IMO it is completely wrong for anyone to keep a dog that is known to bite. I am fond of dogs, although we don't currently have one, but would never keep one that couldn't be trained not to snap or bite.
That said, you have addressed the problem, but the dog's owner is refusing to see the point.
A point no-one seems to have considered is that a three year old isn't going to enjoy a family reunion if this sort, so even if there had been no grumpy dog, taking a child that age to a function of this kind is frankly ridiculous.
And now I am prepared to duck.
So OP, you might want to invite the relatives from NZ to your house to meet your grandson and see his parents.
Then you can decide whether you want to go to a family function where you or someone else is liable to be bitten by a dog.