Bahamas

In The Bahamas, commercial claims are primarily dealt with by the Magistrates’ Court and the Supreme Court, depending on the value of the claim. The Chief Magistrate and a Stipendiary and Circuit Magistrate shall, in addition to any other jurisdiction conferred upon him by any act, have jurisdiction to hear and determine any civil cause or matter where the amount sought to be recovered or the value of the property in dispute does not exceed BSD 20,000.

There is no dedicated commercial court, but the Supreme Court has general unlimited jurisdiction over high-value and complex commercial disputes.

If a party is not satisfied with the outcome of its action, the party may appeal to the Court of Appeal and ultimately to the Privy Council.

The main procedural rules governing commercial litigation are the Civil Procedure Rules, 2022 (as amended) (CPR). However, the CPR do not apply to bankruptcy and insolvency proceedings, including the winding-up of companies; these are governed by the Rules of the Supreme Court as provided by the Companies Liquidation Rules.

There are no rules requiring parties to take pre-action steps before bringing a commercial claim.

In The Bahamas, the most popular method of ADR is arbitration, which is frequently used to settle large commercial disputes. Arbitration in The Bahamas is governed by the Arbitration Act, 2009 (“the Act”).

The CPR provide that the court must further the overriding objective by actively managing cases including, inter alia, encouraging the parties to use any appropriate form of ADR procedure including mediation, if the court considers it appropriate, and facilitating the use of such procedures.

The time it takes for a commercial claim to go to trial in The Bahamas can vary significantly depending on its complexity; generally, the range is from 12 to 24 months.

A party’s duty to disclose documents is limited to documents which are or have been in the control of that party.

If a party is required by any direction of the court to give standard disclosure, that party must disclose all documents which are directly relevant to the matters in question. A document is “directly relevant” if:

• the party with control of the document intends to rely on it;
• it tends to adversely affect that party’s case; or
• it tends to support another party’s case.

However, the rule of law known as “the rule in Peruvian Guano” does not apply to make a document “directly relevant”.

The court also has the discretion to order specific disclosure to compel a party to disclose documents that are directly relevant to a specific issue in the case. In determining whether to order specific disclosure, the court must satisfy itself that the order is necessary to fairly dispose of the claim or to save costs.

Unless the court orders otherwise, a party must call a witness to give evidence where that party has served a witness statement or summary and wishes to rely on the evidence of that witness. If a party has served a witness statement or summary and does not intend to call that witness at the trial, that party must give notice to that effect to the other parties not less than 28 days before trial.

If a witness is called to give evidence at trial, that witness may be cross-examined on the evidence as set out in his or her witness statement, whether or not the statement or any part of it was referred to during the witness’s evidence in chief.

Costs are entirely at the discretion of the court. The general rule is that the successful party is entitled to its costs. As such, the losing party pays the costs (the “reasonable” amount of attorney fees) of the successful party. The court may, however, make no order as to costs or, in an exceptional case, order a successful party to pay all or part of the costs of an unsuccessful party.

The court may grant the following interim remedies:

• an interim declaration;
• an interim injunction;
• an order authorising a person to enter any land or building in the possession of a party to the proceedings for the purposes of carrying out an order under rule 17.1(1)(h) of the CPR;
• an order directing a party to prepare and file accounts relating to the dispute;
• an order directing a party to provide information about the location of relevant property or assets or to provide information about relevant property or assets which are or may be the subject of an application for a freezing order;
• an order for a specified fund to be paid into court or otherwise secured where there is a dispute over a party’s right to the fund;
• an order for interim costs;
• an order for the:
  • carrying out of an experiment on or with relevant property;
  • detention, custody or preservation of relevant property;
  • inspection of relevant property;
  • payment of income from relevant property until a claim is decided;
  • sale of relevant property, including land, which is of a perishable nature or which, for any other good reason, it is desirable to sell quickly;
  • taking of a sample of relevant property;
• an order permitting a party seeking to recover personal property to pay a specified sum of money into court pending the outcome of the proceedings and directing that, if the party does so, the property must be given up to the party;
• a “freezing order”, restraining a party from:
  • dealing with any asset whether located within the jurisdiction or not;
  • removing from the jurisdiction assets located there;
• an order to deliver up goods;
• a “search order” requiring a party to admit another party to premises for the purpose, among other things, of preserving evidence; or
• an “order for interim payment” under rules 17.14 and 17.15 of the CPR for payment by a defendant on account of any damages, debt or other sum which the court may find the defendant liable to pay.

Bahamian courts have adopted a pro-arbitration approach. The CPR encourages parties to engage in arbitration and facilitate the efficient conduct of arbitral proceedings. Arbitration in The Bahamas is governed by the Act, the Arbitration (Foreign Arbitral Awards) Act, 2009 (the “FAA 2009”) and the International Commercial Arbitration Act, 2023 (the “ICA 2023”), which give full legal effect to arbitration agreements and awards.

The Act expressly limits judicial intervention, providing that the court shall not intervene in arbitration matters except as permitted under the Act. As a result, Bahamian courts exercise only limited supervisory jurisdiction and support the autonomy of the arbitral process.

The ICA 2023 incorporates the UNCITRAL Model Law on International Commercial Arbitration, and the Act is largely compliant with the Model Law.

The Arbitral Tribunal has the power to grant interim relief, either by the agreement of the parties or at the request of a party, prior to the issuance of an award. Section 57 of the Act empowers the Tribunal to make orders to maintain or restore the status quo, prevent harm or prejudice to the arbitral process, preserve assets out of which an award may be satisfied, and preserve evidence that may be relevant to the dispute.

An arbitral award may be appealed to the Supreme Court on a point of law, a challenge to the tribunal’s substantive jurisdiction, or serious irregularity affecting the tribunal, the proceedings or the award.

An appeal on a point of law requires the agreement of all other parties or otherwise the leave of the court, with notice to the other parties and to the tribunal. A party intending to appeal must first exhaust any available arbitral process of appeal or review, and any opportunity for the tribunal to correct an award or make an additional award.

The Bahamas is a party to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the “New York Convention”), which facilitates the cross-border enforcement of arbitral awards. The New York Convention is incorporated into domestic law through the FAA 2009.

In The Bahamas, local judgments and foreign judgments in commercial matters are enforceable. Under the Reciprocal Enforcement of Judgments Act, 1924 (REJA), a judgment includes an order of a court in civil proceedings and extends to an arbitral award that has become enforceable as a judgment in the country where it was made.

A foreign judgment may be enforced if it originates from a country with a reciprocal enforcement arrangement with The Bahamas or under common law if the foreign judgment is from a country not covered by the REJA. The foreign judgment must be final and conclusive.

Judgments will not be enforceable where:

• the original court acted without jurisdiction;
• the defendant was not properly served with the process of the originating court and did not appear;
• the judgment was obtained by fraud; or
• the judgment is one in which an appeal is pending or one in which a right of appeal remains or is contrary to public policy.

To register a foreign judgment or arbitral award, an application must be made within 12 months after the date of the judgment or award, unless extended by the court.

The application is commenced by fixed date claim and must be supported by an affidavit exhibiting the judgment or a certified copy of the same or, in the case of an arbitral award, the original arbitration agreement or a certified copy and a certified translation, if it is not in English.

The affidavit must also state that the applicant is entitled to enforce the judgment, that it does not fall within any excluded category, and that the award has become enforceable in the same manner as a court judgment in its country of origin.

The application and affidavit must be served on the respondent, who may oppose registration by filing and serving an affidavit within 14 days of service.

If the court orders registration, an order of registration is drawn up and served on the respondent (unless made ex parte). The applicant must also serve written notice of registration within a reasonable time thereafter.

Alternatively, a foreign judgment under the common law may be enforced by commencing an action in the Supreme Court seeking to have the foreign judgment recognised by order of the court. The foreign judgment would constitute a cause of action upon which proceedings may be commenced. The foreign judgment may only be opposed on limited grounds, namely, that the judgment is not final and conclusive, that the foreign court lacked jurisdiction, that the judgment was obtained by fraud, or is contrary to natural justice or public policy, or that the judgment debt is not definite or ascertainable.

Once a foreign judgment or arbitral award is registered in The Bahamas, it becomes enforceable as if it were a domestic judgment.

The available methods of execution, as provided in Part 43.11 of the CPR, are as follows:

• writ of fieri facias or warrant of execution;
• a third-party debt order;
• a charging order;
• enforcement of the equitable charge;
• the appointment of a receiver; and
• writ of sequestration.

In addition to the above methods of execution, a judgment debtor may issue a statutory demand or make an application to wind up a company where a judgment creditor fails to satisfy a debt.

Pending enforcement of the judgment or award, the Supreme Court has the power to grant a wide array interim measures including:

• injunction;
• search order;
• freezing order; and
• order for the preservation of property

A detailed list of interim measures is set out in Part 17 of the CPR.

Proceeding on the assumptions outlined in the Model Answer, would a court in this jurisdiction recognise and enforce the arbitral award under the New York Convention?

In particular:

• Does the award fall within the scope of Article V(1) of the Convention, or would any of the grounds in Article V(1) justify refusal on the assumed facts?
• Is the subject matter of the dispute capable of settlement by arbitration under domestic law for the purposes of Article V(2)(a)?
• Would recognition or enforcement of the award be contrary to public policy within the meaning of Article V(2)(b)?

Response

From the perspective of enforcement, Bahamian courts are reluctant to interfere with valid arbitration agreements, consistent with section 3 of the Arbitration Act. Where parties agree that disputes concerning the non-payment of the monetary element of a separate contractual obligation arising upon the non-payment of a final court judgment are to be referred exclusively to arbitration, the courts would be likely to uphold the clause as valid and enforceable, giving deference to party autonomy.

The fact that liability and quantum have already been determined by a court does not prevent the parties from contractually referring issues of non-payment, interest, or security to arbitration, provided that the arbitrator’s mandate is confined to confirming the finality of the judgment and determining whether payment has been made. The present case does not concern the enforcement of the foreign court judgment itself, but rather the enforcement of a separate contractual obligation which arises from non-payment of a judgment after the agreed contractual period.

 The arbitral tribunal would therefore be limited to determining whether a court judgment is final and binding, whether payment remains outstanding after the contractual period and whether the contractual obligation to pay the equivalent sum has arisen. Once these facts are established, the tribunal may order payment in accordance with the agreement between the parties. This does not amount to a relitigation of the underlying dispute, but rather the enforcement of a separate post-judgment contractual obligation.

There is nothing in the Act or its subsequent amendments that requires an arbitrator to revisit the merits of a dispute in order for the arbitration agreement to be valid or enforceable. The arbitrator is not exercising an appellate function but determining the consequences of non-payment as agreed by the parties. Similarly, there is nothing in the Act that excludes disputes concerning non-payment of a monetary obligation, or the obligation to provide security, from the scope of arbitration. The legislative framework proceeds on the basis that matters are arbitrable unless expressly excluded, and no such exclusion applies in this case.

Recognition and enforcement would fall to be assessed under Article V of the New York Convention, which is incorporated into section 6 of the FAA 2009.

A dispute concerning whether a contractual payment obligation has arisen is arbitrable and would not offend domestic public policy within the meaning of Article V(2)(a) or Article V(2)(b) of the New York Convention.

Accordingly, on the assumed facts, none of the refusal grounds under Article V would arise. The arbitration agreement is valid, the dispute is arbitrable, the tribunal acts within its limited mandate, and the authority of the original court judgment is not undermined as the tribunal does not revisit the merits of the case. If the arbitration were seated in The Bahamas and governed by Bahamian law, a clause of this nature would be capable of operating effectively. The Act recognises party autonomy in defining the scope of the arbitrator’s mandate.