Summary

IN THE MATTER OF AN ARBITRATION
UNDER THE BAHAMAS ARBITRATION ACT 2009
SUBJECT TO THE ARBITRATION RULES OF UNCITRAL 2021

Tribunal
Sir Anthony Smellie KCMG KC (Presiding Arbitrator)
Lord Neuberger of Abbotsbury (Co-Arbitrator)
Dame Elizabeth Gloster DBE (Co-Arbitrator)

Introduction
Procedural formalities
Jurisdiction
The Parties and their representatives
The initial procedure in the Arbitration
The progress of the Arbitration
The uncontroversial factual background
The Original HCA
The 1960 Agreement
Events in 1965
The 1966 Agreement
The "1968 Agreement"
Subsequent corporate changes
The Bahamas achieves independence
Events between 1990 and 2003
Events in 2015 and 2016
Events since 2016
Other legislative changes
The Government's Claim: Introductory
The Government's Claim: (1) Could the Government be paid under clause 1(5)(d) for all five years 2018-22?
The Government's Claim: (3) Should the PwC Report have been signed by the Treasurer?
The Government's Claim: (4) Was the PwC Report a "detailed account" within clause 1(5)(d)?
The Government's Claim: (5) Has clause 1(5)(d) been replaced by paragraph 3?
The Government's Claim: (6) Has clause 1(5)(d) been revived?
The Government's Claim: (7) Can the Government claim any sums under clause 1(5)(d) or paragraph 3?
The Government's Claim: (8) Can the review provisions in paragraph 3 be implemented, and if so, how?
The GBPA's Counterclaim: Introductory
The GBPA's Counterclaim: (1) Licensing
The GBPA's case on its licensing counterclaim
The Government's response on the licensing counterclaim
The Tribunal's decision on the licensing counterclaim: the contractual position
The Tribunal's decision on the licensing counterclaim: waiver and estoppel
The GBPA's Counterclaim: (2) Immigration
The GBPA's case on its immigration counterclaim
The Government's response on the immigration counterclaim
The Tribunal's decision on the immigration counterclaim
The GBPA's Counterclaim: (3) Customs duty exemptions
The GBPA's case on its customs duty exemptions counterclaim
The Government's response on the customs duty exemptions counterclaim
The Tribunal's decision on the customs duty exemptions counterclaim
The GBPA's Counterclaim: (4) Utilities
The GBPA's case on its utilities counterclaim
The GBPA's case on utilities: electricity
The GBPA's case on utilities: telephony, internet and cable systems
The Government's response on the utilities counterclaim
The GBPA's case on utilities: the constitutional argument: the Government's case
The GBPA's case on utilities: the constitutional argument: the GBPA's case
The Tribunal's decision on the utilities counterclaim
The GBPA's Counterclaim: (5) Land purchases
The GBPA's case on its land purchases counterclaim
The Government's response on the land purchases counterclaim
The Tribunal's decision on the land purchases counterclaim
The GBPA's Counterclaim: (6) land development/environmental approval
The GBPA's case on its land development /environmental approval counterclaim
The Government's response on the land development /environmental approval counterclaim
The Tribunal's decision on the land development /environmental approval counterclaim
The GBPA's Counterclaim: (7) environmental bye-laws
The GBPA's case on its environmental bye-laws counterclaim
The Government's response on the environmental bye-laws counterclaim
The Tribunal's decision on the environmental bye-laws counterclaim
The GBPA's Counterclaim: (8) diversion and frustration of investment projects
The GBPA's case on its diversion and frustration of investment projects counterclaim
The Government's response on the diversion and frustration of investment projects counterclaim
The Tribunal's decision on the diversion and frustration of investment projects counterclaim
The GBPA's counterclaims: the relief to be granted
Conclusion

Introduction

1. This arbitration ("Arbitration") arises out of a dispute between the Government of the Commonwealth of The Bahamas (the "Government") and Grand Bahama Port Authority Limited (the "GBPA"), whose relationship is governed by an agreement, known as the Hawksbill Creek Agreement:

(a) which was entered into in August 1955 for a term of 99 years (the "Original HCA");

(b) under which the Government leased to the GBPA related to some 50,000 acres of Crown land surrounding and in the vicinity of, together with the seabed underlying, Hawksbill Creek on the Island of Grand Bahama (the "Leased Land");

(c) which contained various obligations on the Government and the GBPA (together the "Parties"), including obligations on the GBPA to develop the Port Area;

(d) which has been amended from time to time (and the current version is referred to herein as "the HCA"); and

(e) whose implementation has resulted in the creation and functioning of the harbour and town of Freeport.

2. The Government began this Arbitration on the grounds that: (i) it had presented a certain account (the "Account") to the GBPA, pursuant to clause 1(5)(d) of the HCA; (ii) the GBPA was accordingly liable to pay to the Government the sum of BSD 357.144m within 30 days thereafter; (iii) the GBPA had failed to pay BSD 357.144m or any other sum in respect of its liability; and (iv) the Government accordingly claims to be entitled to recover BSD 357.144m (or in the alternative some other sum) in this Arbitration.

3. By way of response, the GBPA: (i) denied that it had any liability to the Government in respect of BSD 357.144m or any other sum under clause 1(5)(d) or at all; and (ii) contended by way of counterclaim in this Arbitration that it is entitled to damages and/or declaratory relief arising from the Government's alleged breaches of certain obligations contained in the HCA.

4. The issues raised by the Government's claim and by the GBPA's counterclaim involve points of law and questions of fact, on which the Parties each made written and oral submissions and adduced written and oral evidence during a hearing which took place over ten days beginning on 8 September 2025 (the "Hearing").

5. The members of the tribunal appointed to resolve these issues ("the Tribunal") wish to record their thanks to the Parties and their respective legal teams for the efficient, effective and constructive way in which the Arbitration was conducted.

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Conclusion

373. ACCORDINGLY, THE TRIBUNAL ORDERS AND AWARDS:

(a) The Government's claim against the GBPA is dismissed;

(b) The GBPA's counterclaim against the Government succeeds, but only to the extent of its counterclaim in respect of delays in approving bye-laws, as to which:

i. the parties should make submissions as to damages;

ii. the GBPA is entitled to the following declaration:

That the Government is in breach of Clause 13 of the 1966 Agreement by continuing to fail to take the necessary steps to effect the promulgation of the environmental bye-laws for the Port Area first proposed by the GBPA in December 2006.

(c) The parties should try and agree in identifying the outstanding issues (including damages and costs), and a procedure, including a timetable, for determining those issues, and should report back to the Tribunal by 6 March 2026, indicating what they have agreed, and what, if anything, they have been unable to agree.

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