The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamian private sector yesterday rejected the Government’s position that winding-up Baha Mar is the quickest way to complete the project, instead recommending independent arbitration/mediation as the best route to “salvage” the $3.5 billion development.

Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC), told Tribune Business that the organisation had made an ‘11th hour’ bid to break the Baha Mar impasse by calling for arbitration in letters sent to both Prime Minister Perry Christie and Sarkis Izmirlian.

He added that the Chamber had offered its services, and was prepared to reach out to bodies such as the International Chamber of Commerce’s (ICC) International Court of Arbitration for experienced, objective arbitrators who could mediate a solution to the four-party dispute.

Mr Sumner told Tribune Business that despite today’s winding-up petition, in which the Government is bidding to oust Mr Izmirlian from control of Baha Mar over an unpaid $59 million debt, it was still not too late for arbitration.

He added that a key problem in the Baha Mar “stand-off” was the absence of an independent party to mediate the talks, especially since the Government had dropped its initial ‘mediator’ role by filing the winding-up petition.

“As far as we’re aware, there’s never been consideration given to hear this matter through arbitration or mediation,” Mr Sumner told Tribune Business.

“Our position is, at this point in time, because the parties seem to be at a bit of an impasse, to draw on the international expertise of reputable, competent arbitrators who are truly independent of this process.

“There has been no independent person involved in the process, and because of that we have a stand-off between the four parties to this agreement, this dispute,” the Chamber chief executive added.

“None of them have a level of independence. The Government wanted to be an independent mediator before they joined themselves to this dispute by filing the winding-up petition. They’re no longer considered an independent mediator in this process.”

He added that all sides had been “quick on the draw” to go to court, either via Baha Mar’s Chapter 11 bankruptcy protection filing in Delaware, or the Government’s efforts to drag the case back into the Bahamian Supreme Court via the winding-up petition.

Now, Mr Sumner said there were four parties - Baha Mar/Mr Izmirlian; the China Export-Import Bank; China Construction America; and the Government - who had all dug themselves into entrenched positions they showed little sign of budging from.

“No one is prepared to compromise. You have four very stubborn parties,” Mr Sumner told Tribune Business. “No one is prepared to make a move to compromise, and unless something changes we are going to be stuck in this position for a long time.”

The Chamber, in a release yesterday, directly challenged Prime Minister Perry Christie’s assertion in his national address more than a week ago that the Government’s petition to wind-up Baha Mar and appoint a provisional liquidator would be the fastest route to completing and opening the $3.5 billion resort.

It said: “The BCCEC does not believe that the winding-up of Baha Mar is the most expedient means to achieve this common objective.”

Mr Sumner added yesterday: “We’re encouraging all parties, but perhaps the developer, to examine a greater degree of flexibility in his position to get this matter resolved.

“If we want to see this matter resolved quickly, our recommendation is first of all that the parties come together and try and resolve their differences, but at this stage the only way we can see this happening is if someone independent, a well-respected arbitrator, comes in to try and help resolve this.

“If everyone maintains the positions they have, we will not see a resolution at this point. The Chamber recommends very strongly, and it’s not too late, that all parties get in a mediator they are comfortable with.”

Through bodies such as the ICC and International Court of Arbitration, Mr Sumner said the Baha Mar parties could access impartial arbitrators with expertise in construction and resort development - the areas central to the dispute.

Unlike the four sides, Mr Sumner said they would “have no axe to grind, no bias coming in, and they’d be able to provide very objective and clear opinions as to how this matter is to be resolved”.

The Chamber chief executive said that for arbitration to work, it was vital that all parties accept the arbitrator’s decision, and treat it as binding on them.

Mr Sumner also emphasised that the Chamber did not want to “take anything away” from Bahamian mediators, but given that the Baha Mar dispute was “such an immense undertaking” it was necessary to being in international expertise - possibly working alongside locals.

Noting that Baha Mar had already requested Delaware Bankruptcy Court permission to pay some $4 million in legal fees to a combination of Bahamian, US and UK attorneys, Mr Sumner said arbitration offered a quicker, cheaper route to resolution that would be more private than going through the court system.

While acknowledging that the courts were available, Mr Sumner added that they were “not the best option, and certainly not the best option to get a resolution of this dispute”.

He warned of some “very hefty legal bills” for all sides, especially if the two cases before the Supreme Court - Chapter 11 recognition and the winding-up petition - went all the way through the various stages of appeal to the London-based Privy Council.