International arbitration is a mechanism established for the final and binding determination of disputes concerning a contractual or other relationship with an international element by independent arbitrators in accordance with procedures, structures and substantive and non-legal standards chosen directly or indirectly by the parties.
As a matter of fact, arbitration is becoming a preferred manner to resolve disputes owing to numerous benefits such as confidentiality, neutrality and enforceability.
Mauritius has recently enacted the International Arbitration Act 2008 (the "Act") which is based on the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law ("UNCITRAL") on 21 June 1985, as amended on 7 July 2006.
The Act creates a clear regime for international arbitration and is distinct from the law applicable to domestic arbitration (the "Code de Procedure Civile of Mauritius").
The main objective of the Act is to make Mauritius a recognized jurisdiction for all international arbitrations (whether arbitrations arising from ad hoc arbitration agreements or under institutional rules) and in particular, in the African context.
Investments in Africa are often made against a host of perceived economic and political risks. This includes the perception that domestic courts in African countries lack the commercial focus, propriety and efficiency that international investors are ordinarily used to; fears that decisions of African courts may not be enforceable in other jurisdictions; and the perception that African host states sometimes act in an unpredictable and/or arbitrary fashion.
Set against this background, the ambition of Mauritius to become a regional centre of international arbitration is justified given that Mauritius offers the following advantages:
- Strategic geographical location as a gateway to Africa;
- Modern legislative framework;
- Extensive network of Double Taxation Agreements and Investment
Promotion and Protection Agreements;
- Neutrality in terms of international politics;
- Political stability;
- Membership to SADC, COMESA and Commonwealth; and
- Availability of a pool of internationally trained judges,
magistrates, barristers and attorneys
At the moment, the main recognised institutional arbitration centres in Africa are the Cairo Regional Centre for International Commercial Arbitration (CRCICA), the Lagos Regional Centre for International Commercial Arbitration (LRCICA) and the Arbitration Foundation of South Africa (AFSA).
Global Business and international arbitration
The Act comes at the right time as the international financial services sector of Mauritius has gained further momentum following the classification of Mauritius on the OECD white list. Specifically, companies operating in the global business sector in Mauritius will benefit from the Act in that the promoters/shareholders/investors will be able to resolve any disputes in Mauritius by way of arbitration instead of going to court.
The Act also provides that notwithstanding any agreement to the contrary, the judicial seat of any arbitration concerning the constitution of a company holding a Global Business Licence or relating to the company shall be Mauritius. In other words, Mauritius will allow for the arbitration of disputes arising between the shareholders of GBL companies provided that:
- such disputes should remain under the ultimate control of our
- our Courts should be given the necessary powers to manage the
links which such disputes may have with third party
Furthermore, the Act sets out a simple mechanism for GBL companies to incorporate arbitration agreements into their constitution, which consists mainly of adopting a unanimous resolution of shareholders in a prescribed form. In this way, the future shareholders of the GBL companies will be bound by the arbitration clause upon subscribing to the shares of the company.
Mauritius is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards which came into force on 7 June 1959 which is also referred to as the New York Convention through the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act 2001. The latter Act shall apply to the recognition and enforcement of awards rendered under the Act.
The Act does not however link international arbitration in Mauritius with any given arbitral institutional or with any institutional rules such as those of the International Chamber of Commerce or the London Court of International Arbitration.
On the other hand, foreign lawyers are entitled to represent parties and to act as arbitrators in international commercial arbitrations in Mauritius.
With the coming into force of the Act, Mauritius ambitions to emerge as a reputed arbitration centre in this part of the world.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.