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Gov’t defeats BVI Airways in arbitration! Dr Smith ‘feels vindicated’

Gov’t defeats BVI Airways in arbitration! Dr Smith ‘feels vindicated’

The government has successfully defeated a claim of more than $10 million from those behind the controversial and failed BVI Airways project that sought to commence direct non-stop flights between the BVI and Miami in the United States.

In arbitration judgement handed down on Friday, May 14, the arbitrator reportedly rejected all claims BVI Airways Inc and Colchester Aviation LLC made against the Government of the Virgin Islands.

A government media release on Friday, listed the arbitrator’s conclusions as follows:

• The Government of the Virgin Islands properly performed all its obligations in relation to the Project.

• The Government of the Virgin Islands did not breach any of the terms of the Framework Agreement.

• The Government of the Virgin Islands was entitled to terminate the Framework Agreement in November 2017.

• There was no basis at all for the allegations of dishonesty or fraud made against the BVI Government.

• In addition, there was no basis for the allegation of defamation and no breach of any obligations of confidentiality by the Government of the Virgin Islands.

• The Government of the Virgin Islands has been awarded its costs of defending those very serious claims (fraud and defamation) – which were described as ‘frivolous’ following cross-examination of individuals connected with Colchester and BVIA at the March 2021 hearing.

Premier Andrew Fahie described the ruling as an “important victory … that ensures no further funds will have to be paid to these parties”.

Counterclaim and recouping the money

He further said the government will now work aggressively to recoup the funds paid over to BVI Airways and its operators.

Noting that the government has advanced a counterclaim based, in particular, on alleged dishonest conduct by Colchester and BVI Airways, Fahie said: “We are also seeking to recover the costs incurred in defending the wholly unjustified claims brought in this arbitration.”

“Anyone legally responsible for the BVI’s loss will be held to account to the extent that the law permits; we will now move to the next phase of our recovery strategy, having successfully defended this claim,” Premier Fahie added.

Former Premier “vindicated”

Facing heavy public criticism since the airline deal flopped, former Premier Dr D Orlando Smith — under whose leadership the BVI Airways deal happened — also commented on the victory.

“I am happy that the Arbitrator found that we upheld our end of the arrangements and I now feel vindicated. I am most grateful to Martin Kenney and Associates for their hard work in ensuring a win for this territory,” Dr Smitrh stated.

“I am pleased that after retaining Martin Kenney and Associates in 2018 under my administration to begin proceedings against BVI Airways that would lead to recovery of BVI Government funds, that the arbitration proceedings were successful … It has been a long hard fight with more legal battles to come very likely. In 2015 my administration acted in the best interest of the BVI in our efforts to introduce direct flights from the US to BVI,” he added.

Dr Smith’s former NDP administration had handed the airline 7.2 million of taxpayer dollars to commence direct flights between the BVI and Miami in the USA. However, the airline later laid off its staff; claiming that it needed more money to fly.


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