A new Arbitration Act 2009 has been Gazetted in The Bahamas as well as the Arbitration (Foreign Arbitral Awards) Act 2009, which addresses matters of international arbitration.
The new arbitration regime enhances the level of services The Bahamas is able to provide to the international business community. It gives teeth to the goal of establishing The Bahamas as a Centre for Arbitration, supported by a modernised legislative framework with a dedicated state of the art facility. The Government has indicated support for specialist court divisions that would showcase the specialist judicial expertise to be offered in arbitration and in other commercial matters.
A tried and true system of Alternative Dispute Resolution (ADR) is essential in the conduct of international business. Arbitration, one of the pillars of ADR, essentially is designed to provide just that. It is a private system of justice which exists parallel with but independent of the judicial system which would have powers limited only to the enforcement and recognition of arbitration agreements and arbitral awards and adjudicating appeals on points of law. In short, arbitration is the consensual process by which commercial disputes are resolved, outside of the court system, by an impartial tribunal in private.
Writing for latest issue of Bahamas Financial Services Review (BFSR), a publication of the Bahamas Financial Services Board (BFSB) John Wilson, Co-Chair of BFSB’s Arbitration Committee, said, *“Arbitration has been embraced by legal systems worldwide in an attempt to expeditiously resolve conflicts where resorting to litigation is undesirable or avoidable, and also to endeavor to preserve business or personal relationships between litigants where there may be acrimony as a result of the proposed or ongoing legal action.”*
He noted that arbitration can operate in two discrete contexts – international and local. The international context covers disputes involving international commerce such as sale of goods, construction, foreign direct investment, international shipping, international banking and finance, and international licensing or intellectual property agreements. All of the foregoing, to varying degrees, play a part in the commercial life of The Bahamas. In particular, the existence of an internationally respected arbitration regime is a pivotal and indispensable complement to The Bahamas’ position as one of the largest quality flags in international shipping. Local arbitration can be a useful tool in assisting with the resolution of personal disputes such as divorce proceedings, family trust disputes, labour disputes, property, and defective construction disputes, among many others.
BFSB’s Chairman Craig Tony Gomez, the other Co-Chair of the Arbitration Committee, agrees that there are many opportunities in international arbitration. In a recent article prepared for The Bahamas Investor, Mr. Gomez points out that the commercial world is now seeing more contracts between business entities than ever before. *“Quite naturally, a by-product of contractual relationships is conflict, disputes and disagreement over the terms in, and meanings of, a contract. Historically, the aggrieved party has sought redress through the courts. However, as the courts have become overburdened, contracting parties have sought to have their conflicts resolved outside the courts but under the auspices of the courts. This manner of resolution of disputes could provide a unique opportunity for The Bahamas.”* He maintains that The Bahamas is well positioned to become a centre for alternative dispute resolution, with the legislative regime firmly in place and with the commitment by both the private and public sectors towards this goal.
##Additional Background##
In The Bahamas arbitration is governed by statute. The Arbitration Act was passed at the end of the 19th century, and The Arbitration Clause (Protocol) 1931 updated the Arbitration Act by giving effect to the Protocol signed at the League of Nations in 1923. The Arbitration (Foreign Awards) Act 1931 also updated the Arbitration Act by giving effect to the Geneva Convention. The Protocol and the Geneva Convention were superseded by the New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards 1958, to which The Bahamas is a party. For international arbitration to flourish, it is necessary that the legislative regime recognises and upholds the integrity and the autonomy of the arbitration process