The Government has suffered a comprehensive legal defeat after its $357m claim against the Grand Bahama Port Authority (GBPA) was dismissed in its entirety.

The three-strong arbitration panel also found it was in breach of the Hawksbill Creek Agreement, Freeport’s founding treaty, by failing “to take the necessary steps” to effect environmental bye-laws for the city that were first proposed by the GBPA some 20 years ago.

The arbitrators, Anthony Smellie, ex-chief justice of the Cayman Islands, plus Lord Neuberger and Dame Elizabeth Gloster, found the GBPA had succeeded on this aspect of its counterclaim and have invited both the Government and Freeport’s quasi-governmental authority to make submissions on the amount of damages the latter should be paid.

In a statement released today, the GBPA described the outcome as a landmark ruling for Freeport and Grand Bahama.

"This is more than a legal victory. It is a stabilizing moment for Freeport," the GBPA statement read. 

"We trust the ruling will give licensees, investors, stakeholders and Grand Bahama residents renewed assurance and optimism for the future. We have advised the government repeatedly since June 2016 that this claim was wrong and would fail. It was not a good use of time or public resources."

The statement added: "We have always maintained that benefit for Grand Bahama would best be obtained by GBPA and government working together."

The Tribunal has instructed both sides to identify outstanding issues, including damages and costs, and to agree on a procedure and timetable for determining those matters, with a report back due in early March.