The Canadian developer of the Graeme Hall Nature Sanctuary who lodged a claim for US$26 million against the Government of Barbados before an international tribunal, has lost the case, the commercial arbitration news provider Global Arbitration Review (GAR) has reported.
When the investment treaty claim brought by Peter Allard was concluded before the United Nations Commission on International Trade Law (UNCITRAL) in the Dutch capital of The Hague on June 27, Allard was ordered to pay US$3.1 million in costs.
Allard had argued that local authorities had failed to take environmental measures to protect the Christ Church nature sanctuary which he acquired, developed and marketed as a major tourist attraction until its closure in 2009. The outcome of the case was published yesterday.
The tribunal, chaired by Australian Queen’s Counsel Gavan Griffith, ruled that Barbados had “prevailed on all merits issues”. Other members of the tribunal were academics Michael Reisman of the United States and Andrew Newcombe of Canada.
Allard acquired the Graeme Hall swamp for use as a mangrove forest and migratory bird sanctuary in the 1990s, along with related eco-tourist infrastructure, for a total alleged cost of nearly US$26 million.
The sanctuary opened to the public in 2004 but Allard closed it down five years later, alleging that environmental degradation had left it as “little more than a mosquito-infested swamp”.
Allard filed for arbitration in 2010, alleging breaches of the 1996 Barbados-Canada bilateral investment treaty. He claimed at the time that Barbados had failed to provide fair and equitable treatment by re-zoning the land around the sanctuary for development.
He also argued that Barbados had breached the treaty’s full protection and security provision by failing to prevent the discharge of raw sewage into the wetlands and neglecting drainage systems that regulated the health of the wetlands.
The tribunal accepted jurisdiction over Allard’s claim in June 2014, rejecting Barbados’ objections that the sanctuary did not qualify as an “investment” for treaty purposes and that Allard did not own the sanctuary in accordance with the laws of Barbados. Bridgetown had also argued that the claim fell outside a three-year limitation period under the treaty.
According to GAR, the tribunal, in its final award, found that Barbados had not breached any of its treaty obligations. The UN body also found that Allard had decided to create a nature reserve as early as 1994 and had continued with the project “irrespective, and not in reliance upon” any representations by Barbados.
While Allard had a “visionary disposition” in respect of the project, the tribunal said that “when things go wrong, good intentions do not directly translate” to establishing state responsibility under the bilateral investment treaty between Bridgetown and Ottawa.
The tribunal also found that Barbados had taken appropriate and sufficient measures to protect the nature sanctuary, including conducting research and seeking to balance competing needs.
Considering scientific evidence, the tribunal found that Allard had failed to establish any environmental degradation at the site between his initial investment in 1996 and the closure of the sanctuary in 2009, nor any causal link between the state’s environmental management of the site and the alleged impact on the mangroves and the habitat of certain species of fish, birds and crabs.
Allard was represented by Canadian firm McMillan, with the team including Toronto-based partner Robert Wisner. Barbados was represented by a Volterra Fietta team headed by partner Robert Volterra in London.
GAR quoted Volterra as saying that the outcome of the case represented a “significant” win for his client. “The investor had made unwarranted and unsubstantiated accusations against [the] Barbadian governments and government officials . . . ,” he said.
When contacted Attorney General Adriel Brathwaite promised to comment on the decision at a later date.