The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A Bahamian dispute resolution practitioner yesterday said Baha Mar had “waited too late” to resolve its dispute with its Chinese partners, arguing that they should have gone to mediation “months ago”.

Attorney Caryl Lashley, a member of Alternative Dispute Resolution (ADR) Bahamas, said the Baha Mar dispute and battle over staff gratuities at the Melia Nassau Beach Resort were perfect examples of cases that should have gone to arbitration.

But Mrs Lashley told Tribune Business that Baha Mar had “waited too late” to begin talks to resolve its issues with its general contractor, China Construction America, and China Export-Import Bank as debt financier.

“That ought to have gone to mediation months ago,” she said. “We are now in July. They knew in November that the resorts were not going to open on time. They had an opportunity and obligation to look at that then,” said Mrs Lashley.

She spoke to Tribune Business while at a Bahamas Society of Engineers (BSE) meeting yesterday, where she gave a presentation on alternative dispute resolution. ADR Bahamas is a local organisation consisting of 10 practitioners offering arbitration and mediation services

 Baha Mar was initially expected to open last December but that was delayed. In January, the resort said it would open its doors to paying customers on  March 27, but that date was then pushed back to early May due to ongoing construction work.

In a statement, Baha Mar criticised the performance of its lead contractor, China Construction America, revealing that work at the property had not met its “standards of excellence” and was unacceptable.

Baha Mar added that it had relied on statements from its construction manager and lead contractor when it previously announced a March 27 opening date.

Last month, Baha Mar filed for Chapter 11 bankruptcy protection in a Delaware court. The parties are said to be open to continued negotiations to resolve the dispute despite various legal tactics, such as the winding-up petition filed by the Government.

Mrs Lashley yesterday said arbitration and mediation were two options for dispute resolution. She noted that whereas an arbitration panel hears a dispute and delivers a judgment considered final and binding on the parties involved, a mediator’s role is more to facilitate dialogue between them to reach an agreement satisfactory to both sides. Mrs Lashley stressed that “good faith” is absolutely essential in alternative dispute resolution (ADR).

    “Once they delayed, other things got into the mix,” she said of Baha Mar. “The right mindset and good faith, all that needs to be in place. Good faith is absolutely essential in ADR.

“Look at the Melia dispute. The union is at the table again. They should have done that from the beginning.”     

In a decision handed down last week, Supreme Court Justice Roy Jones found that the Melia was not obligated to pay staff 15 per cent gratuity for serving all-inclusive guests - something he said would amount to “a gratuitous giveaway”.

Justice Jones said “a lamentable feature” of the case was the failure of both sides to agree on the all-inclusive gratuity rate and formula, which “led to a climate of extraordinary uncertainty [that] undermined the trust that is an essential ingredient to their partnership”.

Baha Mar said at the time that it was forced to cease the normal gratuity payments at the Meliá after 10 months of negotiations failed to reach an agreement with the union on a new arrangement. 

The dispute ultimately led to union strike threats during the busy Christmas and New Year period, forcing the resort to secure an interim injunction restricting employees from taking industrial action.