\u201cKorean Telecoms takes Rwanda to international arbitration in Mauritius over a revoked 25-year LTE wholesale license it claims was guaranteed until 2038[1]\u201d, read the headline in the daily newspaper Business Korea this past 30 March. There is no shortage of press articles highlighting Mauritius\u2019s development as a leading centre for international arbitration. Indeed, this was the stated ambition, as far back as ten years ago, of Roshi Bhadain, then Minister for Financial Services, at the opening of the 23rd session of the International Council for Commercial Arbitration. <\/p>\n
As an offshore centre and a popular, dynamic destination, Mauritius is gradually establishing itself as a hub for international arbitration.<\/p>\n
To this end, Mauritius has quickly established a legal framework favourable to international arbitration, notably through the adoption of the Mauritian International Arbitration Act in 2008 (I). Furthermore, the attractiveness of Mauritius\u2019s arbitration framework has fostered an informative body of case law on arbitration (II). Finally, the presence of active arbitration centres both reflects and contributes to the development of local practice (III). <\/p>\n
The Mauritian legal system is hybrid, reflecting a dual heritage rooted in both French civil law and British common law. Whilst the Mauritian Code of Civil Procedure (1808 \u2013 as amended) remains the legal framework for domestic arbitration, international arbitration is, for its part, primarily governed by the Mauritian International Arbitration Act 2008[2] (hereinafter \u201cthe Arbitration Act\u201d). <\/p>\n
For the record, international arbitration (as opposed to domestic arbitration) may be defined as an alternative and private means to resolve cross-border disputes, beyond the particularities of national legislation and the difficulties in determining a competent court.<\/p>\n
The Arbitration Act is largely based on the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL). This Model Law, adopted on June 21st, 1985, and amended on July 7th, 2006, aims to assist States in reforming and modernising their laws on arbitral procedure to take account of the specific characteristics and needs of international commercial arbitration. It covers and therefore helps harmonise all stages of the arbitration process, from the arbitration agreement to the recognition and enforcement of the award. <\/p>\n
This Model Law plays an important role in the development of a truly international arbitration framework, by providing standardised answers to recurring legal and procedural issues. Drawing on this model, Mauritius has offered users assurances of legal certainty and predictability. <\/p>\n
Whilst the Model Law covers both domestic and international arbitration, the Arbitration Act, for its part, applies only to international arbitration.<\/p>\n
Furthermore, certain differences, which reflect local particularities, are worth noting:<\/p>\n
Furthermore, the Supreme Court Rules (2013) contain a detailed and autonomous body of rules governing the handling of arbitration-related applications before the Supreme Court. This specific body of rules is also distinct from the procedures applicable to domestic arbitration[5]. This autonomy from domestic procedural law was confirmed in recent case law[6]. <\/p>\n
In short, the role of the Supreme Court is essentially one of supporting arbitration:<\/p>\n
The Mauritian law on international arbitration thus reflects the ambition mentioned above: to establish the island as a reliable and credible international arbitration hub.<\/p>\n
Mauritian case law is dynamic and reflects the Country\u2019s pro-arbitration stance. As an exception, some decisions have demonstrated a desire to protect key national interests affected by international trade[10]. This internal tension between favouring arbitration and taking national interests or procedural rules into account can be examined through several recent decisions of the Supreme Court of Mauritius. <\/p>\n
(Conditions for referral to arbitration)<\/p>\n
The arbitration clause forms the basis of the arbitral tribunal\u2019s jurisdiction. It is the agreement by which the parties to a contract consent to settle, by way of arbitration, the disputes that may arise between them in relation to that contract. Where such a clause exists, state courts must confine themselves to a strictly limited role of reviewing its validity and enforceability. <\/p>\n
This case concerns the application of the referral to arbitration mechanism: where one party brings proceedings before a state court, but the other party invokes the existence of an arbitration agreement, the court automatically[11] refers the proceedings to the Supreme Court (pursuant to Section 5(1) of the Arbitration Act).<\/p>\n
In principle, following such a transfer, the Supreme Court must refer the parties to arbitration, unless a party demonstrates prima facie a \u201cvery strong probability\u201d that the arbitration agreement is void, inoperative or unenforceable. In such a case, the Supreme Court itself decides the matter. <\/p>\n
In the Gfin Corporates case, the Court firmly reiterated the requirement for such prior demonstration:<\/p>\n
\u201cFor the given reasons, we have no difficulty in holding that the respondent has failed to establish, on a prima facie basis, pursuant to section 5(2) of the Act, that there is a very strong probability that the arbitration agreement may be null and void, inoperative or incapable of being performed for any of the reasons advanced by him\u201d.<\/p>\n
(The arbitral tribunal\u2019s jurisdiction to rule on its own jurisdiction)<\/p>\n
The principle of competence-competence is a fundamental pillar of international arbitration, enshrined in section 20 of the Arbitration Act. For the record, this principle has two effects: (i) the positive effect, which allows arbitrators whose jurisdiction is challenged to rule directly on that issue; and (ii) the negative effect, which prohibits state courts from substituting their own judgement for that of the arbitrators. <\/p>\n
Hewlett-Packard rules on an application for an interlocutory judgment[12], as the state court refused to refer the dispute to arbitration on the grounds that there was no applicable arbitration clause in the contract at issue. The appeal also concerns the jurisdiction of the state court under the Arbitration Act and in light of the principle of competence-competence. <\/p>\n
Firstly, the Court dismisses the plea of lack of jurisdiction based on the Arbitration Act. It dismisses the argument that, pursuant to section 5(1) of the Arbitration Act, the lower courts lacked jurisdiction to hear the case and should not have considered the procedural objection, but should instead have automatically transferred the case to the Supreme Court. The Court dismisses this argument, noting that the said section requires not only that the existence of an arbitration agreement be established, but also that a request for transfer be made explicitly: <\/p>\n
\u20185. Substantive claim before Court: <\/p>\n
Where an action is brought before any Court, and a party contends that the action is the subject of an arbitration agreement, that Court shall automatically transfer the action to the Supreme Court, provided that that party so requests not later than when submitting his first statement on the substance of the dispute.\u2019<\/p>\n
The Court then dismisses the second ground of appeal based on the competence-competence principle. The Appellant argued, relying in particular on articles 1016 and 1023 of the Mauritian Code de proc\u00e9dure civile, that the arbitrator should have ruled first and foremost on his own jurisdiction and that the state courts should have refrained from reviewing the validity of the clause before the arbitrator had done so. In response, the Court acknowledged the existence of the principle in the Code as well as in the International Arbitration Act 2008; however, it held that the initial decision to determine, first and foremost, whether there is an arbitration clause applicable to the dispute, does indeed fall within the jurisdiction of the state courts. If no applicable arbitration agreement is found to exist, the state court retains jurisdiction and adjudicates the case. <\/p>\n
This decision clarifies the mechanism for referral to the Supreme Court set out above: this is not automatic, as it requires an express request from the party seeking to avail itself of it. The Supreme Court adopts a balanced approach, relatively favourable to arbitration, without disregarding the procedural rules imposed by the International Arbitration Act. <\/p>\n
In light of this judgement, parties who are bound by an arbitration clause (unlike in this particular case) but who are nonetheless brought before the Mauritian courts of first instance should consider applying to the Supreme Court in limine litis for a transfer, so that a decision on a possible referral to arbitration may be made under the best possible conditions.<\/p>\n
(On the recognition and enforcement of foreign arbitral awards)<\/p>\n
The effectiveness of international arbitration depends on the winning party being able to pursue and secure the enforcement of the award in those States where it is capable of producing its effects. In this regard, the 1958 New York Convention, duly ratified and implemented by Mauritius, establishes the principle of the recognition and enforcement of foreign awards (subject to strictly limited exceptions). <\/p>\n
Essar Steel Limited (ESL) lodged an application to set aside the interim order made by the Supreme Court on 22 February 2018, granting recognition and enforcement of an arbitral award by the International Chamber of Commerce (ICC) dated 19 December 2017 in favour of ArcelorMittal USA LLC (AMUSA) and sought to suspend the enforcement of that award.<\/p>\n
In short, the issue was whether ESL had established that the arbitral tribunal had violated its right to due process, as enshrined in Articles V(1)(b)[13] and V(2)(b)[14] of the New York Convention, thereby justifying the setting aside of the interim order granting the recognition and enforcement of the arbitral award in Mauritius.<\/p>\n
Upon examination, the Court found that the applicant had indeed been given a reasonable opportunity to be heard, but had chosen not to participate fully in the proceedings (Article V(1)(b)). Furthermore, in the Court\u2019s view, the claimant had not demonstrated a flagrant breach of fundamental principles (Article V(2)(b)). Consequently, it upheld the order granting recognition and enforcement of the award and refused to stay its enforcement. <\/p>\n
This decision reflects the restrictive interpretation adopted by the Mauritian High Court when assessing the grounds for refusing the recognition and enforcement of foreign arbitral awards under the 1958 Convention. More generally, this judgment is part of the pro-enforcement trend (favourable to the enforcement of awards) observed within the Mauritian courts. <\/p>\n
(Appeal before the Judicial Committee of the Privy Council,
concerning public order in Mauritius)<\/p>\n
This case is one of the key precedents in Mauritian law on international arbitration. This is because, at the conclusion of this case, the Judicial Committee of the Privy Council quashed a judgment of the Supreme Court and upheld the enforcement of an arbitral award made in Singapore in favour of a private company (Betamax) against a Mauritian public-law company (the State Trading Corporation, or STC). <\/p>\n
On that occasion, the Council held that:<\/p>\n
When asked about the scope and procedures for judicial review of the compliance of arbitral awards with public policy, the Council reiterated that, when hearing an application for annulment, the judge must not examine whether the arbitrator correctly decided issues of fact or law, but must solely determine whether there is a conflict between the enforcement of the award in question and public policy.<\/p>\n
The public policy defence cannot serve as the basis for a genuine appeal against the award, that is to say, it cannot be invoked to review the merits of the case: \u201c[the Supreme Court] cannot, under the guise of public policy, reopen issues relating to the meaning and effect of the contract or whether it complies with a regulatory or legislative scheme\u201d.<\/p>\n
Consequently, the Council concluded \u201c[\u2026] that the Supreme Court was in error in reviewing the Arbitrator\u2019s decision that the COA was exempt from the provisions of the PP Act and PP Regulations. That decision was final and binding on the parties and therefore no issue arose under section 39(2)(b)(ii) of the International Arbitration Act as to whether the Award was in conflict with the public policy of Mauritius\u201d. <\/p>\n
As the Council points out, it is the incorporation of the award into positive law that must contravene public policy. Consequently, a review of compliance with Mauritian public policy cannot justify a full appeal against the award (such appeal being excluded by default under the Arbitration Act). <\/p>\n
In setting aside the award, the Supreme Court had been keen to point out that public procurement rules formed part of national public policy, recalling their purpose: to ensure equal access to public contracts, to promote transparency and to combat corruption.<\/p>\n
Regardless of the belated U-turn by the Mauritian administration (which had terminated this contract following a change of government), one might still have wondered whether the exequatur of an arbitral award, based on a contract of uncertain legality, might not be likely to undermine domestic public policy.<\/p>\n
According to the Supreme Court, answering this question required, first, determining whether the contract fell within the scope of these mandatory rules or was exempt from them, and second, whether these rules had been complied with at the time of the contract\u2019s award.<\/p>\n
After providing a detailed account of Mauritian law on international arbitration, the Council precisely set out the issues before it. It then noted that the assessment of the contract\u2019s validity had been entrusted to the arbitral tribunal alone, whilst its arbitrability had never been contested[15]. On this basis, it rejected the argument that reviewing the award\u2019s compliance with public policy could justify a genuine appeal on the merits, even if the regulatory framework in question fell within the scope of public policy. The Council even went so far as to explain why, in its view, the arbitrator had not erred in his interpretation of the exemption from the rules governing the award of public contracts. <\/p>\n
Today, Mauritian legal practitioners agree on the scope of this landmark judgment: when ruling on the setting aside of an award, the Supreme Court must under no circumstances take the place of the arbitrators in re-examining the merits of the case[16].<\/p>\n
Whilst it operated for many years as a joint venture with the London Court of International Arbitration (LCIA-MIAC Arbitration Centre), the development phase of the Mauritius International Arbitration Centre appears to have been completed in 2018, the year it became \u2018independent\u2019.<\/p>\n
The MIAC enjoys the support of the Mauritian government and forms part of its broader policy aimed at making Mauritius a centre for dispute resolution and a leading international seat of arbitration[17].<\/p>\n
As such, the MIAC has a tripartite structure comprising an Advisory Board, a Board of Directors and a Secretariat (headed by a Registrar, currently Mr Karim M\u2019ziani).<\/p>\n
This arbitration centre offers many advantages, notably:<\/p>\n
Finally, MIAC has its own MIAC Arbitration Rules 2018, which appear to be modelled on the UNCITRAL Arbitration Rules.<\/p>\n
Since its establishment in 1996 on the initiative of the Mauritius Chamber of Commerce and Industry, MARC has now established itself as a well-established arbitration centre, capable of offering the business community swift and effective means of resolving disputes, whether through mediation or arbitration. Unlike the MIAC, which enjoys a certain degree of institutional support, MARC operates as an independent, autonomous and non-governmental branch of the Mauritius Chamber of Commerce and Industry. The centre thus aims to become a \u2018neutral and unique interface for [alternative dispute resolution] between Africa and Asia\u2019[18]. <\/p>\n
It too comprises a permanent secretariat (headed by a registrar, Mr Alexis Merle), a board of directors and an advisory board (since 2017).<\/p>\n
The MARC has its own MARC 2018 Rules of Arbitration.<\/p>\n
As early as 2010, the Permanent Court of Arbitration chose to open its first overseas office in Mauritius. In this regard, \u201cby establishing a physical presence of the PCA in Mauritius, the PCA and Mauritius sought to strengthen and develop the framework for cooperation previously established by the Seat Agreement concluded in 2009 between the PCA and Mauritius\u201d[19]. <\/p>\n
The role of such an organisation should not be underestimated, as the Mauritian International Arbitration Act of 2008 entrusts the Secretary-General of the Permanent Court of Arbitration with the task of appointing arbitrators and taking other measures relating to arbitration proceedings[20]. In other words, the PCA acts as a genuine institutional support judge. <\/p>\n
However, the role and functions of the supporting judge are now at the heart of arbitral practice. Their involvement helps to ensure the efficiency of arbitration and to facilitate the process, particularly in complex arbitrations. The decision to entrust this role to the PCA is both surprising and innovative: unlike other systems (such as in France), where this role is performed by state courts, Mauritius has chosen to entrust this function to a neutral international institution. This model is consistent with the Model Law mentioned above, which provides for the use of an independent appointing authority. This distinctive feature appears to further strengthen Mauritius\u2019s international credibility as an arbitration centre. <\/p>\n
Thus, the development of several arbitration centres appears to confirm the island\u2019s clearly stated ambition to establish itself as a leading centre for international arbitration for both developed and developing countries.<\/p>\n
Ultimately, the gradual establishment of a favourable legislative framework (I), clarified by liberal case law (II), has fostered the dynamic development of local institutions (III), making Mauritius a genuine centre for arbitration. <\/p>\n
Is Mauritius set to become the \u2018Hong Kong of arbitration\u2019 in the Indian Ocean? Barlen Pillay, Permanent Secretary-General of MARC, is already convinced of it[21]! Given the country\u2019s rapid economic development, this ambition is proving increasingly justified with each passing day! <\/p>\n","protected":false},"excerpt":{"rendered":"
\u201cKorean Telecoms takes Rwanda to international arbitration in Mauritius over a revoked 25-year LTE wholesale license it claims was guaranteed until 2038[1]\u201d, read the headline in the daily newspaper Business Korea this past 30 March. There is no shortage of press articles highlighting Mauritius\u2019s development as a leading centre for international arbitration. Indeed, this was […]<\/p>\n","protected":false},"author":1,"featured_media":1764,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-1763","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"yoast_head":"\n