LEGISLATIVE DECREE NO. (10) of 1992
WITH RESPECT TO PROMULGATING THE
COMMERCIAL AGENCY LAW

We, Isa bin Salman AlKhalifa,             Amir of the State of Bahrain,

• having examined the Constitution,
• Amiri Order No. 4/1975,
• Legislative Decree No. 23/1975 with respect to Commercial Agencies and the organisation thereof as amended by Legislative Decree No. 10/1985.
• Decree No. 1 Finance, 1961 with respect to Commercial Registry and amendments thereof.
• Legislative Decree No. 12/1971 with respect to Civil and Commercial Procedure Law and the amendments thereof.
• and Amiri Decree No. 7/1987 with respect to Law of Commerce and the amendments thereof.,
• Upon the submission of the Minister of Commerce
• and the approval of the Council of Ministers,

HEREBY DECREE THE FOLLOWING LAW:

CHAPTER 1
GENERAL PROVISIONS

Article 1

"As amended by Legislative Decree No. (8) of 1998"

For the purposes of applying the provisions of this Law commercial agency shall mean representation of the principal in the distribution of goods and products or the offer thereof for sale or circulation, undertake service facilities of whatever nature, including Land, sea and air transport, travel and tourism agencies, services, insurance, printing, publication, press, production, advertisement and any other activities as prescribed by a resolution of the Minister of Commerce.

Article 2

No person shall become an agent for any company or institution from which the Government ministries purchase arms and military products associated with these arms or products.

Article 3

"As amended by Legislative Decree No. (8) of 1998"

The agency agreement shall include the following:

1. Name and nationality of the agent and the principal.
2. Properties, goods and services covered by the agency, rights and duties of the agent and the principal and the amount of profit or commission received by the agent in consideration for performing his functions.
3. The territory of the agent’s operations.
4. Agency term if it is created for a fixed period.
5. Domicile of the agent and the principal.
6. Brand name or trade mark of the goods.
7. Undertaking of the principal to provide adequate stocks of spare parts and maintenance services for the repair of vehicles, machinery, engines, electric and electronic equipments and appliances supplied under the agency.
8. Arbitration clause, if any.
9. Any additional terms agreed by the principal and the agent provided that such terms are not in conflict with the provisions of this Law.

Article 4

The commercial agent shall perform his duties and carry on his commercial activities as an independent contractor.

Article 5

"Repealed by Legislative Decree No. (8) of 1998"

Article 6

The agency agreement is deemed to be concluded for the common benefit of the contracting parties.

Article 7

" Repealed by Legislative Decree No. (49) of 2002 "

Article 8

1. The agency relationship shall terminate upon the expiry of the prescribed period, unless renewed by the agreement of the two parties. The concerned department at the Ministry of Commerce may, in the event of disagreement on renewal, cancel the registration of the agency or re-register the same in the name of another merchant with whom the principal makes an agreement.
2. If one of parties desires to terminate the agency relationship before the expiry of the fixed period, the registration of the agency may not be cancelled or re-registered in the name of another merchant without the consent of both parties.
3. The agent shall be entitled to claim compensation from the principal in the event of withdrawal of an agency made for a fixed period before the expiry of such period.
4. The agent shall, despite any agreement to the contrary, be entitled to claim compensation from the principal in the event of termination of the agency relationship prior to the expiry of the fixed period, if the efforts exerted by the agent led to an evident success in the promotion of the principal’s products or to the increase in number of its customers and due to the refusal of the principal to renew the agency agreement the agent was unable to receive the profit of such success.

Article 9

"As amended by Legislative Decree No. (8) of 1998"

1. The special committee formed by a resolution of the Minister of Commerce may cancel the registration of an indefinite term agency upon the agreement of both parties or if one of the parties demands the termination thereof, despite objection by the other party. The prejudiced party may claim compensation for any damage sustained by him.
2. The agent may, notwithstanding any agreement otherwise, claim compensation if his performance resulted in an evident success in the promotion of the principal’s products and increase in the number of customers but due to the termination of the agency contract the agent is unable to receive profits and commission generated by such success.

Article 10

1. An agent in an agency made for an indefinite period may not withdraw untimely or without reasonable cause from the agency, otherwise he shall be liable to compensate the principal for the damages resulting from such withdrawal.
2. The provisions of Article (9) of this Law shall apply in the event of withdrawal from an agency agreement made for a definite period.

Article 11

1. The principal shall reimburse the agent for expenses incurred by him in conducting the business of the agency in accordance with the provisions of the agreement regardless of the degree of success attained by the agent. If the conducting of the business of the agency requires the principal to pay certain amounts to the agent to be spent in the affairs of the agency the principal shall pay such amounts to the agent at his request.
2. The principal shall discharge any obligations borne by the agent for the purpose of conducting the business of the agency.

Article 12

"As amended by Legislative Decree No. (8) of 1998"

The institution of a suit, reference to arbitration or any similar action, shall not prevent import of goods, properties or the continuation of services, included in the agency, to the country. However, the Minister of Commerce may prohibit admission of the goods, properties or continuation of services if the public interest so requires.

CHAPTER 2
REGULATION OF THE
COMMERCIAL AGENCY AGREEMENT

Article 13

1. A commercial agency or any amendment thereto shall be entered in the Commercial Agencies Registry specially maintained for this purpose by the concerned department at the Ministry of Commerce.
2. An unregistered agency shall not be recognized and no suit may be instituted in respect thereof.

Article 14

1. If the applicant is a natural person the following conditions should be satisfied:
   1. He should be a Bahraini national.
   2. Not previously convicted and punished for felony or for an offence punishable by detention or an offence detrimental to honesty or integrity or an economic crime unless he is reinstated.
   3. Not adjudged bankrupt unless reinstated.
2. If the applicant is a company the following conditions should be satisfied:
   1. Should be duly incorporated in accordance with the prevailing regulations.
   2. Its objects should include all or part of the activities provided for by Article (1) of this Law.
   3. The Bahraini shareholding in its share capital may not be less than 51% and it should have its registered office in Bahrain.
3. Registration shall be subject to the provisions of Decree No. (1) Finance 1961 on the Establishment of the Commercial Registry as amended.

Article 15

"As amended by Legislative Decree No. (8) of 1998"

It is imperative for the validity of the agency upon registration that the relationship between the agent and the principal be direct. However, an agency may be registered between an agent and a company, an export institution or any other party provided that such company, export institution or other party is authorised to make agency contracts for the produced goods or commodities. Termination of the relation between the company, the export institution or the party signing the agency agreement and the producing company, shall not affect the obligations of the principal to the agent.

Article 16

The agency registration shall be renewed within two months from the end of the first two years of its registration or the last renewal date of the agency.

Article 17

1. The registration and renewal application shall be submitted in the prescribed form prepared by the concerned department at the Ministry of Commerce.
2. The application shall be submitted with the identification documents.

Article 18

1. The concerned department at the Ministry of Commerce shall decide on the application for registration or renewal within thirty days from the date of application and shall provide the agent, upon his request, with a signed certificate evidencing registration or renewal in the Register.
2. The Directorate may reject the application for registration or renewal stating the grounds for rejection and shall notify the party concerned with a copy of the rejection decision by registered mail.
3. Any concerned party may appeal against the decision on the registration or renewal to the Minister of Commerce within a period not exceeding 30 days from the date of publication of the decision in the Official Gazette or the date of notification thereof to the concerned party. The decision on the appeal shall be made within 30 days from the date of submission of such appeal.
4. Any concerned party may obtain from the concerned department at the Ministry of Commerce a copy of the extracts from the register.

Article 19

1. The concerned department at the Ministry of Commerce may cancel the registration of an agency if no application has been submitted within the prescribed period or if one of the required conditions for registration or renewal has not been satisfied or if it is revealed that registration or renewal has been wrongfully procured or was affected on false information.
2. The concerned department shall make its decision in accordance with the terms and conditions stipulated for the original applications for registration. Any concerned party may appeal against the decision in accordance with the provisions of paragraph “C” of the preceding Article.

Article 20

1. Any concerned party shall be entitled to appeal to the High Civil Court against any order issued under this Law, related regulations or resolutions issued in accordance therewith. The appeal period shall be 30 days from the date of notification of the order or the date of its publication in the Official Gazette.
2. If the order is subject to review under Article 18 and 19 of this Law appeal may not be submitted prior to the submission of the review application or the lapse of the review period. The appeal period shall be 30 days from the date of notifying the concerned party of the rejection of his application for review or after the expiry of 30 days from the date of submitting the application for review without response from the concerned authorities which is deemed to be a rejection.

Article 21

1. Every registered or renewed agency shall be published in the Official Gazette. Every addition amendment or deletion to the particulars stated in the Register shall also be published in the Official Gazette.
2. Publication shall be made within a period of 30 days from the date of entry in the register of the registration, renewal, addition, amendment or deletion.

Article 22

The agent to whom the agency is transferred shall purchase all the stocks of goods covered by the agency from the previous agent for the market price or the cost thereof in addition to 5% of such price or cost whichever is less as a maximum price unless the parties agree otherwise. The new agent and the principal shall be jointly responsible for all the obligations of the previous agent towards a third party. Such liability shall be limited to the market value of the goods or service if the liability is originally for goods or services.

Article 23

Every agent shall make available to the consumers adequate stocks of spare parts and tools for the vehicles, engines, machines and equipments as well as warranties offered by the producers or the original suppliers of the goods, which are the subject matter of the agency.

Article 24

1. The agent or his legal representative and the company manager shall, upon the repudiation of the agency agreement or the expiry thereof, apply to the concerned department at the Ministry of Commerce for the cancellation of registration of the agency in the Register within one month from the date of repudiation or expiry thereof provided that such application shall be accompanied by supporting documents.
2. In the event of death of the agent and succession of his heirs to the estate, sale of the company or establishment through which the agency operations are conducted or the merger thereof into another company or establishment, the agency agreement shall continue to be valid towards the principal provided that the heirs, purchaser or the merging company or establishment agree to the continuation of the agency agreement. The heirs, the purchaser or the merging company or establishment shall be liable for all the obligations of the previous agent. This liability shall include, towards the purchaser, seller, merging and merged companies or establishments, all obligations provided for by Article 22 hereof subject to the joint liability provided for by the same Article. Such joint liability shall include the purchaser, the seller, the merging and the merged company or establishment.
3. Subject to the provisions of Article (9) hereof the agency shall continue to be valid for an indefinite period if the agency agreement is made for an indefinite term, otherwise the agency shall terminate upon the expiry of its term.

Article 25

"As amended by Legislative Decree No. (8) of 1998"

In the event of sale of the principal company or corporation or the merger thereof into another company or corporation and the refusal of the purchasing or merging company or corporation to continue to be bound by the agency agreement, the agent shall be entitled to claim compensation from the purchasing or merging company or from the new agent, if any, for any damage resulting from the discontinuation of the agency, subject to the provision of Article 22 of this Law.

CHAPTER 3
PENALTIES

Article 26

Without prejudice to any severer punishment provided for by the Penal Code or any other Law, any person who contravenes the provisions of Article 23 of this Law shall be liable to a fine not less than BD 500 and not exceeding BD 1000.

If a previously convicted person commits the same offence within 3 years from the date of such conviction he shall be punishable by the same punishment in addition to any punishment inflicted an order may be passed to close the place of business or the part thereof used for the agency operations.

Article 27

Any of the following persons shall be liable to a fine not exceeding BD 500:

1. Any person who submits incorrect information to the concerned department at the Ministry of Commerce, whether these information relate to the registration, renewal or entry in the Commercial Agencies Registry or if he does not notify the aforesaid Directorate of any amendment in the particulars of the agency.
2. Any person who states in his stationary or in any publications associated with his commercial transactions or advertise by any means of publication that he is an agent for a company or a corporation without his name being registered in the Commercial Agencies Registry.
3. Any agent who knowingly continues to perform the business of the agency despite his subsequent non-compliance with one of the conditions stipulated by Article (14) of this Law.

Article 28

In the event of a contravention provided for in either of the two preceding Articles by a company the jointly liable partner, the director in charge or the chairman, as the case may be, shall be liable to the punishments provided for in this Law.

Article 29

The employees of the concerned department at the Ministry of Commerce designated by the Minister of Commerce shall be entitled to enter shops, places of business and offices to investigate any violation to the provisions of this Law and to refer the same to the Public Prosecutor and shall also be entitled, subject to the approval of the Minister of Commerce, to review books, documents and papers

CHAPTER 4
MISCELLANEOUS PROVISIONS

Article 30

In the event of referring any dispute arising from the agency agreement to arbitration the arbitration decision shall be final.

Article 31

"As amended by Legislative Decree No. (8) of 1998"

The Minister of Commerce may, from time to time, issue regulations and resolutions for the implementation of this Law as regards, in particular, the following:

1. Organization of the work at the concerned department at the Ministry of Commerce with regard to the commercial agencies and the organization of the provisions pertaining to the Registry provided for in Article 13 of this Law, the manner prescribed for the maintenance thereof and the regulation of the issue of certificates for the particulars contained therein.
2. To determine particulars for publication in the Official Gazette in accordance with the provisions of Article 21 of this Law.
3. To determine, subject to the approval of the Council of Ministers, the fees payable on applications for registration, renewal and issue of certificates.

Article 32

The Legislative Decree No. (23) of 1975 on the Commercial Agencies and the Organisation thereof, as well as all other provisions conflicting with the provisions of this Law, shall be repealed.

Article 33

The Minister of Commerce shall implement this Law and it shall come into force as of the first day of the month following the lapse of 3 months from the date of its publication in the Official Gazette.

 Isa bin Salman Al Khalifa
 Amir of the State of Bahrain

Issued at Reffa’a
14 Muharram 1413 Hijri
14 July 1992