Betamax Ltd v State Trading Corporation (Mauritius)

Under the International Arbitration Act 2008, a supervisory court must respect an arbitral tribunal’s final determination of fact or law within its jurisdiction. The public-policy ground permits the court to assess the award on the tribunal’s findings, but not to reopen statutory interpretation, contractual meaning or regulatory legality. This applies absent fraud, breach of natural justice or another vitiating factor. A different case arises where the award itself establishes illegality and enforcement would give effect to it. The Board also held, as an alternative, that an exemption for services incidental to goods purchased for resale could cover freight supplied under a separate contract.

Betamax and State Trading Corporation entered into a 15-year contract for the provision of tanker freight services. An arbitrator held that the contract was exempt from the Mauritian public procurement regime, was not illegal, and awarded Betamax damages.

The Supreme Court of Mauritius set aside the award under section 39(2)(b)(ii) of the International Arbitration Act 2008, holding that the contract breached procurement legislation and that enforcement conflicted with public policy. The appeal concerned whether the Supreme Court could reopen the arbitrator’s legal determination, the proper interpretation of the procurement legislation, and the consequences for public policy.

Appeal allowed. The Board set aside the order of the Supreme Court of Mauritius and allowed Betamax’s application to enforce the award.

1. The International Arbitration Act 2008, reflecting the Model Law, establishes limited court intervention, tribunal competence to determine its jurisdiction, separability of the arbitration agreement, finality of awards and no appeal on questions of law unless the parties opt in. The arbitrator had jurisdiction to decide whether the contract was exempt from the procurement legislation and whether it was illegal.
2. Under section 39(2)(b)(ii), the court must ask whether, on the findings of fact and law made in the award, the award conflicts with the public policy of Mauritius. It cannot use public policy as a means of reopening the meaning or effect of the contract, or its compliance with a regulatory scheme. The arbitrator’s conclusion that the contract was not illegal was therefore final and binding.
3. The Board distinguished Soleimany v Soleimany [1999] QB 785, where illegality was apparent on the face of the award. It explained that the enforcement court could refuse enforcement in that situation. The observations in that case suggesting a wider inquiry where the arbitrator had found no illegality were not followed. The Board regarded the actual decisions in Westacre Investments Inc v Jugoimport SPDR Holding Co Ltd [1999] QB 740, [2000] QB 288, AJU v AJT [2011] SGCA 41 and RBRG Trading (UK) Ltd v Sinocore International Co Ltd [2018] EWCA Civ 838 as consistent with finality.
4. Issue 2 did not arise after the conclusion on court intervention. Nevertheless, the Board held that Regulation 2A of the Public Procurement Regulations 2008 was a saving provision preserving the application of the Public Procurement Act 2006 to contracts other than those specifically exempted. The exemption for goods purchased for resale, including services incidental to their purchase or distribution, included freight services supplied under a separate contract.
5. The Board declined to address the consequences of illegality for Mauritian public policy, because the contract was not illegal and the Supreme Court had no power to reopen the arbitrator’s conclusion.

• Privy Council: Appeal allowed. The order of the Supreme Court was set aside and Betamax’s application to enforce the award was allowed.
• Supreme Court of Mauritius: On 31 May 2019, the court set aside the award under section 39(2)(b)(ii) of the International Arbitration Act 2008, holding that the contract breached the procurement legislation and that enforcement conflicted with public policy. Permission to appeal was granted on 24 June 2019.