The State of Mauritius & Anor v The (Mauritius) CT Power Ltd & Ors (Mauritius)

Factual and Procedural Background

Company A had been developing plans since 2006 to build and operate a coal-fired power plant in The State. In 2008 it signed a suite of agreements with Agency C (the national electricity board), all of which were expressed to be conditional upon a future “Implementation Agreement” with the Government that would include a sovereign guarantee of Agency C’s payment obligations.

To commence construction, Company A required an Environmental Impact Assessment (“EIA”) licence under the Environment Protection Act 2002. After an initial ministerial refusal, Company A succeeded before the Environment Appeal Tribunal, and on 23 January 2013 an EIA licence issued. Condition 15 of that licence obliged Company A to “provide proof of its financial capabilities … to the satisfaction of” Agency B (the Ministry of Finance).

From 2014 onward the parties negotiated the draft Implementation Agreement. Agency B insisted that the draft replicate Condition 15 and that satisfactory proof of finance be supplied. Meetings on 15–16 January 2015 produced an agreed template for a “Bank Comfort Letter”. Company A later submitted a letter from an investment firm, but Agency B rejected it as non-compliant on several grounds (lack of bank authorisation, absence of anti-money-laundering assurances, disclaimer of liability, and only one signature).

On 13 March 2015 Cabinet decided not to proceed with the project, and Agency A (the Ministry of Energy) announced it would not sign the Implementation Agreement. Company A sought judicial review, obtaining declarations from the Supreme Court that both Agencies had acted unreasonably and in breach of Company A’s legitimate expectations. The Agencies appealed to the Judicial Committee of the Privy Council (“the Board”).

Legal Issues Presented

1. Whether the judicial review proceedings were an abuse of process because Company A had an outstanding private-law damages claim.
2. Whether the decisions of Agency B (refusing to accept financial proof) and Agency A (refusing to sign the Implementation Agreement) were amenable to judicial review.
3. Whether Agency B acted unlawfully or in breach of legitimate expectation in concluding that Condition 15 was unsatisfied.
4. Whether Agency A acted unlawfully or in breach of legitimate expectation in declining to enter the Implementation Agreement.

Arguments of the Parties

Appellants' Arguments

• The judicial review was an abuse of process and should have been deferred until resolution of Company A’s private-law damages action.
• Both impugned decisions were purely commercial and therefore outside the court’s public-law supervisory jurisdiction.
• Agency B lawfully exercised its broad evaluative discretion under Condition 15; the comfort letter tendered failed multiple agreed requirements.
• Agency A bore no public-law duty to contract and, absent fraud or bad faith, was entitled to refuse to sign.

Respondents' Arguments

• The decisions were public-law in nature: Condition 15 derived from a statutory licence and the Implementation Agreement implicated governmental guarantees.
• Company A had a legitimate expectation, created during January 2015 meetings and by clause 7 of the draft agreement, that (a) its comfort letter would be accepted or (b) it would have an opportunity to remedy any perceived defects.
• Refusal to contract and rejection of the comfort letter were unreasonable, irrational and procedurally unfair.

Table of Precedents Cited

Court's Reasoning and Analysis

The Board first dismissed the abuse-of-process contention, noting that judicial review must be brought promptly and that the public-law issues (lawfulness of governmental decisions) were distinct from the tort-based faute lourde damages claim.

On amenability to review, the Board held:

• Agency B’s decision was plainly public-law: Condition 15 was embedded in a statutory licence and expressly vested Agency B with evaluative authority.
• Agency A’s refusal to sign was in principle reviewable, but only on the extremely limited grounds applicable to state commercial activity (fraud, corruption, bad faith, or breach of a clear legitimate expectation).

Turning to the merits, the Board decided:

1. Agency B acted lawfully. Condition 15 required satisfaction “to the satisfaction of” Agency B, affording a wide margin of appreciation. The proffered Avendus letter failed multiple agreed criteria (no banking licence, no AML assurance, lack of corporate authorisation, disclaimer of liability, invitation to do independent due diligence). Agency B was therefore entitled to conclude the condition remained unsatisfied.
2. No procedural legitimate expectation arose. The January 2015 meetings already allowed Company A to know and influence the required wording. There was no promise of further consultation if a non-compliant letter were submitted.
3. Agency A likewise acted lawfully. Clause 7 of the draft Implementation Agreement and its accompanying note were proposals from Company A, expressly “subject to contract”, and could not constitute an unqualified governmental assurance. Absent fraud, corruption or bad faith—and given the unresolved financing concerns—Agency A was free to decline to contract.

The Supreme Court had therefore erred in granting declarations against both Agencies.

Holding and Implications

APPEAL ALLOWED. The Board set aside the Supreme Court’s declarations and dismissed the judicial review claims.

Immediate effect: Company A gains no public-law relief; Condition 15 remains unsatisfied and the Government need not sign the Implementation Agreement. Broader implications: the decision re-affirms the narrow scope for judicial review of governmental commercial dealings, emphasising that only clear, unqualified promises can found legitimate expectations and that public bodies retain wide discretion when negotiating contracts in the public interest.