Privy Council queries appeal as of right in Mauritius arbitration cases

In a recent judgment published on 19 December 2019, the Judicial Committee of the Privy Council of England and Wales have commented upon the Mauritian international arbitration law, raising questions about the availability of an appeal to the Privy Council "as of right" and highlighting Privy Council procedure in such cases.

Since around 2008, Mauritius has put in place a modern and highly attractive legal regime for international arbitration. It was designed to attract international parties to adopt Mauritius as a seat of arbitration.

This is intended to complement Mauritius' efficient and reliable regulatory and business environment, which attracts an increasing number of investors and businesses to establish holding and operating companies in Mauritius. It is particularly popular as a base for African investments and operations.

The final court of appeal of Mauritius is the Judicial Committee of the Privy Council in London, which is constituted mainly by English Supreme Court judges. The Mauritian International Arbitration Act 2008 ("the Act") provides for an appeal to the Judicial Committee "as of right" from decisions of the Mauritian Supreme Court under the Act. This includes decisions on challenges to international arbitration awards, and decisions on enforcement of international awards in Mauritius.

The Peepul judgment

Such an appeal was brought in Peepul Capital Fund II LLC v VSoft Holdings LLC [2019] UKPC 47, in which the judgment was handed down on 19 December 2019.

Peepul and VSoft had got involved in an arbitration in Mauritius regarding Peepul's investment in VSoft. At an arbitration hearing, VSoft's counsel made comments which the Arbitrator understood to concede the claim, and to contest only the quantum of the award. The Arbitrator proceeded on that basis and made an award against VSoft. VSoft sought to have that award set aside on the basis that the award was rendered in breach of the rules of natural justice, or that the apparent concession followed an inappropriate intervention by the arbitrator which meant that VSoft was not able to present its case.

The Supreme Court of Mauritius dismissed the challenge to the award, finding that the concession had been clearly made and that the arbitrator did not deprive VSoft of an opportunity to put its case. The Judicial Committee agreed, finding that VSoft's counsel had unequivocally abandoned its defence to the claim. Even if that was wrong, there had been no substantial prejudice caused by any loss of opportunity to make further arguments before the arbitrator.

Questions and clarifications over appeals "as of right" to the Privy Council

As a postscript to the Judicial Committee's judgment, the Justices commented that the provision for appeals "as of right" to the Privy Council from decisions of the Supreme Court is highly unusual, and gives a very wide opportunity to appeal compared to other jurisdictions with laws based on the UNICTRAL Model Law. Lord Briggs said that "this is an appeal which would, in the Board’s view, have been unlikely to have withstood a substantive requirement for permission." His Lordship went on "The Board does not know what factors in the mind of the legislature underlay the conferral of a right of appeal in such unusually broad terms. But the extended chronology of the present litigation might at least be thought sufficient to give pause for thought about some tightening of the appellate process by way of amendment."

VSoft's Counsel in the appeal was Salim Moollan QC, who was a leading member of the team which originally assisted the Government of Mauritius with the drafting of the Act. The Travaux Préparatoires to the Act explain (paragraph 2) the inclusion of the right of appeal as follows: "The Act provides that all Court applications under the Act are to be made to a panel of three judges of the Supreme Court, with a direct and automatic right of appeal to the Privy Council. This will provide international users with the reassurance that Court applications relating to their arbitrations will be heard and disposed of swiftly, and by eminently qualified jurists." 

The drafters of the Act in Mauritius therefore considered that potential delays in achieving finality, caused by allowing an appeal to the Privy Council in all cases, were justified by the attraction of having all cases subject to review by the members of the Judicial Committee.

However, an aspect of court practice should be noted where there is a provision allowing an appeal to the Privy Council "as of right". The Act provides in section 44 that appeals to the Privy Council shall be made in accordance with the procedure applicable to appeals as of right under the Mauritius (Appeals to Privy Council) Order 1968 (the "Order"). However, the Order provides in section 5 that "A single Judge of the Court [the Supreme Court of Mauritius] shall have power and jurisdiction— (a) to hear and determine any application to the Court for leave to appeal in any case where under any provision of law an appeal lies as of right from a decision of the Court".

Therefore, even where an appeal does lie "as of right" (as that expression is used in Mauritian law), permission is sought in practice from the Supreme Court. By way of example, in another well-known case decided recently (the Betamax case), the Supreme Court has granted "final leave" to appeal to the Privy Council against a decision under the Act (article here)

If the Mauritian Supreme Court refused permission to appeal against a decision under the Act, this would trigger the operation of paragraph 3.3.3(c) of the Judicial Committee's Practice Direction, which states that the Judicial Committee will grant permission to appeal: "In cases in which the appellant had an appeal as of right but the court appealed from refused in error to grant leave as of right, unless in the opinion of the Appeal Panel the appeal is devoid of merit and has no prospect of success or is an abuse of process." Even in cases where an appeal is available as of right, therefore, there is the slight possibility that the appeal might be blocked if both the Mauritian Supreme Court and the Privy Council refuse permission, which could happen if both courts considered the appeal to be an abuse of process, or so devoid of merit as to be abusive.

Future developments

It remains to be seen whether the Government of Mauritius will give consideration to amending the Act to tighten the gateway for appeals under the Act to the Judicial Committee, as mentioned by Lord Briggs. The question is one of balancing speed against the reassurance offered by the right of appeal to the Judicial Committee. 

The next major decision expected to be handed down by the Judicial Committee under the Act will be in the Betamax case, which should be heard later this year. That case seems unlikely to give rise to any questions about the right of appeal, given the strong controversy around the decision and the important issues it raises (see my article on the Supreme Court decision here). However, if other cases come before the Privy Council which are considered not to have merit, perhaps the Government of Mauritius will be given cause to reconsider the automatic right of appeal. 

 

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