By L. Ryan Pinder K.C. | Pinder Commercial Chambers
A family trust is intended to provide continuity. A disagreement over distributions, investment decisions or the exercise of a protector’s powers can put that purpose under strain. For families, trustees and their advisers, the method of resolving a dispute should be considered when the structure is designed, and reviewed as circumstances change.
In my discussions with the financial services industry, confidentiality and effective dispute resolution have been recurring priorities. My view is that a strong trust jurisdiction must provide a credible means of addressing disagreement while protecting legitimate family interests. The Bahamas’ 2025 reforms to arbitration and trust proceedings are important developments in that approach.
Start with the interests that need protection
The immediate issue may be a request for information or disagreement about a proposed transaction. Behind it may lie different expectations between generations, concerns about impartiality or uncertainty over who has authority to act. The legal response should identify the rights at issue and the people affected before choosing a procedure.
For a trustee, that includes maintaining proper administration while the dispute is addressed. For a beneficiary, it may involve securing information and an effective opportunity to be heard. A protector or other power holder may need clarity about the scope and proper exercise of a particular power. Privacy is valuable, but the process must also deliver a fair and enforceable outcome.
Trust arbitration now has a more explicit statutory foundation
The Arbitration (Amendment) Act, 2025 gives effect to written trust terms requiring disputes between parties in relation to the trust to be submitted to arbitration as if those terms were an arbitration agreement between them. The defined parties extend beyond the trustee and include settlors, beneficiaries and power holders, with specified former and purported office holders also addressed. [1]
This matters because a trust’s participants do not necessarily sign a conventional commercial arbitration agreement. The legislation addresses that feature of trusts. Whether a particular issue falls within the arbitration provision still requires analysis of the trust terms, the statutory framework and the parties involved.
The drafting should reflect the family and the trust
An arbitration clause should be tailored to the arrangement. It should address the scope of disputes, the seat and procedure, the appointment and expertise of the tribunal, and how urgent applications will be handled. The family and its advisers should also consider reasoned decisions, costs, participation and the intended relationship with the courts.
An existing trust requires particular care. Adding or revising an arbitration clause calls for a review of the power to amend, any required consents and the effect on beneficiaries. A provision that works for a newly settled trust cannot simply be assumed suitable for an established structure with different rights and expectations.
For illustration, consider a family trust holding a business where different branches disagree about a sale. A useful process would clarify the decision-making powers, identify whose interests need representation, preserve necessary records and address whether interim protection is required. A well-drafted dispute clause can assist, but sound administration remains essential.
Representation is central to a binding result
A trust may benefit minors, people unable to manage their affairs and future generations. The 2025 amendments give the tribunal powers to appoint representatives for persons or classes, including unborn or unascertained persons. They also provide for arbitration guardians and safeguards when compromises affect represented interests or persons under a disability. [1]
Those provisions deserve attention before proceedings begin. The appointment of a representative, possible conflicts and the approvals required for settlement can materially affect whether the outcome resolves the dispute for everyone concerned. Agreement among the adults currently involved may not be enough.
Private proceedings remain subject to judicial safeguards
The Banks and Trust Companies Regulation (Amendment) (No. 2) Act, 2025 introduces a specific framework for civil proceedings concerning a trust or trust instrument. On a party’s application, proceedings are to be conducted in private unless a person objects. If there is an objection, the court must be satisfied that the interests of justice require privacy. [2]
The court must consider relevant factors including open justice, the protection of private lives and property, the welfare of minors and the importance of confidentiality in banking and trust matters. The legislation also addresses judgments, publication restrictions and access to court files. Families should therefore plan for a reasoned application and an appropriate order, rather than assume that all proceedings are automatically confidential. [2]
Court supervision can support effective administration
The Trustee (Amendment) Act, 2025 expressly enables a trustee, personal representative or power holder to seek the court’s opinion, advice or direction, sitting in private, on specified management and administration questions. This reinforces the value of obtaining judicial guidance where the circumstances justify it. [3]
Arbitration also operates within a statutory system of court oversight. The 2025 amendments address challenges based on jurisdiction and serious irregularity, and provide a qualified route for appeals on questions of law. That route is subject to the applicable agreement and statutory requirements, including consent or leave. Parties should understand those features when deciding how disputes will be resolved. [1]
For international families, there is a further practical question: where must the outcome take effect? Assets, participants or enforcement steps may be outside The Bahamas. Foreign recognition and enforcement should be considered with counsel in the relevant jurisdiction, particularly where trust participants have not signed a conventional arbitration agreement.
Prepare before disagreement becomes entrenched
A periodic trust review should consider whether the governing instrument gives clear answers about authority, information, decision-making and dispute resolution. It should also examine whether family circumstances have changed, whether new interests require representation and whether the documents remain consistent with the way the trust is administered.
If a dispute has already arisen, early attention should turn to preserving documents, identifying conflicts and determining whether urgent protection or court directions are needed. The choice between negotiation, mediation, arbitration and court proceedings should follow the legal and practical needs of the matter.
The Bahamas’ reforms provide valuable tools for protecting family interests. Their value depends on careful drafting, fair participation and informed use. At PCC, we work with families, fiduciaries and their international advisers to assess those choices and develop a proportionate approach to trust governance and disputes.
Discuss trust governance and dispute resolution with PCC
Adapted from L. Ryan Pinder K.C.’s addresses to the AIBT Nassau Conference on 17 September 2025 and the BFSB CEO Conclave on 29 January 2026. Updated for publication.
Sources and further reading
[3] Trustee (Amendment) Act, 2025 — sections 2–4, including the amendment to section 77.
This article provides general information and commentary as at 10 September 2026. It is not legal or tax advice. Application depends on the facts, the relevant documents and the laws of each jurisdiction concerned.