THE BAHAMAS: An Introduction to General Business Law: Dispute Resolution

Introduction 

For The Bahamas, 2023 brought with it the celebration of 50 years as a constitutional democracy and the implementation of the Supreme Court Civil Procedure Rules 2022 (the “Rules” or CPR) which came into force on 1 March 2023. An extensive Practice Guide was issued to assist both judges and legal practitioners as they familiarise themselves with the new Rules, and this Practice Guide is essentially the Bahamian version of the UK’s “White Book”.

The Rules are intended (among other things) to ensure that cases are dealt with expeditiously and fairly, and to allot to each of them an appropriate share of the court’s resources. Another initiative geared toward improving the efficiency of the judicial system was announced by the Honourable Chief Justice Sir Ian Winder, Kt at the opening of the 2023 legal year, when he stated that “as part of the CPR reforms, [the judiciary] intends to embrace court-connected mediation as a means of siphoning matters away from the formal court system. As with the criminal system, we cannot try ourselves out of these backlogs. I intend to issue a practice direction which will make this a reality. I am keenly aware of the many talented trained mediation professionals in the jurisdiction. We intend to capitalise on this and advance mediation as a meaningful means to relieve the stress upon the court system.” Many agree that the implementation of court-connected mediation will undoubtedly relieve the stress on the civil justice system, and await the implementation with eager anticipation.

Case Law Following the Implementation of the Rules 

In a recent judgment delivered by the Chief Justice, the implementation and use of the new Rules was comprehensively considered. In Andrew Smith & Sophia Smith v First Caribbean International Bank (Bahamas) Limited and Insurance Management (Bahamas) Limited (Smith v FCIB), Chief Justice Winder considered an application for relief from sanctions under Rule 26.8 and made the following observations:

• Rule 26.8 of the Rules confers upon the court a wider discretion to grant relief from sanctions than existed under its predecessor. The discretion is general and “is to be exercised having regard to all the circumstances of the particular case so as to enable the Court to deal justly with the application”.

• The court and parties to litigation must be cautious when relying on pre-CPR authorities when interpreting and applying the Rules, as the Rules were intended to be a major shift in this jurisdiction’s approach to resolving disputes.

• In transitional cases where the parties were previously operating under the Rules of the Supreme Court, the court must take this factor into consideration when assessing their conduct in the context of procedural decisions, particularly those which may lead to the imposition of a sanction.

• Rule 26.8 is modelled after Rule 3.9 of the English Civil Procedure Rules and accordingly, English cases in relation thereto are highly persuasive while the courts transition and settle the practice and procedure in relation to application for relief of sanctions.

The court employed a three-stage framework to determine whether the applicants in Smith v FCIB ought to be granted relief from sanctions in their failure to comply with an “unless order”.  

• The court identified and assessed the seriousness and significance of the “failure to comply with any rule, practice direction or court order” which engages Rule 26.8(1).

• The court considered why the default occurred, that is, the reason for the breach.

• The court considered all the circumstances of the case to enable it to deal justly with the application.

The court found that the applicants did attempt to comply with the unless order, despite attempts on the part of their counsel being inadequate. If the proceedings were dismissed, the applicants would be “driven from the seat of judgment and will have only a claim against their legal advisers”, however, if the court granted relief from sanctions, the parties would only have to prepare for trial in the usual way. The judge then weighed the circumstances and found it appropriate to exercise the court’s discretion in granting the applicants relief from sanctions.

A New Approach to Interim Injunctions? 

The recent landmark case from the Privy Council in Convoy Collateral Ltd v Broad Idea International Ltd and Cho Kwai Chee (Convoy v Broad Idea) reshaped general understanding of the approach, and the ultimate granting of standalone freezing injunctions. This case, emanating from the British Virgin Islands, confirmed that where the court has personal jurisdiction over a party, the court also has common law power to grant a standalone freezing injunction against that party to assist enforcement through the court’s processing of a foreign judgment. Convoy v Broad Idea provided the Privy Council with the opportunity to review and substantively alter the law relating to freezing injunctions, distinguishing itself from the most notable case of The Siskina (Owners of Cargo Lately Laden on Board) v Distos Copmania Naviera SA (“The Siskina”), and finding that the granting of a freezing injunction was not contingent on the existence of substantive domestic proceedings.

Convoy v Broad Ideas was considered in the Bahamian case of The Public Institution for Social Security v Fahad Maziad Rajaan Al-Rajaan, where the judge agreed that the granting of interlocutory injunctions does not require a substantive cause of action and that injunctions (whether final or interlocutory) could be granted in aid of foreign proceedings. The judge held that while the Privy Council decision of Convoy v Broad Ideas was not binding on the Bahamian Supreme Court, the judge found it highly persuasive and ultimately held that the Bahamian Court was able to grant a free-standing freezing injunction in aid of foreign proceedings, despite the absence of specific legislation to that effect. This was a departure from the traditional approach under Bahamian law, with the judge acknowledging the same and stating:

“In my judgment, the Defendant’s submission that there needs [to] be a substantive cause of action in The Bahamas for an injunction in aid of foreign proceedings to be granted is misconceived based on the recent decision of the Privy Council in Convoy Collateral. The short answer is that while Convoy Collateral may not be binding on the Bahamian Court, it is highly persuasive and, therefore, the argument that the Bahamian Court cannot grant a free-standing injunction in aid of foreign proceedings is untenable and must fail. In fact, Convoy Collateral has now settled what was the law since Meespierson (Bahamas) Ltd & Others v Grupo Torras SA and Another”; and 

“In any event, given the Privy Council decision in Convoy Collateral, I remain persuaded that this Court is able to grant a free-standing freezing injunction in aid of foreign proceedings despite the absence of specific legislation. I need not reiterate what I said earlier in this Judgment.”

As the Bahamian civil justice system continues to develop and adapt to changing times, similar deviations from notable, long-standing principles of law are expected.