Security For Costs

On 2 August 2017, the Industrial Court of Mauritius (Industrial Court) awarded a historic amount of MUR 100,000 [± USD 3,000] as security of costs. This decision is significant in three respects. Firstly, it highlights the readiness of the Industrial Court to adjust to the changed Mauritian employment landscape which now accommodates an increasing number of foreign employees at all levels of an enterprise and uphold their statutory employment rights or under Mauritius law generally. Secondly, against this landscape, this decision reflects a conscious effort by the Industrial Court to balance the equally important right of employers to be guarded against the risks of what may turn out to be non-meritorious employment claims. Finally, the amount awarded is the first of its kind as it is the first time that such an amount has been awarded by the Industrial Court.

Appleby appeared for ATSL and was represented by Sharmilla Bhima (Counsel) and Dushyant Ramdhur (Senior Associate).


Security For Costs

On 23 October 2017, the Supreme Court of Mauritius (Supreme Court) reiterated two Mauritius law principles in relation to the question of security for costs. Firstly, security for costs was only triggered when a foreigner was a claimant to a contentious matter, not a defendant in proceedings. Secondly, it had to be raised as a point of law (i.e. in limine litis). This therefore meant that, as a matter of procedure, it could not be raised after the completion of the exchange of pleadings. In the present matter, the Supreme Court set aside the application for security for costs that was raised in a counterclaim inasmuch as the foreign party was a defendant to the counterclaim action and the application for security for costs was lodged after the close of pleadings.


Derivative Actions

On 17 August 2017, the Supreme Court addressed issues relating to derivative actions that were contemplated under section 170 of the Companies Act 2001 (as amended). It held that even though no orders had been claimed against parties who were shareholders in proceedings, nevertheless their presence was necessary to adjudicate on derivative actions. This was because by reason of their status as shareholders of a company, "any matter which concerns the running or status of that company should be a concern for [them]. They, as such, have a direct interest in how the affairs of the [Mauritian company]are being conducted." The Supreme Court also addressed a secondary issue that arose namely, the description of the parties in proceedings. The Supreme Court held that "the insertion of an incorrect name of a party is not fatal." it went further and stated that test to be applied in the circumstances was "whether there is a mistake as to the name of the party or as to the identity of the party" as laid down in Devraz Anthoogadoo v The Municipal Council of Beau Bassin-Rose Hill 2010 SCJ 212. Thus, "the key question is to ask whether it is possible to identify the intending plaintiff by reference to a description more or less specific to the particular case. Consequently, if the right description is given and this can be ascertained from the particular case, but only the wrong name is used, there is unlikely to be any doubt about the identity of the plaintiff."


Restoration of a company

On 20 July 2017, the Supreme Court confirmed that, as a matter of procedure, the court which has jurisdiction under section 320 of the Companies Act 2001 to entertain an application to restore a company on the roll of companies in Mauritius, is the Bankruptcy Division of the Supreme Court. On the question of fulfilling the conditions of the Companies Act 2001 for restoration, the Supreme Court made two important findings. Firstly, it confirmed that once an application is lodged before the Mauritian Registrar of Companies to restore a company, there is an estoppel that operates by which the Registrar of Companies is not authorised to proceed with the restoration and it is then open to a party mentioned under section 320 of the Companies Act 2001 to apply to the Supreme Court in order to have the company restored. It is erroneous to take the view that by reason that an objection has been lodged before the Mauritian Registrar of Companies the Supreme Court thereby lacks jurisdiction to entertain an application to restore a company. Secondly, section 320 of the Companies Act 2001 has granted wide powers to the Supreme Court when dealing with applications to restore a company and that it will grant such applications where it is satisfied that "it is just and equitable to restore the company to the register."

Appleby successfully applied for the restoration of a Mauritian company. As outlined in Assama (supra), under the Companies Act 2001, another possible action for restoring a company on the register of the Mauritian Registrar of Companies, is to apply directly to the Registrar of Companies. The case concerned a Mauritian company, licensed by the Financial Services Commission of Mauritius (FSC) as a Category 2 Global Business License company under the Financial Services Act 2007 (FSA), that had been struck off the register of companies maintained by the Registrar of Companies, as the annual fees had not been paid and the management company had resigned without informing the sole shareholder or any of the directors, but only the Registrar of Companies. In this regard, the Companies Act 2001 is enabling in nature as it does not lay down any guidelines as to the yardstick applied by the Registrar of Companies in making her determination. Such applications are thus considered on a case-to-case basis. However, the principles that may be retained from the instant matter are as follows (i) the Registrar of Companies will use her discretion to restore provided the reasons are justified (ii) the application may be lodged by a shareholder in which the full justifications for restoration is supported by the relevant evidence (iii) the applicant must confirm that any outstanding fees will be paid by them for and on behalf of the company and (iv) in the particular case evidence had to be submitted that the shareholder had identified another management company which had agreed to step in so that the Mauritian company would comply with the requirement of the FSA that all global business companies are administered by a management company licensed by the FSC.

Appleby was represented by Sharmilla Bhima (Counsel) and Malcolm Moller (Managing Partner).


Application to Set Aside a Statutory Demand

On 5 July 2017, the Bankruptcy Division of the Supreme Court confirmed issues that arose in relation to substance. First, section 181 of the Insolvency Act 2009, which lists the criteria for lodging an application to set aside a statutory demand, neither captures a secured creditor nor the existence of security as one of these criteria. Secondly, section 181 of the Insolvency Act 2009 had conferred wide discretion on the Bankruptcy Division of the Supreme Court on matters relating to the setting aside of a statutory demand. Finally, the Bankruptcy Division of the Supreme Court addressed its mind to the meaning of the phrase 'substantial dispute' which is one of the criteria to be satisfied. It held that when determining this criterion, the court is not expected to 'embark upon any extended enquiry in order to determine whether there is a genuine dispute between the parties and certainly will not attempt to weigh the merits of that dispute. All that the legislation requires is that the Court conclude that there is a dispute and that it is a genuine dispute.'

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