MANAMA: Amendments to Bahrain’s Commercial Companies Law that would encourage entrepreneurship and risk-taking have been proposed by experts.
The proposed reform to the current legal provisions to better protect directors and managers from liability when making business decisions in good faith were discussed during a workshop organised by the Economic Development Board (EDB) in cooperation with the Industry, Commerce and Tourism Ministry and the Central Bank of Bahrain.
The workshop included a presentation by Dr Riyadh Seyadi, a judge at the commercial courts of Bahrain, on the current legal provisions that regulate directors and managers liability.
Dr Jameel Alalawi, senior legal advisor at the Economic Development Board (EDB), spoke on the aspects of regulating directors and managers under comparative law, especially in the European Union, USA, UK, Japan and Korea.
Also shedding light on the topic were Hussein Baxter, a senior associate of Freshfields Bruckhaus Deringer’s corporate team; Norbert Knapke, a corporate partner in the Chicago office of Kirkland & Ellis; Dr Thorsten Volz, a partner and head of the Dusseldorf Office of Watson, Farley & Williams, and Dr Myriam Mailly, a business Lawyer in France who has been teaching since 2006 at law schools as well as at the SKEMA Business School.
As company directors and mangers have a sensitive role in the period approaching insolvency, Sameera Musayeva from the United Nations Commission on International Trade Law (UNCITRAL) outlined the commission’s recommendations for regulating the duties of company directors in the vicinity of insolvency.
The proposed reform was presented to the participants by Dr Al Alawi and Ameena Al Onaisi, head of the corporate legal affairs at the EDB.
Legislation regulating directors and mangers liability specify the duties of directors and the executive management, and places liability for failure to carry out such duties.
Among the aims of specifying such obligations is to protect the directors and mangers when making business decisions in good faith, after being adequately informed, and they rationally believe that the decision is in the best interest of the company.
Specifying such duties also help to protect the legitimate interests of creditors and other stakeholders and guide directors and mangers in taking the necessary step in a timely manner to minimise losses to creditors and avoid depleting the company assets and exposing the creditors to further risk when the company is experiencing financial distress that may lead to its insolvency.
Laws regulating companies have been the subject of regular assessment by the authorities over the past few years, resulting in significant enhancements in many areas.
Dr Al Alawi said: “We’re happy to be part of such an event and contribute to a meaningful discussion between legal experts from the public and private sector. It’s important to exchange views with the industry and be aware of the latest updates on laws and regulations around the world and keep up with the latest trends to better improve and enhance business related laws in Bahrain.”
avinash@gdn.com.bh
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