BAB Participates in a Round Table Discussion Titled ‘Towards Strengthening Cooperation Between Bankruptcy Trustees and the Banking Sector Under the Reorganization and Bankruptcy Law

The Institute of Judicial and Legal Studies, in cooperation with the Bahrain Association of Banks (BAB), organized a discussion session titled "Towards Strengthening Cooperation Between Bankruptcy Trustees and the Banking Sector Under the Reorganization and Bankruptcy Law," held at the Ritz-Carlton Hotel, with wide participation from experts, bankruptcy trustees, representatives of the banking sector, relevant government and regulatory bodies, members of the judiciary, as well as a select group of lawyers and legal practitioners.

In his opening remarks at the session, Judge Dr. Riyadh Mohammed Seyadi, Director of the Institute of Judicial and Legal Studies, affirmed that organizing this event stems from the Institute's role in supporting the legislative environment and promoting legal practices aimed at the continuous development of the legal and judicial system. He noted that this is achieved by providing specialized dialogue platforms that bring together various relevant parties to discuss practical challenges, explore opportunities for improvement, and exchange expertise and experience in this vital field, all of which contributes to raising the efficiency of applying national legislation and achieving its intended objectives.

He pointed out that the Reorganization and Bankruptcy Law is among the legislations that have contributed to developing Bahrain's legal and economic environment, particularly by enabling distressed companies to restore their operations and avoid liquidation. He noted that this requires combined efforts among all parties addressed by its provisions, including bankruptcy trustees, creditors, and the banking sector, given its role as a potential and preferred creditor, alongside lawyers and other stakeholders.

For her part, Ms. Zeeba Askar, CEO of the Bahrain Association of Banks, explained that the banking sector is a key partner in the reorganization and bankruptcy framework, given its vital role in supporting and financing economic activities. She emphasized the importance of strengthening communication and coordination channels with bankruptcy trustees and relevant parties, which helps facilitate procedures and achieve a balance between creditors' rights and the goals of reorganization and business continuity.

Mr. Gabi El Hakim, Chairman of the Legal Committee at the Bahrain Association of Banks, commended the outcomes of the session, describing them as laying the foundation for an advanced stage of strategic partnership between the banking sector and bankruptcy trustees.

He added that the effective implementation of the Reorganization and Bankruptcy Law requires striking a careful balance between protecting creditors' rights and giving companies a genuine opportunity to recover. He highlighted the importance of procedural speed in preserving the economic value of companies and avoiding unjustified losses for creditors, in line with international best practices and in a manner that strengthens market stability.

The session included discussions on several key themes, including the role of the bankruptcy trustee in balancing the interests of creditors and debtors, mechanisms for handling conflicting claims and debt priorities, as well as the impact of timeframes and procedural speed on the effectiveness of restructuring and reorganization processes.

The session also provided a specialized platform for exchanging views and expertise among participants and explored several developmental proposals that could enhance procedural efficiency and improve the management of financial distress and reorganization cases.

Participants affirmed the importance of continued cooperation and coordination between judicial and regulatory authorities, the banking sector, and bankruptcy trustees, in a way that promotes a shared understanding of roles and responsibilities, raises procedural efficiency, and balances various interests, ultimately serving the law's objectives and enhancing the competitiveness of Bahrain's business environment.