Mauritius enters the dispute business: the Indian Ocean island is trying to establish itself as a centre for international arbitration.

Author:Ackbarally, Nasseem
Position:COUNTRYFILE: Mauritius

Routinely appearing at the top of African competitiveness and business environment rankings, Mauritius has carved out a niche as a small safe haven for investors. Even here, however sometimes deals go wrong--in June last year, for example, the owners of the Mont Choisy shopping centre in Grand Baie filed a complaint against the retailer Pick n Pay, alleging that it had reneged on a long lease. Pick n Pay denied the allegations, and the case is heading for arbitration.

Arbitration is widely used as a means of dispute resolution in cross-border deals, preferred by investors to becoming entangled in domestic courts and arguments over jurisdiction. A third party arbiter, often in London, Singapore or another international financial centre, is appointed to oversee disputes, committing both parties to the same legal system--and feeding the legal profession in arbitration centres.

Mauritius, which has already established itself as a hub for financial flows and fund administration, is planning to move into the arbitration business. Now two years old, the Mauritius International Arbitration Centre (MIAC) aims to establish itself as an alternative for companies looking for an African centre for dispute resolution.

"Mauritius is popping up as a good compromise between London, Singapore, South Africa and others because it is a happy neutral ground and neutrality is very important," says Duncan Bagshaw, registrar of the MIAC.

Bagshaw says that the country has several natural advantages --it is an African country, but it is culturally diverse and closer to Asia than the rest of the continent. Its population has Francophone and Anglophone elements, and its legal system is rare in that it combines British common law and French civil law.

Perhaps more compellingly, it sits at the confluence of developed and developing markets--whereas most leading arbitration centres sit in the former. As Africa's trade shifts to include a greater focus on Asian markets--several of which have strong economic ties with Mauritius--that perceived neutrality could be very valuable, Bagshaw says.

Likewise, Mauritius' inclusion in the Tripartite Free Trade Area, which links the Common Market for Eastern and Southern Africa, the Southern African Development Community and the East African Community, could expand the country's role as a centre for fund structuring and administration for companies looking to invest regionally. The country aims to become like Singapore in Asia or...

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