State Trading Corporation (STC) v Betamax Ltd - The Supreme Court of Mauritius - Record No 115564 - Judgement - 31 May 2019
A dispute arose between the parties in respect of the termination of their Contract of Affreightment (CoA). The matter was referred for arbitration to the Singapore International Arbitration Centre. On 5 June 2017, the sole arbitrator of the Arbitration Tribunal Mr Michael Pryles made the following award ("the Award"):
"314. For the foregoing reasons the Tribunal finds and awards as follows:
(a) the Tribunal has jurisdiction to hear and decide the claims in this
(b) STC is to pay Betamax damages in the amount of USD 115,267,199 for its default under the CoA;
(c) STC is to pay Betamax's costs in the amounts of USD 2,823,547.20, SGD 39,466 and GBP 880,296;
(d) STC is to bear the costs of the arbitration, fixed in the amount of SGD 465,223.58; and
(e) STC is to pay simple interest at the rate of 3% per annum of the amounts in paragraphs 314(b), 314(c) and 314(d) from the date of this award to the date of full payment.
315. All other claims and requests made by the parties in this arbitration have been rejected."
... The enforcement of an illegal contract of such magnitude, in flagrant and concrete breach of public procurement legislation enacted to secure the protection of good governance of public funds, would violate the fundamental legal order of Mauritius. Such a violation breaks through the ceiling of the high threshold which may be imposed by any restrictive notion of public policy.
We have absolutely no difficulty in holding that the public policy of Mauritius prohibits the recognition or enforcement of an award giving effect to such an illegal contract which shakes the very foundations of the public financial structure and administration of Mauritius in a manner which unquestionably violates the fundamental legal order of Mauritius.
For the given reasons we find that the Award is contrary to the public policy of Mauritius within the meaning of section 39(2)(b)(ii) of the IAA, and the Award is accordingly set aside. We also as a result set aside the provisional order for the recognition and enforcement of the Award which was granted on 7 September 2017.