We decided to share this article with readers of BAHAMAS CHRONICLE, which has a huge following among the Bahamian diaspora across the United States, Canada and the United Kingdom as well as in The Bahamas and the wider Caribbean. The Nassau Guardian published this article by Youri Kemp on Friday, March 6, 2026.
By Youri Kemp
Senior Business Reporter
youri@nasguard.com
Dr. Michael Toote, senior counsel at Michael Toote and Co., told Guardian Business yesterday that the landmark tribunal decision on the government’s $357 million dispute with the Grand Bahama Port Authority (GBPA) is noteworthy and historic.
Toote, who is a fellow of the Chartered Institute of Arbitrators (FCIArb), also said: “The recent tribunal’s decision in the dispute between the Grand Bahama Port Authority and the government of The Bahamas marks a constructive step toward resolving a long-standing conflict central to the future governance and economic development of Freeport.
“Equally significant is the parties’ willingness to submit their disagreements to arbitration and to respect the tribunal’s decision. The award illustrates the ongoing value of arbitration as a neutral, effective and efficient mechanism for resolving complex commercial and statutory conflicts in a climate where private and public disputes often escalate into unwarranted protracted legal battles.”
“Remarkably, the dispute, which arose on June 12, 2023 at the government’s demand for payment from the GBPA for public services, infrastructure, and personnel costs expended in Freeport, went to arbitration within two years, and was resolved in less than three years. This underscores the benefit of arbitration over litigation, especially considering the Baha Mar and China Construction dispute which, minimally, took more than ten years to resolve.
“The Baha Mar matter involved multiple country and court proceedings, delays, reputational damage and excessive costs; compared to the GBPA dispute, characterized by efficiency, procedural control, confidentiality, and an enforceable award, upheld by all.”
Toote also said: “The landmark decision by the arbitral tribunal of international jurists is noteworthy as it is historic. On April 4, 2024, the GBPA disputed it owed the government one dollar of the $357 million claimed. On April 7 of that same year, the government threatened arbitration if the demand was not met.
“By May 22 of 2025, the parties to the dispute agreed in principle to go to arbitration. After issuing a notice of arbitration, proceedings began September 8, 2025 at an undisclosed location to hear the claim and counterclaim. The tribunal’s award found that the government’s assertion that GBPA owes it for expenses incurred in Freeport was upheld both on the legal and factual merits.”
In a partial award issued on March 3, 2026, an independent international arbitration tribunal delivered a split decision in the long-standing dispute between the government of The Bahamas and the Grand Bahama Port Authority (GBPA). Both parties have claimed victory, though the ruling fundamentally reshapes the governance and financial framework of Freeport under the Hawksbill Creek Agreement (HCA).
The tribunal dismissed the government’s demand for an immediate $357 million lump-sum reimbursement for administrative expenses.
While the immediate payout was blocked, the tribunal confirmed the GBPA is legally liable to make annual payments to the government until the HCA expires in 2054.
The ruling also established that a 1994 agreement remains enforceable, allowing the government to invoke a review process for annual payments starting from 2023.
Additionally, the tribunal rejected seven of the GBPA’s eight counterclaims, including a demand for over $1 billion in damages for alleged government interference.
Toote also said: “Key to all of this is the 1994 amendment to the Hawksbill Agreement made between the GBPA and the government. Here, GBPA gave an undertaking to defray the government’s expenses in administering the Port Area.
“Under that arrangement, the GBPA agreed to pay $500,000 per year for five years from 1995 to 2000, after which annual payments were subject to a review between the parties to determine ongoing financial obligations.
“The tribunal decided that the annual payment mechanism is actionable and, in effect, enforceable. It constitutes an ongoing contract entitling the government to recover costs today and onwards without obligation to rely solely on the provisions of the 1955 Hawksbill Agreement.”