The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s plans to adopt United Nations (UN) model law into Bahamian legislation will enable this nation to match leading international arbitration jurisdictions for “high quality service’, a legal specialist said yesterday.

Colin Jupp, an arbitration specialist and associate with the Peter D. Maynard & Company law firm, told Tribune Business there was “much discussion” between the Government and private sector about updating the Bahamas’ current arbitration legislation.

The Bahamas passed the Arbitration Act 2009 and Foreign Arbitral Awards Act 2010, which includes the New York convention on recognising foreign arbitral awards, but these have failed to provide the hoped-for springboard to establish this nation as an international arbitration centre.

Hope Strachan, minister of financial services, last year pledged to adopt the United Nations Commission on International Trade Law’s (UNCITRAL) Model Law on International Commercial Arbitration into Bahamian legislation, arguing that it would boost confidence among foreign parties eyeing the Bahamas as a potential arbitration seat.

Expressing hope that this would occur in the “not too distant future”, Mr Jupp told Tribune Business: “The impact of the UNCITRAL model here will give us the legislative tools to provide the same high quality level of arbitration services as all leading arbitration jurisdictions in the world.”

Dr Peter Maynard, senior partner at Peter D. Maynard & Company, added that the Arbitration Act 2009 had been based on both its UK counterpart law and the UNCITRAL model.

Yet he said: “UNCITRAL and the UK have not listed the Bahamas among the UNCITRAL model countries. Steps are being taken to make it even more transparently compatible with UNCITRAL.”

International arbitration, and Alternative Dispute Resolution (ADR), have become increasingly popular as methods for resolving commercial disputes.

They are perceived as avoiding the lengthy delays and costs associated with court litigation, and ADR/arbitration clauses are often being inserted into contracts - especially by companies conducting multinational or cross-border business.

The Bahamas has harboured ambitions to become a recognised international arbitration centre for more than a decade but, while numerous building blocks to achieve this goal seem to be in place, progress to achieving the overall objective has been slow.

Speaking ahead of the fourth annual Arbitration and Investment Summit, which will be held on January 22-23 and focus on Latin America and other emerging markets, Mr Jupp said an international arbitration centre capability would work “hand in hand” with the Bahamian financial services industry.

“In our view, arbitration and mediation are an excellent way to promote banking and trust services,” he told Tribune Business. “It gives clients all over the world a certain level of comfort that any disputes occurring over a complex commercial and financial structure will be resolved.”

Pointing out that confidentiality was “fundamental” to the Bahamas’ international trust and financial services clients, Mr Jupp added: “Arbitration lends itself to being resolved in a confidential manner, as oppose to a public manner through the courts.

“Costs are also a major factor in whether to go to court, and the most attractive thing about arbitration and mediation as a method of resolving disputes, particularly for financial and trust clients, is that these persons are able to determine what rules are followed in resolving their disputes.

“It gives them a great sense of comfort, knowing how their disputes will be resolved. They [arbitration and financial services] most definitely go hand in hand, and complement each other.”

Mr Jupp and Dr Maynard agreed that the Bahamas’ reputation as a private wealth management and estate planning jurisdiction made it a logical place for the arbitration/resolution of trust disputes.

They added that clients also wanted disputes resolved in the jurisdiction where the assets were located, enhancing the ‘complementary effect’ of the Bahamas becoming a recognised international arbitration centre.

Dr Maynard pointed out that numerous arbitrations were already being held in the Bahamas, adding that there was “strong demand” from both international and domestic clients for such services.

And, besides financial services, the Bahamas’ extensive maritime industry - including the world’s sixth largest shipping registry by tonnage - also offers a potentially rich source of arbitration disputes.

Genea Nottage, a maritime law specialist with Peter D. Maynard & Company, told Tribune Business: “We have a lot of ships registered under our flag, and as a way to generate revenue for the country, we can set up an arbitration centre and make it available for ships under our flag.”

The Bahamas’ registry contains a wide variety of ships, ranging from cargo tankers to cruise ships. The latter, in particular, are frequently having to deal with passenger injury claims in forums such as the Florida courts, when they could be resolved in this jurisdiction via arbitration.

“We do need a centre to deal with these types of things as they happen,” Ms Nottage told Tribune Business. “When you own a vessel, you need security if these things happen.

“Having an arbitration centre in the Bahamas would make us more attractive, with ship owners wanting to come and register their vessels under our flag. I think that’s the way to go for the Bahamas.”

Dr Maynard agreed, adding: “I think this is an area where there can be lots of growth taking place, and we have technical experts in abundance here between the Freeport Harbour and Container Port. And there are a lot of Bahamians qualified in maritime law.”