Punching Above Its Weight: Barbados As A Preferred Seat For International Arbitration

As boxing metaphors go, this oft-cited quote from the late Kofi Annan aptly describes the indomitable and tenacious spirit of Barbados. While the nation has reeled from economic shocks in the past few years, its resilience and deliberate choice of business-focused fiscal and foreign policy demonstrates that it should never be discounted or underestimated on the world stage. Indeed, as Barbados stages an economic comeback, it stands poised to capitalise on its strengths and establish itself as a contender in the increasingly competitive world of preferred seats for international arbitration.

As the number of international arbitration centres across the globe steadily increases, so does the competition by various host countries seeking to attract arbitration business and, in so doing, diversify their economies. In that regard, Barbados is no different. In fact, the economic imperative has become even more pressing and obvious for the island in recent times, as revenue from tourist travel (the island’s main economic driver) was abruptly slashed due to travel restrictions and lockdowns arising from the worldwide spread of the novel coronavirus (COVID-19). Like its probable counterparts, it faces the challenge posed by the enduring popularity of European and Asian seats such as London, Paris, Singapore, Hong Kong and Geneva.[i] Currently, preferences for a given seat continue to be primarily determined by the seat’s “general reputation and recognition”, users’ perception of its “formal legal infrastructure”, the “neutrality and impartiality of its legal system”, the “national arbitration law”, and the seat’s “track record in enforcing agreements to arbitrate and arbitral awards”.[ii] When one applies these to Barbados, it is clear that this tiny nation manages, apparently against all odds, to check these boxes in major ways.

• Neutrality And Impartiality Of The Legal System

Barbados is a politically neutral country. When Barbados was admitted to the membership of the United Nations (UN) in December 1966, the island’s then Prime Minister, the late Errol Walton Barrow, famously declared to the General Assembly that, “We are friends of all and satellites of none”, in reference to Barbados’ nascent foreign policy. That promise has been upheld by successive governments. Barbados maintains this independent foreign policy by asserting a pro-business investment policy and developing an impressive network of bilateral relationships.

Moreover, Barbados is host to an impressive cadre of regional and international organisations and diplomatic missions, serving both Barbados and jurisdictions across the entire Eastern Caribbean. These include offices of the United Nations representing the United Nations Development Fund (UNDP), the United Nations Children’s Fund (UNICEF), the United Nations Development Fund for Women (UNIFEM), the Food and Agriculture Organisation (FAO), the International Telecommunications Union (ITU), and the United Nations Environment Programme (UNEP). Other international organisations with operations in Barbados include the Organisation of American States (OAS), the Pan American Health Organisation (PAHO), the World Health Organisation (WHO), the Inter-American Development Bank (IDB), the Caribbean Export Development Agency (CEDA), the Caribbean Office of Trade Negotiations (OTN), and the Caribbean Development Bank.

• Barbados’ well-crafted legal infrastructure includes accession to the New York Convention and adoption of the UNCITRAL Model Arbitration Law

An attractive feature of Barbados’ legislative regime is its decades-long endorsement of a party’s right to enforce its international arbitration award easily. In 1993, Barbados acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and incorporated it into domestic law, thereby providing international parties with greater certainty of enforcement of foreign arbitral awards.

Further, Barbados has enacted dedicated legislation for international arbitration, separate from the national law governing domestic arbitration. The principal legislation applicable to international arbitration is the International Commercial Arbitration Act, 2007 (International Arbitration Act), by which Barbados has adopted the UNCITRAL Model Law,[iii] which is the accepted international legislative standard for modern arbitration law. By espousing the Model Law, Barbados’ regime strongly supports global harmonisation and modernisation of national law which, consequently, affords users a level of predictability and uniformity of outcomes.

For the purposes of the International Arbitration Act, section 3(2)(b) stipulates that arbitration is “international” where any of the following apply:

• At the time the arbitration agreement was concluded, the parties to the agreement had their places of business in different states.
• The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.
• One of the following places is situated outside the state in which the parties have their place of business:
  • (i) the place of arbitration under the arbitration agreement; or
  • (ii) any place where a substantial part of the obligations of the commercial relationship are to be performed, or any place with which the subject matter of the dispute is most closely connected.

Notably, where the International Arbitration Act permits certain limited questions arising out of arbitration proceedings to be determined by a Barbados Court, the Act confers original jurisdiction on the Court of Appeal to decide all save one of those questions. These include deliberating on the parties’ ability to challenge an arbitrator’s appointment,[iv] the termination of an arbitrator’s mandate if he is unable to perform his functions or for other reasons fails to act without undue delay,[v] to challenge a tribunal’s positive ruling on the question of its jurisdiction[vi] and lastly, applications to set aside awards.[vii]

Thus, by design, Barbados has committed the resources of its superior court to deal expeditiously with nearly all international arbitration-related matters. In so doing, as a practical issue, those matters avoid potential entanglement in the volume of cases before the High Court.

The legal system is based on English common law, presided over by an independent judiciary.

• Barbados Courts have built a solid reputation for being arbitration-friendly

Complementing the legislative regime is the Barbados Courts’ demonstrated non-interventionist stance towards, and express robust support for, both domestic and international arbitration. In Needham’s Point Holdings Ltd. v. Johnston International Ltd[viii] (concerning a domestic arbitration), the Court of Appeal approved the following dicta of the English court in Copee-Lavalin v. Ken-Ren Chemicals and Fertilisers Ltd: “arbitration is a consensual process…national courts should within very broad limits recognise and give effect to any agreement between the parties…as to the way in which the arbitration should be conducted”.[ix]

In the international arbitration context, the Court of Appeal in Auto-Guadeloupe Investissement SA v. Columbus Acquisitions Inc and Others,[x] refused to grant a stay of an international arbitration seated in Barbados, observing that its powers under the International Arbitration Act were exhaustive and that the courts have a circumscribed role in relation to all arbitration proceedings.[xi]

Support for arbitration has also been expressed by Barbados’ highest appellate court, the Caribbean Court of Justice.[xii]

The judicial attitude towards arbitration matters. The legal system in Barbados is based on English common law, which is established by judicial precedent. Contracting parties and their legal representatives may therefore be guided by the well-defined and predictable legal framework established under Barbados law and tested by its courts.

• Barbados provides a valuable supportive ecosystem overall for ad hoc and institutional arbitration proceedings

Aside from political neutrality, stability, and legal framework, the island’s existing mature tourism and international business services infrastructure naturally lends itself to smoothly transition into providing international arbitration services. Barbados is a well-known and utilised air hub for the region, featuring daily flight services to and from major cities like New York and London (to name a few). Along with quality hotel and business travel accommodation on par with some of the best in the world, the island features state of the art meeting and conference facilities, as well as trained service providers (secretarial services, transcriptionists, and IT specialists) which provide value for the cost of any international arbitration. Barbados has been home to proceedings under arbitration rules used worldwide, for example, the UNCITRAL Arbitration Rules and the rules of the American Arbitration Association’s International Center for Dispute Resolution (ICDR).[xiii]

One overlooked advantage is the overall mental health value of participating in high intensity arbitration proceedings in Barbados. Dispute resolution can be quite taxing on all parties; arbitration proceedings require sustained focus and endurance by parties, counsel, and arbitrators alike. Having participated in arbitrations in London and Geneva, for example, I have a unique perspective on how a rejuvenating environment (provided by even a brief exposure to Barbados’ beautiful beaches, fresh, warm sea air and vibrant colour)  can help all involved to constructively engage with an adversarial process and manage the proceedings and their performance in a healthy, positive way. Londoners emerging from office buildings to partake in rare natural sunshine and the change in mood it evokes in the city will know exactly what I mean!

As the world rebuilds from the economic impact of COVID-19, arbitration users will likely focus sharply on the overall value of an international arbitration seat. Barbados has been tested and proven, in all areas, to be asset to users of international arbitration. Arguably, it stands a very good chance of taking advantage of its existing assets and skills to emerge as a leading arbitration centre.

Footnotes:

[i] The 2018 International Arbitration Survey: ‘The Evolution of International Arbitration’ by Queen Mary University and White & Case (http://www.arbitration.qmul.ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey---The-Evolution-of-International-Arbitration-(2).PDF).

[ii] The 2018 International Arbitration Survey: ‘The Evolution of International Arbitration’ by Queen Mary University and White & Case (http://www.arbitration.qmul.ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey---The-Evolution-of-International-Arbitration-(2).PDF).

[iii] The Model Law was adopted, together with its 2006 amendments and with limited exceptions, namely, those made to Article 7 (Definition and form of arbitration agreement) and Article 35(2) (Recognition and Enforcement).

[iv] Section 16(4), International Arbitration Act.

[v] Section 17, International Arbitration Act.

[vi] Section 19(8), International Arbitration Act.

[vii] Section 47(2), International Arbitration Act.

[viii] BB 2005 CA 21.

[ix] [1994] 2 All ER 499, 458.

[x] [2012] 84 WIR 40, [13].

[xi] The Court considered its limited role in light of section 8 of the International Arbitration Act, which provides that in matters governed by the Act, “no court shall intervene except where so provided” in the Act and is the equivalent of Article 5 of the UNCITRAL Model Law.

[xii] Byron, Sir Dennis, CiARB Keynote Address - Arbitration, Mediation and the Courts – Perspectives on the Relationship, International Commercial Arbitration, Conference, Roraima Duke Lodge Hotel, Georgetown, Guyana, 25 April 2018, https://ccj.org/wp-content/uploads/2018/05/CiARB-Keynote-Address-Arbitration-Mediation-and-the-Courts-–-Perspectives-on-the-Relationship.pdf, accessed May 26, 2020.

[xiii] Needham's Point Holdings Ltd v Johnson International Ltd BB 2005 HC 12 (UNCITRAL); Auto-Guadeloupe Investissement SA v. Columbus Acquisitions Inc and Others [2012] 84 WIR 40.

Tammi C. Pilgrim
Tammi C. Pilgrim is an arbitration and dispute resolution specialist, and the lead partner for arbitration at Lex Caribbean. She is admitted to practice in Barbados, St. Lucia, New York and St. Kitts and Nevis and holds and LL.M in International Legal Studies (with Distinction) from the Georgetown University Law Center, Washington D.C. Her practice focuses on arbitration (domestic and international), as well as commercial litigation in contract disputes, shareholders’ and investment disputes, construction disputes, insurance and restructuring matters, finance disputes, and cross-border relief/assistance matters. She has participated in investment treaty and commercial arbitration proceedings under the ICSID, ICC, LCIA and LMAA arbitration rules. Tammi also advises in commercial mediation matters, including those conducted under the Court-annexed Mediation Rules of the Barbados Supreme Court. She recently spearheaded the first virtual Court-annexed mediation in Barbados, ending almost a decade of litigation.