By NEIL HARTNELL
Tribune Business Editor
The Bahamas can still realise its international arbitration centre ambitions despite being “late to the game” after 10-15 years of mere “talk”, a well-known QC argued yesterday.
Brian Moree QC, pictured, senior partner at McKinney, Bancroft & Hughes, told Tribune Business that The Bahamas still had “a window of opportunity” to develop a sector that would create major “synergies and economies of scale” with the financial services and maritime industries.
With the Government set to table the International Commercial Arbitration Bill 2018 in Parliament “shortly” (see other article on Page 1B), Mr Moree said passing such legislation was likely “the easiest part of the exercise” given the significant investment in human and physical infrastructure such an industry would require.
Warning that “we can’t just open it and the business will come”, he said the proposed legislation must be accompanied by “a fairly liberal Immigration policy” that would allow feuding parties, their foreign attorneys and experts to enter The Bahamas for arbitration hearings.
A fully-functional information technology (IT) platform; experienced administrative staff who are multilingual and could provide case management oversight; and translation services, as well as physical premises, were also identified as essential to turning The Bahamas’ arbitration centre vision into reality.
Besides putting in the necessary supporting platform, Mr Moree said the Bahamas needed to form strategic alliances, joint ventures and partnerships with international arbitration organisations and rival centres to establish its “credibility”, and thus be able to attract sufficient business volumes to support its ambitions.
He added that it also needed to demonstrate, and promote, its dispute resolution capabilities such that international businesses included clauses in contractual agreements mandating that any commercial fights be resolved through arbitration in the Bahamas.
“I think we are late to the game,” Mr Moree told Tribune Business. “The issue of establishing the Bahamas as an international arbitration centre has been discussed many times over the past 10-15 years.
“While, in my view, it has always been a very good idea, we have not in the past been able to move to the implementation stage, although we did pass an updated Arbitration Act some years ago.
“But, if the passage of the legislation that the Minister foreshadowed is accompanied by the political will to provide these support services and infrastructure, and link it properly through networking with international organisations and agencies, and connecting it with major international trade organisations in terms of writing-in Bahamas arbitration clauses to contracts, it seems to me there is a window of opportunity here.”
Mr Moree was speaking after Brent Symonette, minister of financial services, trade and industry and Immigration, revealed that an International Commercial Arbitration Bill 2018 “will be tabled shortly” in Parliament.
Mr Symonette, speaking Monday at a Miami conference on ‘Business Opportunities in the Caribbean’, said the planned legislation will facilitate commercial arbitration hearings in the Bahamas while adopting United Nations ‘model law’ known as UNCITRAL.
He revealed that the Ministry of Financial Services planned to survey arbitration services users, and practitioners, to gauge potential demand for using the Bahamas as an alternative dispute resolution (ADR) seat.
Mr Symonette added that establishing an arbitration centre in the Bahamas will boost investor confidence in this nation, given that they will have access to efficient, cost-effective dispute resolution that does not have to go through the already-clogged court system.
The Government also views its creation as a natural complement to the Bahamas’ sizeable legal profession, and cadre of existing, trained arbitrators, as well as a ‘value added’ service for the financial services and maritime industries - especially the latter’s ship registry.
Mr Moree yesterday praised the Government’s arbitration proposal as “a commendable objective”, adding that admiralty and maritime contracts, in particular, represented a potentially rich source of arbitration business if the Bahamas was named as the resolution ‘seat’.
The Bahamas’ shipping registry, the world’s sixth largest, could thus provide a significant block of business, but Mr Moree warned: “It has to be done very carefully. We can’t just pass the legislation and expect it to happen.
“I’m very supportive of the concept of developing the Bahamas as an international arbitration centre because it is an adjunct to our existing financial services industry and, given our geographic location between North and South America, we could be an attractive jurisdiction.
“It does seem to me that, at minimal cost, we could expand our business model by bolting on to our current international financial centre an arbitration centre.... There is a window of opportunity provided we are prepared to address the infrastructure which will be necessary to support the arbitration centre.”
Pointing out that “a lot of time has elapsed in talking about this subject”, Mr Moree said rival international financial centres (IFCs) had either bypassed or made considerable progress in establishing themselves as arbitration hubs, identifying the likes of Singapore, Hong Kong and Mauritius.
Citing what the Bahamas requires, the well-known QC said: “First of all, we have to address our Immigration policy. If we’re going to have an international arbitration centre, parties are going to need to be able to come into the country for the purpose of conducting arbitration without having to wait weeks and months, and going through a lot of bureaucracy.
“It has to be done in a way that allows people to come in and conduct these hearings with a minimum of red tape and delay. They will want to bring their own lawyers to conduct arbitration. While these lawyers will have to right to appear before our courts, we’d have to have a fairly liberal Immigration policy to facilitate the conduct of hearings where all parties are allowed to bring in their own attorneys and experts.
“That is going to be critical if we expect the international community to choose the Bahamas as a forum for resolving disputes.” Mr Moree added that the Bahamas would also have to permit foreigners to serve as arbitrators in these hearings, given that commercial contracts often permitted warring parties to each nominate their own arbitrators or have them selected by the likes of the International Chamber of Commerce (ICC).
The Government’s arbitration centre plans, together with the Commercial Enterprises Act, highlight why Immigration has been combined with financial services and trade and industry in Mr Symonette’s portfolio. It also suggests that Immigration is a key element of its strategy to restructure and reposition the economy.
Besides Immigration reform, Mr Moree said trained administrative and legal services support staff, plus the necessary physical and IT infrastructure, were critical to establishing the Bahamas’ credibility.
Also central to this, he added, was the forging of alliances with the likes of the London Court of International Arbitration (LCIA), the Permanent Court of Arbitration in the Hague, and other competitors and arbitration organisations as a means to set this nation’s “currency” and prove it is a ‘player’ in the industry.
Should the Bahamas succeed, Mr Moree said an arbitration centre would generate significant job creation “spin-offs”, not just for the legal industry and trained Bahamian arbitration professionals, but also for the hotel sector and related businesses.
“We have to understand this is a competitive business,” he told Tribune Business. “It’s one thing to establish your arbitration centre, but another to attract business where the international community starts to use it in significant volumes to make it viable.
“It will be good for our country and expands our base, which we absolutely have to do in the current environment. I commend the objective. It requires very robust and sustained political will at the highest level to do what is necessary to make it work.
“If that was done, and it was set up properly, it seems to me to be an opportunity to develop an alternative revenue stream for the Bahamas and provide additional services that have many synergies and economies of scale with our present business model.”