THE recent passage of Guyana’s modern Arbitration Act has dramatically improved the country’s appeal to foreign investors. It is also paving the way for stronger international partnerships, according to prominent businessman Komal Singh, Chief Executive Officer (CEO) of Gaico Construction and former Chairman of the Private Sector Commission (PSC).

Arbitration is a formal method of dispute resolution involving a third-party neutral who makes a binding decision. The third party neutral (the ‘arbitrator’, ‘arbiter’ or ‘arbitral tribunal’) renders the decision in the form of an ‘arbitration award’.

Speaking during a recent appearance on the Guyana Dialogue programme, Singh emphasised that the updated legislation was long overdue and has already begun to restore confidence among foreign companies seeking to do business in Guyana.

Reflecting on the challenges of attracting international business in the past, Singh recounted how Guyana’s outdated Arbitration Act once served as a major deterrent to foreign investment.

“When we were trying to form partnerships with foreign companies, they had not wanted to sign up with Guyana as the location for arbitration in the event they had any disputes,” Singh said.

“So, most of the contracts we signed prior to the new Arbitration Act, we had to use New York, United Kingdom, and other parts of the world,” he said. He noted that having to go outside of Guyana for the arbitration process not only added unnecessary costs and delays but also underscored the lack of confidence in the local legal framework at the time.

The previous arbitration legislation, Singh noted, was outdated and out of sync with international standards, leaving foreign investors wary about legal redress and contract enforcement within Guyana’s borders.

However, the enactment of the new Arbitration Act, which aligns Guyana’s legal framework with global best practices, has brought a welcome change.

“Now countries can comfortably sign contracts and use Guyana as a country where they can do arbitration because the law now meets international standards,” Singh explained.

The CEO lauded the legislation as a landmark achievement for Guyana, made possible through meaningful collaboration between the government and the local private sector.

“That was a big achievement for the Government… working with the private sector to bring that on board. We are very proud that the government was able to do that because many foreign investors had concerns where that is concerned.”

Guyana’s new Arbitration Act, passed as Act Number 6 of 2024, is designed to enhance commercial dispute resolution by establishing a modern framework for both domestic and international arbitration.

It aims to position Guyana as a hub for commercial arbitration, promote its use as an alternative to court litigation and facilitate job creation and revenue generation.

The Act is intended to help Guyana become a recognised centre for international arbitration, particularly relevant given the country’s growing oil and gas industry and increased international investment.

The Act repeals an older Arbitration Act of about 150 years, which had complicated the process of securing investment and joint ventures, especially in high-stakes sectors like oil and gas, construction, and logistics. It reflects a modernisation of Guyana’s legal infrastructure related to dispute resolution.

This new Act is the first incarnation of a model Caribbean legislation recently produced.  But most importantly, it has had the input of many arbitration experts in the United States of America, including two of the more established law firms in North America.

Attorney General and Legal Affairs Minister, Anil Nandlall, SC, has been a key figure in promoting the Act and emphasising its importance for Guyana’s economic development.

Since the passage of the new Act, the government has facilitated several workshops as part of ongoing efforts to bolster the legal expertise of Guyanese professionals in the field of international arbitration.

The government 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.

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.