BAHAMAS Trends and Developments Contributed by: Theominique D. Nottage, McKinney, Bancroft & Hughes
that, in The Bahamas, arbitration can be used for more than just purely commercial disputes. Secondly, the arbitral tribunal was prepared to dismiss a nine-figure sovereign claim in full, underscoring the fact that arbi - trators seated in The Bahamas apply ordinary eviden - tiary rigour regardless of who the claimant is, even if it is the national government. Thirdly, the arbitration is a reminder that a “partial” award is exactly that; clients and counsel alike should be cautious about declar - ing victory or defeat before quantum and costs are finally resolved. More fundamentally, this arbitration demonstrates that The Bahamas possesses some - thing many offshore jurisdictions do not – an arbitra - tion framework capable of resolving disputes involving sovereign actors without compromising procedural independence. Trust arbitration comes of age: the Volpi litigation If the dispute between the GoB and the GBPA dem - onstrates arbitration’s reach into public law, the long- running Volpi litigation demonstrates its maturity in the context of the private trust, a specialist area in which The Bahamas has invested heavily in building a distinctive offering. At the heart of the Volpi litigation is a dispute concerning three family trusts settled by Italian-Nigerian businessman Gabriele Volpi between 2006 and 2012. These family trusts, which were dis - cretionary trusts, held assets worth billions of dollars, including interests in African oil and gas ventures as well as European football clubs. Following a break - down in family relations, the trustee, Delanson Ser - vices Limited, distributed the trust assets to Gabriele personally in 2016. This decision was later challenged by his son (and one of the beneficiaries of the said family trusts) in an arbitration under the UNCITRAL Arbitration Rules and seated in The Bahamas. In 2020, the arbitral tribunal found that the distri - butions made to Gabriele by the trustee had been made in breach of trust and for an improper purpose. Accordingly, those distributions were set aside. Sub - sequently, Gabriele then mounted what has been described as a “root and branch” challenge to that award before the Supreme Court of The Bahamas, resulting in the decision of Klein J in Gabriele Volpi v Delanson Services Limited et al , Ruling dated 28 December 2023 (the “Volpi case”). This case, which is the first case in which a Bahamian court had been
asked to review a trust arbitration award on its mer- its, is a seminal ruling in arbitration-related jurispru - dence. Klein J not only conducted a rigorous analysis of the legislative framework underpinning arbitration in The Bahamas, but the learned Judge also dismissed every ground of challenge (by Gabriele), holding that the Arbitration Act 2009 permits appeals on a point of law only where the parties have consented to that route, and that the competence-competence principle survives the Trustee (Amendment) Act 2011’s modi - fication of the separability doctrine for the arbitration of trust disputes. Of the utmost significance, the Volpi case cemented the pro-arbitration position of the Bahamian courts – “…in matters governed by this Act the court should not intervene except as provided in this Act. This rep - resents a philosophy, now firmly rooted in international commercial arbitration, that has been adopted and enacted in the 2009 Act. It represents a deliberate shift by Parliament to curtail the high degree of court control and review of the arbitration processes…to promote an approach that is pro-arbitration” (Para - graph 78). Even on appeal, the Bahamian Court of Appeal rein - forced the principle of limited court intervention, hold - ing that it had no jurisdiction to entertain a further appeal once the Supreme Court had refused leave, and rejecting an argument that the Court’s inherent supervisory jurisdiction over trusts had created some parallel route of challenge. While the Volpi litigation has continued to generate several procedural rul - ings since it first came before the courts, including a 2025 Supreme Court decision declining to stay a later phase of the arbitration despite a fresh challenge to the composition of the arbitral tribunal, the central message has not changed. Bahamian courts will scru - tinise a trust arbitration award only within the narrow bounds set by Parliament and will not allow the gen - eral equitable jurisdiction of the court over trusts to be used as a backdoor means of relitigating the merits. For settlors and trustees alike, the Volpi case is now the leading authority on how far a trust arbitration clause in a Bahamian law trust instrument will actually be enforced. It confirms that disputes over the validity of distributions, and even challenges to the trust deed
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