3. Legal Regime
Transparency of the Regulatory System
Since 2006, the GoM has reformed trade, investment, tariffs, and income tax regulations to simplify the framework for doing business. Trade licenses and many other bureaucratic hurdles have been reduced or abolished. With a well-developed legal and commercial infrastructure and a tradition that combines entrepreneurship and representative democracy, Mauritius is one of Africa’s most successful economies. Business Mauritius, the coordinating body of the Mauritian private sector, participates in discussions with and presents papers to government authorities on laws and regulations affecting the private sector.
Regulatory agencies do not request comments on proposed bills from the general public. Both the notice of the introduction of a government bill and a copy of the bill are distributed to every member of the Legislative Assembly and published in the Government Gazette before enactment. Bills with a “certificate of urgency” can be enacted with summary process. All proposed regulations are published on the Legislative Assembly’s website, which is publicly accessible via the following link: http://mauritiusassembly.govmu.org/English/bills/Pages/default.aspx .
Companies in Mauritius are regulated by the Companies Act of 2001, which incorporates international best practices and promotes accountability, openness, and fairness. To combat corruption, money laundering and terrorist financing, the government also enacted the Prevention of Corruption Act, the Prevention of Terrorism Act, and the Financial Intelligence and Anti-Money Laundering Act. While Mauritius does not have a freedom of information act, members of the public may request information by contacting the permanent secretary of the relevant ministry.
Budget documents, including the executive budget proposal, enacted budget, and end-of-year report, are publicly available and provide a substantially full picture of Mauritius’ planned expenditures and revenue streams. Information on debt obligations is also available online: http://mof.govmu.org/English/Public percent20Debt/Pages/Debt-Data.aspx .
International Regulatory Considerations
Mauritius is a member of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). It is a signatory to the Tripartite Free Trade Area and the African Continental Free Trade Area (AfCFTA), both of which remain under negotiation as of April 2019. The GoM implements its commitments to these regional economic institutions with domestic legal and regulatory adjustments, as appropriate.
Mauritius has been a member of the World Trade Organization (WTO) since 1995. The GoM reports that they notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade to the extent possible. In July 2014, Mauritius notified its category A commitments to the WTO, among the first African countries to do so. Mauritius was the fourth country to submit its instrument of acceptance for the Trade Facilitation Agreement (TFA). In 2019, Mauritius notified its category B and C commitments and their corresponding dates of implementation.
Of TFA’s 36 measures, Mauritius has classified 27 as category A, five as B, and four as C. Discussions with donors to obtain technical assistance to finance trade facilitation projects listed under category C are ongoing and, at the time of writing of the report, Mauritius had secured assistance from the World Bank and the World Customs Organization.
To coordinate efforts to implement the TFA, in 2015 Mauritius set up a National Committee on Trade Facilitation co-chaired by representatives from government and the private sector. Members include Customs, the Ministry of Agro-Industry and Food Security, the Ministry of Finance and Economic Development, and the Mauritius Chamber of Commerce and Industry. The Committee has met seven times since. Discussion topics include identification of sources of financing for category C commitments and resolution of non-tariff barriers in Mauritius.
Legal System and Judicial Independence
The Mauritian legal system is a unique mixture of traditions. Mauritius draws legal principles from both French civil law and British common law traditions; its procedures are largely derived from the English system, while its substance is based in the Napoleonic Code of 1804. Commercial and contractual law is also based on the civil code. However, some specialized areas of law are comparable to other jurisdictions. For example, its company law is practically identical to that of New Zealand. Mauritian courts often resolve legal disputes by drawing on current legislation, the local legal tradition, and by means of a comparative approach utilizing various legal systems. The highest court of appeal is the judicial committee of the Privy Council of England. Mauritius is a member of the International Court of Justice. Mauritius established a Commercial Court in 2009 to expedite the settlement of commercial disputes.
Contracts are legally enforceable and binding. Ownership of property is enforced with the registration of the title deed with the Registrar-General and payment of the registration duty. Mauritian courts have jurisdiction to hear intellectual property claims, both civil and criminal. The judiciary is independent and the domestic legal system is generally non-discriminatory and transparent.
Laws and Regulations on Foreign Direct Investment
The Economic Development Board Act of 2017 governs investment in Mauritius, while the Companies Act of 2001 contains the regulations governing incorporation of businesses. The Corporate and Business Registration Department (CBRD) of the Ministry of Finance and Economic Development administers the Companies Act of 2001, the Business Registration Act of 2002, the Insolvency Act of 2009, the Limited Partnerships Act of 2011, and the Foundations Act of 2012. Information regarding the various acts can be accessed via the CBRD’s website: http://companies.govmu.org/English/Pages/default.aspx .
All laws and regulations related to foreign investment can be downloaded from the EDB’s website: http://www.edbmauritius.org/resources/legislations/ .
The Mauritian judiciary is independent and the legal system is generally non-discriminatory and transparent. The Embassy is not aware of any recent cases of government or other interference in the court system affecting foreign investors.
Competition and Anti-Trust Laws
The Competition Commission of Mauritius (CCM) is an independent statutory body established in 2009 to enforce Competition Act 2007. It is mandated to safeguard competition by preventing and remedying anticompetitive business practices in Mauritius. Anticompetitive business practices, also called restrictive business practices, may be in the form of cartels, abuse of monopoly situations, and mergers that lessen competition.
The institutional design of the Competition Commission houses both an adjudicative and an investigative organ under one body. While the Executive Director has power to investigate restrictive business practices (the Investigative Arm), the Commissioners determine the cases (the Adjudicative Arm) on the basis of reports from the Executive Director.
Since it began operations, the CCM has undertaken 46 investigations, of which 32 have been completed and 13 are ongoing as of mid-2019. The results of completed investigations are available on CCM’s website: http://www.ccm.mu/ .
Expropriation and Compensation
The Constitution includes a guarantee against nationalization. However, in 2015, the government passed the Insurance (Amendment) Act to enable the Financial Services Commission (FSC) to appoint “special administrators” in cases where there is evidence that the liabilities of an insurer and its related companies exceed assets by 1 billion rupees (approximately USD 28 million) and that such a situation “is likely to jeopardize the stability and soundness of the financial system of Mauritius.” The special administrators are empowered to seize and sell assets. The government enacted this law in the immediate aftermath of the financial scandal explained below.
In April 2015, the Bank of Mauritius, the central bank, revoked the banking license of Bramer Bank, the banking arm of Mauritian conglomerate British American Investment (BAI) Group, citing an inadequate capital reserve ratio. As a result, Bramer Bank entered receivership and by May 2015 the receiver had transferred the assets and liabilities of Bramer Bank to a newly created state-owned bank, the National Commercial Bank Ltd., thus effectively nationalizing Bramer Bank. In January 2016, the Mauritian government merged the National Commercial Bank Ltd. with another government-owned bank resulting in Maubank, a new bank dedicated mainly to servicing small- and medium-sized enterprises. Efforts to privatize the bank did not materialize in 2018 and, as of March 2019, the GoM owns over 99 percent of Maubank’s shares.
The government likewise took over much of Bramer’s parent, the BAI Group. The FSC placed the BAI Group in conservatorship, alleging fraud and corporate mismanagement in BAI’s insurance business. Following passage of the Insurance (Amendment) Act in 2015, the FSC created the National Insurance Company, which took over the BAI Group’s core insurance business, and the National Property Fund, which took over other BAI Group assets, including a hospital and several retail outlets. CIEL Healthcare, a local private company, bought the hospital in 2017.
In 2015, BAI’s former chairman filed a dispute against the GoM with the United Nations Commission on International Trade Law (UNCITRAL), alleging that the government illegally appropriated BAI’s assets. The former chairman, who is a Mauritian-French dual national, claimed that Mauritius had breached the Mauritius-France bilateral investment treaty and requested the restitution of his assets and payment of compensation. The tribunal concluded that it lacked jurisdiction over the dispute and ruled in favor of the GoM. The former chairman appealed the tribunal’s decision and the litigation continues.
ICSID Convention and New York Convention
Mauritius is a member of the International Center for the Settlement of Investment Disputes and a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act. Mauritius is also a member of the Multilateral Investment Guarantee Agency of the World Bank.
Investor-State Dispute Settlement
Mauritius does not have a bilateral investment treaty or free trade agreement with the United States. The Embassy is unaware of any investment dispute involving U.S. investors.
As explained above, the former chairman of BAI, a dual French-Mauritian national, filed a dispute against the government of Mauritius with UNCITRAL alleging that the government illegally appropriated BAI’s assets. The tribunal ruled in favor of the government.
In 2017, the Supreme Court rendered a judgment in a major unfair competition case lodged in 2005 by Emtel Ltd., a local telecommunications firm, against Mauritius Telecom, a parastatal entity, and the former regulator Telecommunications Authority. Emtel was engaged in a joint venture with U.S. majority-owned Millicom Enterprises, but Emtel bought all the shares of Millicom in 2014. The court awarded over USD 16 million in damages to Emtel.
A Malaysian power company, CT Power, is challenging the government’s decision to cancel a proposed energy project, which they had been negotiating with the previous government. The case remains in court.
Another dispute involves local company Betamax against the State Trading Corporation (STC) for breach of contract. In 2009, Betamax got a long-term contract with the previous government for the transportation of petroleum products from an oil refinery in India to Mauritius. The new government elected in 2014 tried at first to negotiate Betamax out of the transportation contract on the ground that the contract had been awarded unlawfully. After negotiations failed, the government decided to rescind the contract. Betamax took the case to the Singapore International Arbitration Center (SIAC). In 2017, SIAC decided in favor of Betamax and ordered the STC to pay approximately USD 133 million in damages to Betamax for breach of contract. STC then petitioned the Supreme Court of Mauritius to set aside the verdict, arguing that the Singapore tribunal lacked jurisdiction. The Supreme Court ruled in a provisional order that SIAC’s judgment could be enforced within 14 days. STC challenged the provisional order. As of mid-2019, the case is ongoing.
The Association des Hoteliers et Restaurateurs of Mauritius (AHRIM), which promotes the interests of hotels and restaurants in Mauritius, challenged the GoM’s issuance of an environmental impact assessment license to Growfish International Ltd, a company involved in aquaculture. AHRIM is concerned about the impact the fish farm can have on tourism and the marine environment. Growfish is a company incorporated in Mauritius and financed by investors from South Africa and Norway. On April 30, a tribunal ruled in favor of AHRIM.
International Commercial Arbitration and Foreign Courts
In 2011, the GoM, the London Court of International Arbitration (LCIA), and the Mauritius International Arbitration Center (MIAC) established a new arbitration center in Mauritius called the LCIA-MIAC Arbitration Center. LCIA-MIAC offered all services offered by the LCIA in the United Kingdom. In July 2018, the LCIA and GoM terminated the partnership, after which the MIAC began operating as an independent organization. The organization’s website has additional information: http://miac.mu/ .
Additionally, the Mauritius Chamber of Commerce and Industry’s (MCCI) Arbitration and Mediation Center (MARC) was established in 1996 as an initiative of the MCCI to provide the business community with alternative forms of dispute resolution using internationally accepted arbitral and mediation standards. More information is available via the following link: https://www.marc.mu/en .
Bankruptcy is not criminalized in Mauritius. The Insolvency Act of 2009 amended and consolidated the law relating to insolvency of individuals and companies and the distribution of assets in the case of insolvency and related matters. Most notably, the Act introduced administration procedures, providing creditors the option of a more orderly reorganization or restructuring of a business than in liquidation. A bankrupt individual is automatically discharged from bankruptcy three years after adjudication, but may apply to be discharged earlier. The Act draws on the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law in 1997. The Act can be accessed here: https://www.fscmauritius.org/media/1155/insolvency-act-2009-130114.pdf . According to the World Bank’s 2019 Doing Business report, Mauritius ranks 35th out of 190 countries in terms of resolving insolvency.