Mauritius: Arbitration & Mauritius

Last Updated: 20 July 2016
Article by Marc Hein
Most Read Contributor in Mauritius, January 2017

The International Council for Commercial Arbitration (ICCA) Congress was held in Mauritius in May 2016. It was for the first time being held on African soil and it was a huge honour for Mauritius to host the ICCA Congress which puts together the world's most qualified arbitration experts in one conference every two years, suitably at a time when the jurisdiction is establishing itself on the world map of international arbitration.

Arbitration in Mauritius

Arbitration has been firmly entrenched in Mauritius since the Constitution of 1791 which made special provisions for its application at Titre IX, Section Première, when the island was still French and the Napoleonic Codes not yet enacted. It was then stipulated that "arbitration is the most reasonable means to settle disputes between citizens" and a simplified procedure was made available to render the arbitral sentence executory by the Courts of the island. Mauritius has since travelled a long way and is hoping to become a logical choice for international arbitration related to Africa, thanks to its safe, stable and democratic environment where the rule of law prevails. Mauritius now boasts an International Financial Centre which attracts international business and finance and it is the corollary of any decent international financial centre to be able to provide to its investors, shareholders, business entities and stakeholders the ways and means to settle their disputes when the latter arise.

Mauritius enacted the International Arbitration Act (IAA) in 2008 influenced by the Model Law of the United Nations Commission on International Trade Law (UNCITRAL) on International Commercial Arbitration. The Supreme Court (International Arbitration Claims) Rules 2013 then provided an adequate framework for international arbitration to facilitate litigation linked to arbitration. Mauritius has ratified and adopted since 2001 the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 – a multilateral instrument setting out the manner in which arbitral awards rendered abroad are to be enforced and recognized in the jurisdiction of signatory States (of which Mauritius is one, along with 147 other States). In 2013 a special group of Designated International Arbitration Judges was appointed among the Judges of the Supreme Court to hear all matters under the IAA 2008 that come before the Supreme Court of Mauritius. Finally should the Supreme Court intervene, an appeal lies as of right to the Judicial Committee of the Privy Council against any decision of the Supreme Court under the IAA 2008. Indeed, Mauritius, even though an independent sovereign Republic within the British Commonwealth, has kept the Privy Council of Her Majesty the Queen as ultimate Court of Appeal.

The Financial Services Commission (FSC) has required Global Business Companies Category 1 (formerly known as Offshore Companies) to add more substance in Mauritius in the last years. New substance requirements were therefore included by the FSC in its Guide to Global Business, effective on the 1st of January 2015. These companies were offered various options to bring more economic nexus between their operations and the local economy. Such Global Business companies have been therefore encouraged to open up offices locally, employ residents on a full-time basis, spend more on the island or if appropriate, get listed on the Stock Exchange of Mauritius. An added innovation is for these companies to incorporate in their constitution (Mauritian companies no longer have Memorandum and Articles of Association) a clause which provides for disputes between shareholders to be settled by arbitration in Mauritius. This is specifically provided for in the IAA 2008 and aims at attracting such companies to settle their future disputes by arbitration in the jurisdiction. A large number of companies have chosen the option of amending their constitution to add a clause providing for arbitration locally in case of such shareholders' disputes. This is therefore an additional criterion for such companies to be deemed to be tax resident in Mauritius and thereby benefit from the Double Taxation Agreements in force. Thousands of companies having chosen to add the arbitration clause and we should see arbitration cases emerging in the years to come.

Mauritius has an interesting network of Investment Promotion and Protection Agreements (IPPAs), sometimes known as Bilateral Investment Treaties (BITs). IPPAs are international agreements between countries that provide companies and individuals with special rights and legal protection when they invest in a foreign country (known as a host State). A key protection offered by the majority of IPPAs is to allow international arbitration in the event of an investment dispute, rather than force foreign investors to sue in the host State's own courts. Typically, where an IPPA exists, investors are free to bring arbitration actions in any of the arbitral institutions identified in the agreement and the host State is required to submit to the jurisdiction of the arbitration institution. These arbitral institutions are usually the International Centre for the settlement of Investment Disputes (ICSID) or the International Chamber of Commerce International Court of Arbitration (ICC).

Arbitration possibilities in Mauritius

Mauritius has established a new arbitration centre known as the LCIA-MIAC Arbitration Centre following a joint venture agreement between the London Court of International Arbitration (LCIA) and the Mauritius International Arbitration Centre (MIAC). This private institution is governed by its own detailed and comprehensive rules which are inspired by the rules of the LCIA and which are regularly updated in order to deliver efficient and effective arbitral processes to its users. Thus, Mauritius now has access to world-class arbitrators and services to assist with every aspect of the administration of disputes together with the knowledge and expertise required to tailor the processes. The LCIA-MIAC joint venture also caters for mediation as a preliminary step to arbitration.

Mauritius concluded in 2009 a Host Country Agreement with the Permanent Court of Arbitration (PCA), based in The Hague, Netherlands and established by the Hague Convention for the Pacific Settlement of International Disputes in 1899. This Agreement establishes the legal framework under which future PCA-administered proceedings whether they are between states or investor against state disputes, can be conducted in the territory of Mauritius. The PCA-Mauritius Host Country Agreement aims to make PCA dispute resolution services more accessible to parties in Mauritius and the surrounding region and contribute towards the promotion of the jurisdiction as an arbitral venue of quality. It should be noted that Mauritius became the first PCA host country of Africa to have provided for the establishment of a physical PCA presence in its territory. The PCA office opened in 2010 with the general aim of assisting with the promotion of the pacific settlement of international disputes in and with respect to the region, and specifically to assist with the discharge of its functions under the IAA 2008. The IAA 2008 entrusts to the Secretary General of the PCA the power to appoint arbitrators and to take other measures relating to the arbitral proceedings such as the challenge of arbitrators and the termination of mandate in the event of controversy or the adjustment of arbitrators' fees.

A further arbitration centre present in Mauritius is the MCCI Arbitration and Mediation Center (MARC) which operates under the aegis of the Mauritius Chamber of Commerce and Industry (MCCI). The MCCI has used Alternative Dispute Resolution (ADR) methods since its first years of existence in the nineteenth century. At that time, arbitration was already considered as a flexible and efficient means of resolving disputes between MCCI members involved in commercial transactions. It is in the same vein that the MCCI decided in 1996 to provide arbitration based on the model of the International Court of Arbitration of the International Chamber of Commerce (ICC) and with arbitration rules inspired from the UNCITRAL model rules in order to resolve business disputes in a speedy and efficient way. In 2013, the MCCI signed a strategic partnership with the Centre de Médiation et d'Arbitrage de Paris (CMAP), for the promotion of ADRs in Mauritius and in the region, for the training of professionals in mediation and arbitration. This arbitration centre benefits from all the institutional facilities of the MCCI, and of its expertise in the field of local and international business. It also has as objective to provide operators, individual and corporate, as well as public organisations, with the means to initiate arbitration and mediation procedures in a prompt and effective way, in conformity with international standards.

It is hoped that Mauritius has now adapted itself to become an international arbitration centre. The island was selected as the host country for the ICCA Congress 2016 on the grounds that it is one of those countries which has made significant recent advancements as a venue for international arbitration and because of the progress that Mauritius has made to improve its legal system for international arbitration. Mauritius is a sovereign democracy with a robust economy and is geographically well situated to serve the African continent. As a member of the African Union (AU), of the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the Indian Ocean Rim Association (IORA), the island has become a crucial International Financial Centre for the region.

The ICCA Congress

The programme announces that:

"The Congress is a major academic and professional event, representing a significant milestone in the advancement of international arbitration law and practice. It includes presentations of papers from the leading experts in the field of international arbitration, as well as substantial opportunities for discussion and sharing of ideas. Delegates travel from all over the world to take part in the ICCA Congress, because there is no better opportunity for practitioners and other users of international arbitration to ensure that they are up to date with the latest developments in the subject and, more importantly, are involved in the discussions that will shape developments in the field in years to come."

The Congress also addresses arbitration and the rule of law, questions of fundamental importance to our discipline as arbitration gains popularity in one of the most rapidly advancing economic regions of the world.

The ICCA President, Albert Jan van den Berg said: "We are all aware of the role that international arbitration plays in facilitating and fostering cross-border trade, across and among continents; but what about the broader question of how it impacts efforts to strengthen the rule of law more generally? During the Mauritius 2016 Congress, invited speakers explore this issue and related questions"

The Secretary General of the United Nations, Ban Ki-moon and the Egyptian Nobel Peace Prize Laureate Mohamed ElBaradei address the Congress as guest speakers. The Congress thus brings together many of the brightest legal minds from the continent and further afield to discuss the interplay between arbitration and the rule of law as well as the procedural aspects of the commercial arbitration. In particular, there is a focus on the Perspectives of Arbitration in Africa since the last decade has seen a blossoming of international arbitration on this continent with numerous regional arbitration centres emerging in Johannesburg, Nairobi or Kigali and the development of new national arbitration laws. A group of leading African and international practitioners at the Congress discuss their experiences arbitrating disputes in African seats and arbitral centers, including the particular benefits and challenges of international arbitration for the continent. Finally, the Congress discusses future steps to promote and improve international commercial arbitration.

Undoubtedly, the ICCA 2016 has upgraded the profile of Mauritius in the legal and business world and enhances the country's visibility as a reliable venue to hold arbitral proceedings.

PDF Download – Offshore Investment, April 2016, Page 22-23

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