Betamax Ltd v State Trading Corporation (Mauritius)  UKPC 14: Reopening of Decided Fact or Law Issues Is Not Allowed in Public Policy Challenges
Betamax appealed the Supreme Court of Mauritius' ruling to the Privy Council's Judicial Committee. The Supreme Court had rejected the arbitral award given by the arbitral tribunal to the then respondent, Betamax, and permitted the appellant, State Trading Corporation (STC).
Within the International Arbitration community, the Board of the Privy Council's judgment in this Appeal, dated 14 June 2021, is warmly welcomed. The Board decided in Betamax's favor, overturning the Supreme Court's decision and enabling Betamax to enforce the USD 115.3 million arbitral judgment, plus interest and fees.
The case has significant implications for a court's ability to decide whether to set aside or refuse to implement an international arbitration judgment because it violates public policy.
The Privy Council is debating several issues.
- Was the Supreme Court authorized to examine the Arbitrator's conclusion in the Award that the COA was not subject to the PP Act and PP Regulations and that its creation without the permission of the Central Procurement Board was not illegal?
- Was the COA unlawful as having been entered into violating the PP Act and PP Regulations on their correct interpretation if the Supreme Court had the authority to examine the Arbitrator's decision?
- Was the Award giving effect to the COA in violation of Mauritius' national policy if the COA was illegal?
As a result of the Privy Council's decision on the first problem, the second did not arise. Regardless, the Board addressed it, concluding that the arbitrator was correct in his judgment that the COA was exempt from the PPA and PPR and was not unlawful under those laws. The rationale of the Board, which is based on an interpretation of relevant Mauritian law, is outside the scope of this piece. The Privy Council did not believe it was essential or valuable to examine the third problem in light of its judgments on the first two.
The Privy Council’s decision is significant for two key reasons.
First, it promotes the finality of international arbitration by stating unequivocally that the public policy basis for challenges to arbitral awards or attempts to resist enforcement should be interpreted narrowly and that it does not grant carte blanche to reopen an arbitrator's findings on the facts or law. The chances of a tribunal concluding an issue of domestic law interpretation are little to none.
Second, the Privy Council's ruling harmonizes numerous English and Singaporean precedents on the exercise that courts must do when evaluating the public policy exemption.
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