Mall of Mont Choisy Limited (MML) was party to an agreement to develop and lease a supermarket (ADL) with Pick 'N' Pay Retailers (proprietary) Limited. ADL envisaged that the parties would enter into a formal lease agreement on a subsequent date, which would be subject to the exclusive jurisdiction of the Mauritian courts and which would not contain any arbitration clause.
Subsequently, one of the directors of MML signed an undated draft of a lease agreement with Pick 'N' Pay. The lease agreement contained an arbitration clause.
MML issued proceedings in the Mauritian court against the defendants (including Pick 'N' Pay) for unpaid rent. The defendants challenged the jurisdiction of the court in favour of arbitration and the court transferred the matter to a bench of 3 designated judges under section 5(1) of the International Arbitration Act 2008 (Act). Section 5 is the equivalent of article 8 of the Uncitral (United Nations Commission on International Trade Law) Model Law on International Commercial Arbitration.
Section 5(2) of the Act provides that on such a transfer, the designated judges should refer the parties to arbitration unless a party shows, on a prima facie basis, that there is a very strong probability that the arbitration agreement may be null and void, inoperative or incapable of being performed.
The designated judges held that the wording of section 5(2) made it clear that the legislator intended them to take a non-interventionist approach. Further, it held that the 'very strong probability test' could be satisfied when the challenge to the arbitrator's jurisdiction was solely a question of law. When the challenge was based on questions of fact, an arbitrator would be better placed to determine his own competence; where the challenge was based on mixed questions of fact and law, the court would only intervene to determine the validity of the arbitration agreement where the questions of fact required only a superficial consideration by the court of the documentary evidence on record.
The court held that the question of whether the plaintiff was properly bound by the arbitration clause in the lease agreement was a question of fact and referred the parties to arbitration.
This decision further illustrates the drive of the Mauritian courts to hold parties to their arbitration agreement, where there is one.
Mushtaq Namdarkhan and Yashfir Beeharry
© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.