NASSAU, BAHAMAS — The Grand Bahama Port Authority (GBPA) has told licensees that a recent arbitration ruling with the Government of The Bahamas “did not fundamentally alter the status quo” in Freeport, while also dismissing in full a $357 million claim brought against the authority.
In a letter dated March 9, GBPA told license holders that the international tribunal rejected the government’s claim that the Port Authority owed $357 million in reimbursements under the Hawksbill Creek Agreement.
“The Tribunal rejected in full the Government’s claim that GBPA owed $357 million in reimbursements,” the authority wrote. “As matters stand today, no payment is owed by GBPA to the Government as a result of that claim.”
According to the Port Authority, the ruling leaves the governing framework for the Port Area largely intact and reaffirmed GBPA’s longstanding position under the Hawksbill Creek Agreement.
The GBPA noted that the tribunal determined that the government’s claim under Clause 1.5 of the agreement was dismissed entirely and that none of the $357 million sought is payable by GBPA. It also ruled that claims under that clause cannot be pursued again in the future, effectively removing the reimbursement clause as a basis for future claims.
The GBPA also noted that tribunal reviewed the 1994 Agreement referenced in the case and determined that it applies, but did not find that any sums are presently due or that any liability currently exists.
The GBPA said the ruling acknowledged arguments it advanced regarding the economic contribution of the Port Area, noting that licensees, businesses and residents generate more than $200 million annually in taxes, fees and other revenues for the national treasury.
The Port Authority also revealed that it brought a successful counterclaim in the arbitration, with damages payable by the government now under consideration by the tribunal. The decision was described as “partial” because the tribunal must still determine damages and the allocation of costs.
The dispute stems from a long-running disagreement between the government and the Port Authority over financial obligations and regulatory authority tied to the Hawksbill Creek Agreement, the legal framework that governs the Freeport Port Area on Grand Bahama.
In recent remarks in Parliament, Philip Davis, Prime Minister of The Bahamas, said the arbitration confirmed the Port Authority has an enforceable obligation to make annual payments to the government through 2054 under the agreement, declaring that the company “has to pay up.”
However, GBPA told licensees the tribunal did not establish that any money is currently owed and said the existing framework governing Freeport remains in place.
“GBPA has never sought to challenge the sovereignty of The Bahamas and does not participate in the political process,” the authority said. “Throughout its history, it has regarded the Government of The Bahamas as an important partner in the governance and success of Freeport.”
The authority added that its focus remains on supporting investment and economic activity in Freeport and across Grand Bahama, while working with stakeholders to strengthen the island’s economy.
“Throughout this process, GBPA has remained focused on supporting investment,
development, and economic activity in Freeport and across Grand Bahama. The continued
success of the city depends on constructive collaboration among all stakeholders, and
GBPA remains committed to working with the Government of The Bahamas to support the
growth and success of Freeport,” the GBPA noted.
It added: “Our priority has been to preserve the stability and integrity of the Freeport framework and to provide certainty for licensees and investors. The Tribunal’s decision allows us to move forward with that stability intact and with a continued focus on strengthening the Grand Bahama economy and expanding opportunities for licensees.”
