The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

Arbitration is an "important tool" that will improve The Bahamas' competitiveness, ease of doing business and slash the time and money incurred by companies in pursuing expensive court litigation, a Cabinet minister asserted yesterday.

Michael Halkitis, minister of economic affairs, leading the Senate's debate on the Arbitration Amendment Bill 2023, said the legislation represented an improvement on The Bahamas' existing framework for alternative dispute resolution (ADR).

Explaining how arbitration works, he said: “The primary role of an arbitral tribunal is to apply the relevant law and decide on the dispute by administering an arbitral award. In principle, arbitral awards are final and binding decisions of the arbitral tribunal.

"They can only be challenged before a national court under exceptional, and in limited, circumstances; that is,on the grounds of serious irregularity. Arbitral awards can be enforced in most countries worldwide by virtue of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, better known as the New York Convention.

“The use of ADR is important for several reasons: Firstly, national court systems cannot handle the overwhelming number of disputes that arise. We know that in The Bahamas it can take several years for a matter to move through the court system, and we know that most times people want their matters to be quickly resolved. ADR is considered to be faster, more efficient and cost-effective for the involved parties.

“Secondly, when disputes are heard expeditiously with certainty and accuracy, that directly and positively impacts the ease of doing business – something that this Davis administration is committed to improving," Mr Halkitis added.

“Thirdly, ADR is considered to be the preferred dispute resolution mechanism in the global business community. The days of running to court for major disputes, worth millions of dollarsc are long gone. Increasingly, multinational enterprises and even Governments are utilising ADR, particularly arbitration and mediation, to resolve disputes efficiently and privately in the name of quickly getting back to business.”

Mr Halkitis thus argued that ADR is an “important tool for economic development” for the Bahamian economy, and especially tourism, financial services and foreign direct investment (FDI) - the key drivers. He added: “Based on our experience, we know that FDI is essential for the growth and stability of a state’s economy.

"We know that FDI directly increases consumer spending, and that The Bahamas successfully achieving an international reputation as a leading international centre for international arbitration etc can result in increased FDI flows. We know this because we have witnessed the economic benefit of international arbitration in other jurisdictions.

"For instance, the combined value of international arbitrations which take place in London, a leading arbitration seat, in any given year has been recorded at $40bn to $50bn, significantly contributing to the income of legal and dispute resolution service providers as well as the wider service economy in London.”

The Bill will provide for the inclusion of expanded provisions that support the arbitration of trust disputes, ensure there is a penalty for improper disclosure of confidential information, and restrict the appeal of an arbitration award.