BAHAMAS Trends and Developments Contributed by: John F. Wilson KC, Theominique D. Nottage and Adrienne N. Bellot, McKinney, Bancroft & Hughes
Besides the emphasis on the pro-arbitration position of Bahamian courts, the judgment con- firmed that the Bahamian Parliament’s intention was not to exclude settlor disputes from the trust arbitration regime. The applicant challenged the arbitrability of trust disputes other than those between trustees, beneficiaries or power hold- ers in their capacities, contending that they were not arbitrable under Section 91 of the Trustee (Amendment) Act 2011. Klein J. rejected this argument, stating that it did not follow from the absence of express reference to settlor disputes that such claims were not arbitrable. He stated that “Parliament intended to create a regime that was permissive and supportive of the arbitration of trust disputes.” The court also considered its power under Sec- tion 91 of the Act to grant leave to appeal errors of law and held that in the absence of the con- sent of the parties no appeal lies from an award on points of law. The court also rejected the sug- gestion that, notwithstanding the absence of any express power in the court under the Act to grant leave to appeal where there was no agreement between the parties, there remained a residual right appeal by a party outside the Act. The court concluded that appeals on points of law were only allowed with the express consent of the parties. While the Volpi decision did not contemplate The Arbitration (Amendment) Act 2023, the statutory trust arbitration provisions remain, for the most part, unchanged and as such it is still an instruc- tive ruling for the application and interpretation of The Bahamas’ trust arbitration legislation, as well as the Act. Following the Volpi decision, The Bahamas is seeing an increasing number of enquiries to the jurisdiction seeking to set up offshore trusts and
it is now somewhat common practice for trust deeds to now include as a standard provision, a clause allowing for any disputes to be resolved via the mechanism of arbitration. The judgment of Klein J. has brought much certainty to this arena and, in particular, the primacy which the judge paid to the limited court intervention prin- ciple in the arbitral process has garnered much positive legal review. Moving forward, The Bahamas will have to continue to employ an agile and innovative approach to maintain its standing as the leading jurisdiction for trusts arbitration globally. This will require adaptability and responsiveness when legal conundrums arise vis-à-vis trust arbitration and commercial arbitration. Thus, while the Volpi decision is currently the so-called gold standard, there is still some criticism for trust arbitration among those not entirely familiar with the value of arbitration and in some instances with those all too familiar with the value proposition of arbi- tration as a viable alternative dispute resolution mechanism. As part of the 2024 edition of the London Interna- tional Disputes Week, a debate occurred among arbitration practitioners – “This House believes that Trust Arbitration is not going to succeed in resolving trusts disputes”. Certainly, the impetus of this debate was the Volpi decision and dur- ing the debate the differences between a trust and contract were highlighted (as noted above) and how those differences impact who can be bound to an agreement to arbitrate; ie, a party versus a beneficiary. Also, at issue during the debate was whether arbitration was a practical alternative to litigation to resolve trust disputes. The usual advantages of arbitration – speed, confidentiality, party autonomy and cross-border enforcement – were not necessarily considered to translate to the benefit of trust arbitration.
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