–country to become hub for commercial dispute resolution, Attorney-General says

LAST Friday, Guyana’s National Assembly passed the Arbitration Bill, setting the stage for the country to become a hub for commercial dispute resolution in the Caribbean and beyond.
This landmark legislation, as highlighted by Minister of Legal Affairs and Attorney-General, Anil Nandlall, S.C., is a cornerstone in the government’s broader legislative agenda aimed at bolstering the country’s development.

But beyond its general commercial implications, this bill holds particular significance for Guyana’s burgeoning oil and gas industry and the protection of its citizens’ rights.

KEY FEATURES OF THE ARBITRATION BILL
Before delving into its impact on the oil and gas sector, it’s essential to understand the foundational elements of the new Arbitration Bill:
1. Consensual Nature: Arbitration must be agreed upon by all parties involved, highlighting the importance of arbitration clauses in contracts.
2. Freedom in Choosing Arbitrators: Parties can select their arbitrators, ensuring that disputes are handled by trusted and qualified individuals.
3. Confidentiality: Arbitration proceedings are private, protecting sensitive information from public disclosure.
4. Finality and Enforceability: Decisions made by arbitrators are binding and enforceable by the courts, providing a definitive resolution to disputes.
5. Simplified Procedures: Arbitration rules are more relaxed, compared to traditional litigation, making the process more efficient and flexible.
6. Limited Grounds for Challenge: The scope for appealing arbitration awards is narrow, ensuring swift enforcement of decisions.

IMPLICATIONS FOR GUYANA’S OIL AND GAS INDUSTRY
The discovery of significant oil reserves has catapulted Guyana into the global energy spotlight. With major international oil companies (IOCs) such as ExxonMobil operating in its waters, the potential economic benefits are enormous.

However, the complexities and stakes involved in oil and gas contracts necessitate a robust dispute resolution framework. This is where the new Arbitration Bill comes into play.
The Bill aligns with international arbitration standards, particularly those set by the United Nations Commission on International Trade Law (UNCITRAL).

This alignment makes Guyana an attractive destination for investors who seek a stable and reliable legal environment for resolving disputes. By providing a clear and modern arbitration framework, the Bill reduces the perceived risks associated with investing in Guyana’s oil and gas sector.

A significant concern has been the arbitration clauses in oil and gas contracts that typically refer disputes to foreign jurisdictions such as London, New York, or Paris.
As Minister Nandlall pointed out, if Nassau in the Bahamas can handle arbitrations involving hundreds of millions of dollars, there is no reason Guyana cannot.

The new Bill creates a framework that enables complex and high-stakes arbitrations to be conducted locally. This shift not only keeps legal proceedings and potential revenue within the country, but it also boosts confidence in Guyana’s legal infrastructure.

In the oil and gas industry, disputes can arise over various issues, from contractual obligations to environmental impacts.
The Arbitration Bill empowers Guyana to handle these disputes domestically, ensuring that decisions are made with a thorough understanding of local contexts and national interests. This capability is crucial for protecting the rights of Guyanese citizens and ensuring that the benefits of oil and gas extraction are fairly distributed.

Beyond facilitating business, the Bill is a safeguard for the rights and interests of Guyana’s citizens.

TRANSPARENCY AND ACCOUNTABILITY
While arbitration proceedings are confidential, the overall framework established by the Bill ensures transparency and accountability in how disputes are resolved. By having arbitrations conducted locally, there is greater oversight and potential public scrutiny over decisions that impact the national interest.

Nandlall explained that the proceedings are private and confidential and disclosure by the tribunal or a party shall be actionable as a breach of an obligation of confidence. However, the Court may order proceedings to be heard in open Court in certain circumstances.

CAPACITY BUILDING
The government has already embarked on training initiatives to build local capacity in arbitration.

There has been a series of training exercises for professionals and members of the judiciary and private sector. The public too has been sensitised about the role and importance of arbitration.
The Government of Guyana has already established an Arbitration Unit which includes members from the Attorney General’s Chambers, the Bar Association of Guyana, the Private Sector Commission and the Berbice Bar Association.

This Arbitration Unit liaises with the Judiciary and key stakeholders at periodic intervals, as this initiative is part of the government’s intention to create a modern infrastructure for the arbitration and conciliation of commercial disputes in Guyana.

According to Nandlall, by equipping Guyanese lawyers and professionals with the necessary skills, the country is not only fostering self-sufficiency but also creating job opportunities and retaining legal expertise within its borders.

This approach, he said, ensures that all the sectors, including oil and gas, grow, so too does the capability of local professionals to handle complex disputes.

ECONOMIC BENEFITS
According to Nandlall, establishing Guyana as an arbitration hub brings substantial economic benefits. It creates jobs, stimulates the local legal and professional services market, and generates revenue from arbitration activities conducted within the country.

This economic boost can, in turn, be reinvested into community development and public services, further enhancing the well-being of Guyanese citizens.

As such, the passage of the Arbitration Bill marks a significant milestone in Guyana’s journey towards becoming a leader in the global oil and gas industry.

By creating a “modern, flexible, and reliable arbitration framework”, the Bill not only attracts international investment, but also ensures that the rights and interests of Guyana and its citizens are robustly protected.

According to Nandlall, as the country steps onto the world stage as an oil and gas powerhouse, this legislation provides the legal foundation necessary for sustainable and equitable growth.

Since being elected to office, the People’s Progressive Party/Civic (PPP/C) government has embarked on a rigorous agenda to transform Guyana’s archaic legal sector by updating outdated legislation and crafting a modern legal architecture.