Worldwide: Appleby Successfully Enforces An English Judgment Before The Supreme Court Of Mauritius

Last Updated: 20 July 2015
Article by Malcolm Moller and Sharmilla Bhima

Appleby successfully appeared for Dallah Albraka (Ireland) Ltd (Applicant) before the Supreme Court of Mauritius (Supreme Court) in the case of Dallah Albaraka (Ireland) Ltd v Pentasoft Technologies Limited and anor 2015 SCJ 168 (Dallah).

The case of Dallah concerned an application for the recognition and enforcement of an English judgment delivered on 13 July 2007 (English Judgment) in favour of the Applicant. The English Judgment was in the sum of USD$13.36m for damages plus GBP£47,512 as costs.

The Applicant brought proceedings before the Supreme Court by way of 'exequatur' based on Article 546 of the Mauritian Code of Civil Procedure. On 27 May 2015 the Supreme Court delivered judgment in favour of the Applicant (Mauritius Judgment) by which the English Judgment was made enforceable in Mauritius.

The Applicant is a company incorporated in the Isle of Man. It is the investment arm of the Dubai-based Dallah Albaraka Group, a prominent business enterprise in Saudi Arabia and the Middle East.

Background to the Dallah Case

The Applicant based its claim before the English and Mauritian courts on a Murabaha Trade Finance Agreement (Murabaha Agreement). It entered into the Murabaha Agreement with a Singapore company which was the wholly owned subsidiary (Singapore Subsidiary) of an Indian company called Pentasoft Technologies Limited (Indian Parent). For the reasons mentioned below, it was the Indian Parent which was sued in England and the party against which the application for 'exequatur' was lodged in Mauritius.

Under the Murabaha Agreement, the Singapore Subsidiary, as borrower, contracted a facility of USD$10m (Facility) from the Applicant. In order to guarantee the obligations of its Singapore Subsidiary, the Indian Parent entered into an English-law governed Written Guarantee and Indemnity on 21 September 2000 (Guarantee). Under the Guarantee, the Indian Parent irrevocably and unconditionally undertook that it would pay the Applicant on demand "all present or future actual or contingent liabilities of [the Singapore Subsidiary]" arising under the Murabaha Agreement.

In breach of the Murabaha Agreement the Singapore Subsidiary failed to repay the Facility which in turn triggered the Indian Parent's obligations under the Guarantee. In breach of the Guarantee the Indian Parent failed to pay on demand the liabilities of the Singapore Subsidiary. Hence the proceedings against the Indian Parent before the English court.

Supreme Court Decision

In granting the application for 'exequatur', the Supreme Court confirmed that the Applicant had met the conditions for 'exequatur'. The Mauritius Judgment now stands as the leading authority under Mauritius law on (a) the jurisdictional basis for enforcing an English judgment before the Supreme Court and (b) applications for the 'exequatur' of foreign judgments in Mauritius.

Enforcing English Judgments

The Mauritius Judgment confirmed the terms of the Interlocutory Judgment that it delivered on 11 December 2011, which declared that it was not mandatory for a judgment creditor seeking to enforce in Mauritius a judgment delivered by a superior court of England and Wales to rely on the Reciprocal Enforcement of Judgments Act 1923 (1923 Act). This was based on an interpretation of the language of the 1923 Act. It followed that the 1923 Act and Article 546 of the Mauritian Code of Civil Procedure were mutually exclusive. Accordingly, it was for the Applicant to decide which of the 1923 Act and Article 546 of the Mauritian Code of Civil Procedure to resort to in order to enforce the English Judgment.

On this issue, the scope of the Mauritius Judgment was wider than the Interlocutory Judgment. Indeed the Supreme Court dismissed the arguments raised by the Indian Parent and the Co-Respondent that despite the terms of the Interlocutory Judgment, the Applicant was nevertheless caught by the terms of section 3 of the 1923 Act. Under the aforesaid section, the Applicant should have applied for the recognition and enforcement of the English Judgment within a period of 12 months. The Supreme Court held that the language of section 3 of the 1923 Act conferred discretion on the Supreme Court to waive the 12 month time-bar. Accordingly, the fact that the application for 'exequatur' was made after a period of 12 months from when the English Judgment was delivered was not fatal under Mauritius law.

Grounds to be satisfied for Exequatur

The Supreme Court affirmed its earlier decision in S.A. Epson France v Société Intervenant Technologie Ltd 2012 SJ 114 as regards the conditions to be satisfied for a successful application for 'exequatur'. On this issue it is worthy of note that Article 546 of the Mauritian Code of Civil Procedure is enabling in nature as it does not prescribe the actual conditions to be satisfied for 'exequatur'. Instead this exercise has been left to the Supreme Court. The conditions are as follows:

  • the judgment must still be valid and capable of execution in the country where it was delivered;
  • it must not be contrary to any principle affecting public order;
  • the defendant must have been regularly summoned to attend the proceedings; and
  • the court which delivered the judgment must have had jurisdiction to deal with the matter submitted toit.

Miscellaneous Matters

The case of Dallah went beyond the parameters of 'exequatur' as it considered four fundamental issues namely:

  • the issue of concurrent Mauritian and Indian proceedings based on the Murabaha Agreement;
  • the legal significance of a party labelled as 'Co-Respondent' in proceedings;
  • the relevance of Mauritius as a jurisdiction given that the Indian Parent was a foreign company; and
  • the status of legal practitioners employed by law firms registered under the Law Practitioner's Act 1984(Law Practitioner's Act).

The Issue of Concurrent Proceedings

The Indian Parent and the Co-Respondent argued that the Supreme Court could not proceed to hear the application for 'exequatur' by reason of the principles of connexité'* and 'litispendance'**. This was based on the premise that in 2011 the Applicant lodged winding-up proceedings against the Indian Parent in India based on the Murabaha Agreement. In their view the Applicant was forum shopping when lodging the Mauritian proceedings.

On this issue the Supreme Court upheld the arguments of the Applicant that the Indian proceedings did not affect the Mauritian proceedings. First, the Indian proceedings were lodged after the Mauritian proceedings and by operation of the principles of 'connexité' and 'litispendance', it was the jurisdiction which was seized last that had to determine whether it should refrain from hearing the application. In this case it was the Indian court.

Secondly, it was the international principles of 'connexité' and 'litispendance' that were relevant in the circumstances because the institutions involved were not both situated in Mauritius. In this regard, having considered the international principles of 'connexité' and 'litispendance'¸ the Supreme Court held that the Indian Parent and the Co-Respondent had not satisfied the aforesaid international principles of 'connexité' and 'litispendance'. Accordingly, the Supreme Court was perfectly entitled to hear the instant application for 'exequatur'.

The Relevance of the Mauritian Jurisdiction and the Significance of a Party Labelled as a Corespondent

The Co-Respondent argued that it was not a party to the Murabaha Agreement and had not been summoned to appear before the Queen's Bench Division. It followed that it was not caught by the English Judgment and should not have been made a party to the Mauritian proceedings. Again, the argument was made that the Applicant was forum shopping when relying on the Mauritian jurisdiction.

The Supreme Court dismissed the Co-Respondent's arguments and upheld the Applicant's argument that under Mauritius law shares held in a company were the assets of the shareholder. Here, since the Indian Parent owned all the issued shares in the Co-Respondent, the latter was its wholly-owned subsidiary. Accordingly, it was legitimate for the Applicant to seek to enforce the English Judgment in Mauritius since the Indian Parent possessed assets in Mauritius.

On this issue the Supreme Court demonstrated its understanding of and support to international business when it stated that "the [Respondent] having assets in the recognising jurisdiction which is Mauritius, the [Applicant] should not be denied access to justice and to all the enforcement remedies on the ground of inadequate connection or on the ground that the parties to the [English Judgment] are foreign companies." The Supreme Court dismissed the Co-Respondent's argument that it should not have been made a party to the Mauritian proceedings because it was not a party to the Murabaha Agreement. It held that the manner in which the parties were styled in the Mauritian proceedings made it clear that the 'exequatur' was directed at the Indian Parent only.

As to the Co-Respondent's legal status, the Supreme Court held that as a co-respondent no claim or relief was actually being claimed from it, and that such a party could choose between answering the application or remaining silent. Its status as a co-respondent also meant that it was on notice of the proceedings as these were held in its presence. Furthermore, in the Mauritian proceedings, this had a significance of its own for the Applicant as this enabled the Applicant to preserve the assets of the Indian Parent in Mauritius.

The Status of Law Firms and its Legal Practitioners

The Supreme Court dismissed the joint objections of the Indian Parent and the Co-Respondent that counsel for the Applicant should have obtained the permission of the Supreme Court before appearing for the Applicant. They argued that the Power-of-Attorney (POA) regarding the Applicant's application for 'exequatur' and its appearance before the Supreme Court had been drawn up in the name of the Applicant's counsel.

The Supreme Court reviewed the language of the POA and held that it was clear that it was Appleby as a law firm that had been granted the POA. It was satisfied that it was for the purposes of the POA that a legal practitioner employed by Appleby had been mentioned as its representative. Accordingly, the correct interpretation to be given to the language of the POA was 'Appleby duly represented by '[name of Appleby's representative]'.

In giving effect to the terms of the Law Practitioner's Act, the Supreme Court thereby confirmed the legal status of a law firm as a legal practitioner in its own right. It further confirmed that a legal practitioner employed by a law firm ceased to act in his or her individual name anymore but instead as a representative of the law firm.

Commercial Impact of the Supreme Court Decision

The decision of the Supreme Court in Dallah augurs well for the future in four respects. The Dallah case not only dealt with the area of 'exequatur' but also provided clarity in respect of:

  • Concurrent proceedings;
  • The relevance of Mauritius as a jurisdiction where the Respondent is a foreign company;
  • The significance of a party labelled as 'Co-Respondent'; and
  • The status of law firms which are legal practitioners in their own right under the Mauritius Law Practitioners' Act.

The Mauritius Judgment demonstrates an understanding of the environment in which international commerce operates and the judiciary's willingness to give effect to it in a manner that is consonant with international trends.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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