Foreign Arbitral Awards: No Prior Enforcement Needed For Reliance In Insolvency Proceedings

The Bahamas Supreme Court gave an important judgement regarding the efficacy of foreign arbitral awards for being relied upon as the basis of a statutory demand to evidence insolvency of the debtor in the liquidation case of In the Matter of BHP International Markets Limited 2016/COM/bnk/0038. The Court held that prior enforcement of the foreign award under the Arbitration (Foreign Arbitral Awards) Act, 2009 was not necessary and it dismissed opposition to the statutory demand.

Background

BHP International Markets Limited ("Company") was an International Business Company incorporated in The Bahamas. Wason Holding Limited ("Petitioner") was a creditor that had obtained a foreign arbitral award against the Company following an arbitration conducted in Hong Kong pursuant to the UNICITRAL Arbitration Rules. The Petitioner served the Company with a statutory demand based upon the foreign arbitral award. No prior enforcement was obtained under the Bahamian arbitration