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Exotic ADR: Mauritius’s emergence as a regional ADR centre

by Chris Crowe on 24 Mar 2015

Mediation in Mauritius

Being a member of the international arbitration community can be a colourful existence. International arbitrations often involve high monetary value and intriguing subject matter, while the locations of the arbitral hearings can provide an enticing backdrop. Think Sydney and Singapore, rather than Detroit or Doncaster.

General counsel choosing an arbitral location as part of contract negotiations may find it hard to ignore the allure of Mauritius, particularly if they or the counterparty is India or Africa based.

 As a high-class holiday destination with opulent hotels and exquisite beaches, there are worse places to be stuck while trying to resolve or conclude a dispute. If the flight home is overbooked or cancelled, c’est la vie.

The presence of the LCIA-MIAC Arbitration Centre, a joint venture between the Mauritian government, the London Court of International Arbitration (LCIA) and the Mauritius International Arbitration Centre, illustrates the fact that the jurisdiction is very much at the centre of the arbitration community. The opening of the MCCI Arbitration and Mediation Center in 2012 also highlights the jurisdiction’s commitment to ADR.

In addition to the hotels and the well-developed business environment, Mauritius has a sophisticated and arbitration friendly legal system. The well-developed legal sector combines both civil and common law traditions.

Alexander Gunning QC, a London-based barrister at 4 Pump Court says: 'For an effective arbitration centre you need a stable and effective arbitration system with the nuts and bolts of lawyers and arbitrators, but on top of that you need a supportive judiciary. It is all very well getting an award locally and then trying to enforce it internationally, but if you have a non-supportive local judiciary, then the counterparty can challenge the award locally and the local challenge may hold up or block its international enforcement. The Supreme Court of Mauritius has shown that it is prepared to support international arbitration.'

Gunning believes that Mauritius arbitration will be particularly appealing to Middle East and Asian investors that are entering contracts with African or Indian counter-parties as the more established arbitral locations in Europe, such as London and Paris, are probably too geographically remote for both sides.

Some Indian and African companies may even regard these arbitral centres as too Eurocentric and perhaps not as wholly sympathetic and culturally attuned to their businesses as Mauritius would be. ‘If you are from the Middle East or China and you are investing in Africa, there is no particularly strong reason to arbitrate in the traditional arbitration centres in Europe. Geographically Mauritius may make more sense,’ Gunning remarks.

With international investors and strategic acquirers seeking greater returns by targeting developing economies and frontier markets such as Africa, the need for dispute resolution centres such as Mauritius is steadily increasing. The African Development Bank, the United Nations Development Program and the Organization for Economic Cooperation and Development (OECD), predicted in May last year that investment into Africa would reach $80 billion in 2014 with the region experiencing 5.7% growth in 2015. A multitude of infrastructure, oil and gas, and natural resources projects are proposed and underway in Africa, creating a further likelihood that disputes will flare up and require resolution through arbitration or other means.

Like Singapore’s development as a dispute resolution centre for South East Asia and India, and Hong Kong’s emergence as a preferred location to resolve disputes with mainland Chinese parties, Mauritius’s proximity to Africa and its cultural affinity to India means it has a lot to play for.

Mauritius has several other factors going for it. It is a genuine financial centre and business hub. Mauritius is also a key conduit for investment into India. Through holding companies that are located there, it represents one of the biggest sources of foreign direct investment (FDI) into the world’s second most populous nation. It is also part of Africa and proximate to some of the biggest economies there. It means many African companies will be attracted by the relatively short journey required to attend any arbitral hearings.

The pure fact that it has become part of the LCIA’s expansionist programme, suggests it has a rosy future. It has a mature political environment and a stable government. The nation ranked number one in the Ibrahim Index of African Governance (IIAG) in 2014. The index grades countries according to such criteria as safety and the rule of law, human rights, sustainable economic opportunity and human development. Mauritius’s overall score of 81.7 was some way ahead of Cabo Verde in second place with a score of 76.6.

It has all the necessary foundations for a thriving arbitration and ADR centre. And when you have the ambience of the hotel pool or one of the local beaches to peruse emails and documents, it might take the edge off the stress of a commercial dispute.

This post was written by Chris Crowe who is a freelance journalist. He can be contacted at chris@crowemedia.co.uk

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Topics: ADR

Chris Crowe

Written by Chris Crowe