December 2018

Landmark decision delivered by The Bahamas Supreme Court

Brian Simms QC with Marco Turnquest successfully appeared in a landmark decision delivered by The Bahamas Supreme Court on the arbitration amendment of Section 91A of the Trustee Amendment Act, 2011

On 27 November 2018, in the Matter of the W, S and SP Trust between MV (“the Plaintiff”), and DS (“the First Defendant”) and GV (“the Second Defendant”), the Honourable Mr. Justice Ian Winder delivered a landmark decision in which he set aside an injunction and stayed proceedings concerning a Bahamian Trust where proceedings were commenced by the Plaintiff in the Supreme Court of The Bahamas before initiating arbitration proceedings.

Brian Simms, QC appeared with Marco Turnquest on behalf of the First Defendant, and sought inter alia an order staying the proceedings.

In arriving at his decision, Winder J focused on three determinative issues:

  • First, whether the Supreme Court of The Bahamas has jurisdiction to hear the Plaintiff’s claims by virtue of section 79A of the Trustee Act (as amended);
  • Second, whether the Supreme Court proceedings ought to be stayed and the matter proceed to arbitration; and
  • Third, whether the terms of the Trust provided an exclusive jurisdiction clause in favor of New Zealand, and therefore the action ought to be stayed.

In relation to the first issue, Winder J held that the governing law of the Trust was Bahamian Law and the Bahamian Court had jurisdiction to hear the dispute in accordance with Section 79A of the Trustee Act (as amended).

In relation to the second issue, the learned Judge held that the arbitration provisions contained in the Trust Deed should be given effect and the matter ought to proceed to arbitration in accordance with Section 91A (2) of the Trustee Act (as amended), which reads:

Where a written trust instrument provides that any dispute or administration question arising between any of the parties in relation to the trust shall be submitted to arbitration (“a trust arbitration”), that provision shall, for all purposes under the Arbitration Act, have effect as between those parties as if it were an arbitration agreement and as if those parties were parties to that agreement.

Lastly, in relation to the third issue, Winder J held that the Trust Deed contained an exclusive jurisdiction clause which required that any claim which was not subject to arbitration ought to be litigated in New Zealand.

In his ruling, Winder J asserted that Courts in The Bahamas are expected to give effect to arbitration clauses found in trust instruments. It was therefore ordered that the injunction be set aside, and that the action be stayed pursuant to Section 9 of the Arbitration Act, 2009, whilst the matter proceeds to arbitration.

This is the first ruling delivered in The Bahamas Supreme Court which deals with the arbitration amendment of Section 91A of the Trustee Amendment Act, 2011.

Brian Simms, QC and Marco Turnquest, for the First Defendant (DS)
Stephen Smith QC, Wynsome Carey for the Second Defendant (GV)
Fenner Moran QC, Leif Farquharson and Michaela Ellis for the Plaintiff (MV)