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

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. international arbitration, domestic arbitration, remission, partial remission, suspension of proceedings, Article 34(4) of UNCITRAL Model Law, arbitral tribunal, judicial intervention, powers of arbitrators, modified award, Arbitration and Conciliation Act 1996, curability, International Arbitration Act, Singapore Arbitration Act, resumption, fresh evidence.