NASSAU, BAHAMAS- Prime Minister Philip Davis says the Grand Bahama Port Authority “has to pay up” after an independent arbitration tribunal confirmed the company has an enforceable obligation to make annual payments to the Government of The Bahamas through 2054 under the Hawksbill Creek Agreement.
Addressing the House of Assembly on Wednesday, the Prime Minister described the ruling as a decisive turning point in the long-running dispute over governance, regulatory authority and financial obligations in Freeport.
“The ruling is a game-changer,” Davis declared. “The Port Authority has significant liabilities that are now enforceable because we took action.”
He said the “initial ruling was a victory for us, because it established liability for them. They have to pay up.”
The arbitration stems from the Government’s claim that GBPA owes substantial sums to the public treasury under the Hawksbill Creek Agreement, which governs the Port Area in Freeport.
While the Tribunal did not award the specific $357 million sought under the original clause relied upon by the Government, it found that a 1994 agreement — executed during a previous administration — replaced that clause with a revised annual payment mechanism. Under that revised framework, GBPA is required to pay an annual sum to the Government, subject to contractual review.
“The Tribunal held that this review mechanism remains operative and enforceable,” Davis said. “It described it as self-evident that the Government can invoke this review for future years and confirmed that it remains fully enforceable.”
He told Parliament that the next phase of proceedings will determine how much is owed.
“Next, we move to a new phase of arbitration, where we determine how much,” he said. “It could be more than the $357 million in our initial claim – or it could be less.”
The Prime Minister added that the Tribunal confirmed it is “able and prepared” to determine sums owed for earlier years once the matter is put before it — a step the Government intends to take.
“The effect of the award is that liability has been established. What remains is the assessment of that liability,” Davis said.
Beyond the financial question, the ruling also addressed sweeping counterclaims brought by GBPA, which sought declarations asserting near-total regulatory control within the Port Area and damages of up to $1 billion. Davis said those efforts were comprehensively rejected.
“On business licensing, rejected. On immigration, rejected. On customs, rejected. On utilities, rejected. On foreign land purchases, rejected. On environmental approvals, rejected. On the alleged diversion of investment by the Government from the port area, rejected.”
The Tribunal, he noted, also found that the Government’s caution regarding the Weller and Pegasus project “could not be criticised” and confirmed that the Government was entitled to prefer investment projects outside Freeport within Grand Bahama.
“Seven substantial counterclaims and seven rejections,” Davis said.
Only one narrow issue succeeded — a finding that successive governments did not move with sufficient speed on proposed environmental bye-laws. Even there, Davis said, the Tribunal indicated it “could not immediately see a basis for assessing the damages that might flow.”
“The GBPA entered this arbitration demanding a billion dollars and near total authority over Freeport. They left with a limited finding on bye-laws. The ruling speaks for itself.”
Davis framed the outcome not only as a financial matter but as a constitutional and governance milestone for Freeport and Grand Bahama.
“For years, the Port Authority maintained that it had no liability to central government and that successive governments had no rightful place in decisions about licensing, immigration, customs, utilities, land purchases, and development approvals in the Port Area,” he said.
“Today, an independent tribunal of eminent international jurists has confirmed that a binding payment obligation exists until 2054, that the review provisions remain fully enforceable, and that Freeport remains subject to Bahamian law and the authority of this Parliament.”
He described the moment as historic, noting that no previous administration had taken the dispute to arbitration or secured a binding ruling on liability and governance authority.
“No previous administration ever secured a binding, independent ruling that both establishes liability to the Bahamian taxpayer and rejects the notion of a private city beyond the proper reach of our laws,” Davis said. “That is why this moment is historic.”
The Prime Minister outlined that the Government will invoke the review mechanism for future annual payments, ask the Tribunal to determine sums owed for earlier years, and move to regularise and approve environmental bye-laws.
“Our objective is simple,” he said. “A Grand Bahama where infrastructure works, where services meet modern standards, where investors have certainty, and where the people of Grand Bahama share fully in the opportunities created on their island.”
He added: “Freeport is not the private estate of any family. It is the home of Bahamians who have the right to determine their own future, through the laws and institutions of this Commonwealth.”
