Peepul Capital Fund II LLC and another v VSoft Holdings LLC (Mauritius)

Challenges to arbitral awards under the Mauritian International Arbitration Act 2008 are confined to the statutory grounds, and the court retains discretion even where a ground is established. An arbitrator may objectively construe counsel’s closing submissions in context. A provisional intervention inviting counsel to take instructions does not deny a party the opportunity to present its case where counsel remains free to continue. The statutory jurisdiction is not a merits appeal, and substantial prejudice must be shown. A freezing injunction may protect enforcement of an award where dissipation is risked. An anti-suit injunction cannot be justified under the Act merely to protect the losing party. Inherent equitable relief may also be refused where the applicant is in deliberate, flagrant contractual breach and the injunction is vague or overbroad.

VSoft and the Investors entered into agreements providing for the Investors’ exit from VSoft in return for staged payments. The Investors later commenced arbitration under the Shareholders Agreement. After VSoft’s counsel stated that the claim was not disputed except as to quantification, the arbitrator issued an award for the Investors.

VSoft applied to the Supreme Court of Mauritius under section 39 of the Mauritian International Arbitration Act 2008 to set aside the award, alleging denial of the opportunity to present its case, breach of natural justice and conflict with public policy. The Supreme Court rejected the application and continued freezing and anti-suit injunctions. VSoft appealed against the award-related orders, while the Investors cross-appealed against the anti-suit injunction.

The Board dismissed VSoft’s appeal against the refusal to set aside the award and continued the freezing injunction. It allowed the Investors’ cross-appeal and discharged the anti-suit injunction.

1. Under section 39(2) of the Mauritian International Arbitration Act 2008, the grounds for setting aside an award are limited. The Supreme Court has a discretion whether to set aside an award even where a specified condition is satisfied.
2. Objectively construed in context, counsel’s post-adjournment submission that the claim was not disputed amounted to abandonment of VSoft’s defence to liability under the Shareholders Agreement, leaving only quantum. The arbitrator was entitled to interpret the submission in that way. A later letter purporting to advance a different basis of liability could not reopen issues already concluded.
3. The arbitrator had expressed only a provisional view and invited counsel to take instructions. He did not stop counsel or pressure him to abandon the case. VSoft therefore remained able to present its case, and there was no breach of natural justice under section 39(2)(a)(ii) or section 39(2)(b)(iv). The statutory jurisdiction did not permit the Board to reconsider the arbitrator’s decision merely because it might disagree with its merits.
4. VSoft could not establish substantial prejudice. Its pleadings, evidence and submissions supplied no proper basis for limiting liability to repayment of the original investment. VSoft had affirmed the Shareholders Agreement in correspondence and pleadings. Nor had it pursued the alleged reduction in interest as a quantum issue.
5. The public-policy challenge failed. The Investors had tendered their shares for cancellation, and any failure to complete the administrative cancellation process was within VSoft’s control. The award did not require a further order to prevent double recovery.
6. The freezing injunction was a conventional means of protecting enforcement of the award where there was a real risk of dissipation. The anti-suit injunction could not be supported by section 23 because it did not secure or support enforcement in favour of the successful parties. It was also too vague and wide, since the Investors remained, or were entitled to become, shareholders because of VSoft’s breaches. Inherent equitable relief was inappropriate for a party in deliberate and flagrant breach that had offered no steps to remedy its default.

• Privy Council: VSoft’s appeal against the Supreme Court’s refusal to set aside the award was dismissed. The freezing injunction continued. The Investors’ cross-appeal was allowed and the anti-suit injunction was discharged.
• Supreme Court of Mauritius: On 13 December 2017, the court rejected VSoft’s application under section 39 of the Mauritian International Arbitration Act 2008 and continued both injunctions pending enforcement.
• Arbitration: The arbitrator issued the award on 8 January 2015 after treating liability under the Shareholders Agreement as no longer disputed.