ten days of notification, the creditor may request the execution court judge to impose coercive fines.
The judge may increase the fines as necessary to ensure compliance.
The law allows creditors to guide the execution court judge regarding assets owned by the debtor.
The judge may order relatives, agents, employees, or business associates of the debtor to disclose information concerning the debtor's assets.
The law permits travel bans where there is a risk that the debtor may leave the country to evade execution and visible assets are insufficient to satisfy the debt.
The duration of a travel ban may not exceed three months and may be renewed up to three times.
Where the debtor's assets are insufficient to satisfy the debt, the execution court judge must order an annotation on the debtor's credit report.
The annotation remains for a period of seven years.
The law introduces a surveillance system for monitoring transactions relating to debtor assets.
Relevant authorities must notify the execution court of transactions involving the debtor's assets.
Commercial companies are granted a 21-day settlement period.
Following that period, companies must provide full disclosure of their assets.
If no action is taken or the assets are insufficient to satisfy the debt, bankruptcy proceedings may be initiated.
For financial institutions licensed by the Central Bank of Bahrain, matters are referred to the Central Bank for appropriate legal action.
The law introduces criminal penalties for conduct that obstructs execution proceedings.
Penalties apply to intentional concealment or smuggling of assets, providing false information, and obstructing execution proceedings.
The penalties may also extend to legal entities where offences are committed in their name or for their benefit.
The new law introduces reforms intended to improve the efficiency and accountability of the execution process.
The law incorporates electronic execution mechanisms, expands execution tools available to courts, introduces financial disclosure obligations, and establishes procedures for commercial entities and financial institutions.
The law also seeks to balance the rights of creditors and debtors through measures relating to exempt assets, protected bank balances, and travel ban limitations.
The article discusses the reforms introduced by Bahrain's new Execution Law and the mechanisms established to improve the execution of civil and commercial judgments.
The new Execution Law came into effect on 16 March 2022.
The law was introduced to address challenges affecting the execution of civil and commercial judgments and to improve the efficiency and accountability of the execution process.
Government support, social assistance, and subsidies are exempt from execution actions.
The Minister of Justice, Islamic Affairs and Waqf determined the protected amount to be BHD 400.
Debtors are required to disclose their assets within seven days of notification of an execution action and continue disclosing changes until execution is completed.
Yes. A creditor may request the execution court judge to impose coercive fines if a debtor fails to comply with a court order within ten days of notification.
A travel ban may not exceed three months and may be renewed up to three times.
Commercial companies are granted a 21-day settlement period before additional measures may be pursued.
Criminal penalties apply to intentional concealment or smuggling of assets, providing false information, and obstructing execution proceedings.
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Hassan Radhi & Associates is one of Bahrain's leading full-service law firms and the exclusive Lex Mundi member firm in Bahrain. Established in 1974, the Firm advises local, regional and international clients across corporate and commercial law, banking and finance, dispute resolution, arbitration, construction, employment, real estate, regulatory matters and other areas of Bahraini law.
Author: Legal Team, Hassan Radhi & Associates
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