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Betamax V. STC: Alleged Illegality, Public Policy and the Model Law

Betamax V. STC: Alleged Illegality, Public Policy and the Model Law Public policy can be raised in the context of setting aside or enforcing an arbitral award, and there is within international commercial arbitration a general consensus that the public policy concept should be defined narrowly. There is one aspect of public policy in particular which highlights the tension between the finality of awards and the right of the forum state to uphold its public policy. That is the situation where, in the face of alleged illegality, the arbitral tribunal concludes the underlying contract is lawful and enforceable. The question then arises: should a national court be permitted to re-examine the tribunal’s findings in this regard at the point of setting aside or enforcement? Relying on authorities from Singapore and England, the Judicial Committee of the Privy Council in Betamax v State Trading Corporation – a case appealed from Mauritius and which concerned an alleged breach of public procurement rules – has held that the answer to that question should be no. The Privy Council’s decision will be an important addition to the Model Law jurisprudence on Articles 34(2)(b)(ii) and 36(1)(b)(ii), and one can expect it to be cited and discussed beyond the confines of Mauritius. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asian International Arbitration Journal Kluwer Law International

Betamax V. STC: Alleged Illegality, Public Policy and the Model Law

Campbell, Mark
Asian International Arbitration Journal , Volume 17 (2): 10 – Oct 1, 2021
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Publisher
Kluwer Law International
Copyright
Copyright © 2021 Kluwer Law International BV, The Netherlands
ISSN
1574-3330
Publisher site
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Abstract

Public policy can be raised in the context of setting aside or enforcing an arbitral award, and there is within international commercial arbitration a general consensus that the public policy concept should be defined narrowly. There is one aspect of public policy in particular which highlights the tension between the finality of awards and the right of the forum state to uphold its public policy. That is the situation where, in the face of alleged illegality, the arbitral tribunal concludes the underlying contract is lawful and enforceable. The question then arises: should a national court be permitted to re-examine the tribunal’s findings in this regard at the point of setting aside or enforcement? Relying on authorities from Singapore and England, the Judicial Committee of the Privy Council in Betamax v State Trading Corporation – a case appealed from Mauritius and which concerned an alleged breach of public procurement rules – has held that the answer to that question should be no. The Privy Council’s decision will be an important addition to the Model Law jurisprudence on Articles 34(2)(b)(ii) and 36(1)(b)(ii), and one can expect it to be cited and discussed beyond the confines of Mauritius.

Journal

Asian International Arbitration Journal – Kluwer Law International

Published: Oct 1, 2021

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