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MAURITIUS CT POWER LTD v THE MINISTRY OF FINANCE AND

ECONOMIC DEVELOPMENT & ORS


2016 SCJ 261
Record No: 111762
THE SUPREME COURT OF MAURITIUS
In the matter of:
The (Mauritius) CT Power LTD
Applicant
v.
1.
2.

The Ministry of Finance and Economic Development


The Ministry of Energy and Public Utilities
Respondents

In the presence of:


1.
The Honourable Minister of Energy and Public Utilities
2.
The Honourable Minister of Finance and Economic
Development
3.
The Ministry of Environment, Sustainable Development,
Disaster and Beach Management
4.
The State
5.
The Central Electricity Board
Co-respondents
JUDGMENT
1.

On 16 July 2015, we granted leave to the applicant company (CT Power) to

enter the present application for the judicial review of the refusal of respondent no. 1
(the Ministry of Finance and Economic Development) to confirm that CT Power has
complied with condition 15 of the Environment Impact Assessment (EIA) licence
issued to it for the setting up of a 2 x 55 MW coal fired power plant at Pointe aux
Caves, Albion and of the refusal of respondent no. 2 (the Ministry of Energy and
Public Utilities) to execute an agreed version of an Implementation Agreement
between the Government of Mauritius and CT Power.
2.

The factual background to the present application has been partly set out in

our judgment granting leave. However, it is useful to summarise it again especially in


the light of the affidavit evidence which has now been filed on behalf of the Ministry of
Finance and Economic Development and the Ministry of Energy and Public Utilities

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and also on behalf of co-respondents nos 1, 2 and 5 (the Minister of Energy and
Public Utilities, the Minister of Finance and Economic Development and the Central
Electricity Board (CEB) respectively).
The factual background
3.

CT Power is a private company incorporated on 15 March 2006. The

company applied to the Board of Investment of Mauritius (BOI) for the setting up of a
3 x 50 MW coal power station to meet the countrys demand for electricity. The BOI
is set up under the Investment Promotion Act. Under section 7(b) of the Act, it may
act as Governments representative in coordinating, facilitating and implementing
public private partnership projects.
4.

By a letter of intent dated 21 April 2006, the BOI informed CT Power that

pursuant to section 15 of the Investment Promotion Act, an Investment Certificate,


Power Industry would be issued to it upon the fulfilment of certain terms and
conditions. Among the terms and conditions set out in the letter are two conditions
which are relevant to and material for the present application. The two conditions are
as follows: (1) a Power Purchase Agreement is to be signed between the CEB and
CT Power with respect to the purchase of electricity from CT Power and (2) an EIA
licence is to be obtained from the Department of Environment. By agreement, the
Project was later changed to a 2 x 55 MW coal fired power station to be situated at
Pointe aux Caves.
The Implementation Agreement.
5.

Pursuant to the requirement of the BOI, in December 2008, CT Power and

the CEB signed a Power Purchase Agreement, a Coal Supply Agreement and an
Interconnection Facilities Design and Build Agreement. Under the Power Purchase
Agreement, the CEB agrees to purchase and CT Power agrees to sell the Contract
Capacity and Contract Energy generated by the power station. It is the contention of
CT Power that under the same Agreement, the Government of Mauritius is also
willing to guarantee the payment obligations of the CEB. It is recalled here that
under section 3 of the Central Electricity Board Act, the CEB is responsible for the
control and development of the electricity supplies generally in Mauritius.

We

however, have not been favoured with a copy of the Power Purchase Agreement of
which we have not had sight.

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6.

In the further contention of CT Power, after the signature of the Power

Purchase Agreement, it started the process of negotiating the terms of an


Implementation Agreement, as required in the Power Purchase Agreement.

CT

Power also contends that the Ministry of Energy, as the parent Ministry of the CEB,
which itself signed the Power Purchase Agreement in pursuance of its statutory
functions and duties, was required to provide guarantees in favour of CT Power
regarding the payment obligations of the CEB under the Power Purchase Agreement,
which guarantees were to materialize by the signature of the Implementation
Agreement.
7.

CT Power further states that as far back as January 2009, the main terms of

the Implementation Agreement have been settled with the representatives of the
Ministry of Energy. After several consultations and amendments, a final agreed draft
was circulated on 21 July 2014 (Annex 19 refers).
8.

The stand of the Ministry of Energy on the Implementation Agreement is set

out in the affidavit of the Assistant Permanent Secretary dated 22 September 2015
and filed on behalf of the Ministry of Energy and the Minister of Energy. The Ministry
of Energy states that it does not provide any guarantee for the payment obligations of
the CEB. It also states that the draft circulated on 21 July 2014 was still not final as it
was subject to the approval of Government and the Ministry of Finance. It further
states that in the course of meetings of 15 and 16 January 2015, CT Power was
informed that the signing of the Implementation Agreement was subject to the
submission of a Letter of Comfort as regards the financing of the Project.
Condition 15 of the EIA licence
9.

As stated above, the BOI also required that CT Power obtains an EIA licence

from the Department of Environment.

On 18 January 2011, the Director of

Environment rejected the application of CT Power for an EIA licence. Following a


successful appeal to the Environment Appeal Tribunal from the decision of the
Director, CT Power was on 23 January 2013, granted an EIA licence to set up a
2 x 55 MW Coal Fired Power Plant on a plot of land of an extent of 92A leased to the
Central Electricity Board (CEB) at Pointe aux Caves in the districts of Black River and
Port Louis. Condition 15 of the EIA licence reads as follows:
The proponent (i.e CT Power) shall undertake to provide proof of its

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financial capabilities for the duration of the project to the satisfaction of
the Ministry of Finance and Economic Development.
10.

The reason for the insertion of the above condition 15 to the EIA licence is

found in the reply made by the then Minister of Finance and Economic Development
to a Parliamentary Question at the National Assembly on 25 March 2014. The reply
is set out at paragraph 35(b) of the affidavit of 22 September 2015 filed on behalf of
the Ministry of Energy.
11.

The then Minister of Finance and Economic Development informed the

National Assembly that it was at the request of the Cabinet that condition 15 was
added to the EIA licence. The Minister also stated that his understanding was that it
is quite unusual.uncommon to have such a condition included in an EIA licence.
The Minister further informed the Assembly that in a letter dated 17 December 2013,
CT Power has confirmed to the CEB that it undertakes to provide proof of its financial
capabilities at the financial close of the project. The Minister reassured the Assembly
that in this exercise, (his) Ministry will ensure that the promoters provide all
information on the shareholders and other financiers as well as their sources of
financing in an acceptable and transparent manner.
12.

Be it as it may, the insertion of condition 15 to the EIA licence is not disputed

by CT Power. Indeed in furtherance of complying with condition 15, CT Power has


secured, since 10 October 2014, a letter from two major international banks, namely
Bank of America and Bank of India for the debt finance of the Project. Annex 11 is a
copy of the letter from the two banks. The letter is to the effect that each of Bank of
India, together with its affiliates (Bank of India) and Bank of America, N.A., together
with its affiliates (BANA), are interested.. in providing The (Mauritius) CT Power
Limited financing of up to USD 140.00 million, each acting severally and on an
underwritten basis, out of the total requirement of USD 280.00 million. The letter
contains the cautionary provision that it is not intended to contain an offer, agreement
or commitment by the banks to provide the financing. It also requests CT Power to
provide a copy of the Implementation Agreement to be executed between CT Power
Ltd and the Ministry of Energy and Public Utilities.
13.

The letter of 10 October 2014 was submitted to the Ministry of Energy and

Public Utilities on 14 October 2014.

It appears that the letter remained without

response. At any rate, none of the parties has referred to a response, if there was

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one.
The events after December 2014 and the various statements made by The
Minister of Energy.
14.

From the various statements made by the Minister of Energy to the press

after December 2014 and the questions put to the latter, the fate of the Project, was
of great general and public interest.
15.

After the general elections of December 2014, in an article published in the

issue of 27 December 2014 of the daily newspaper Le Mauricien, the new Minister of
Energy and Public Utilities reportedly stated that it was his understanding that all
contracts concerning the CT Power Project had been signed and that there remained
only the financial aspect to be finalised. The Minister also stated that he would be
guided by the Attorney General as to legal implications of the Project.
16.

On 15 and 16 January 2015, in connection with section 15 of the EIA licence,

the representatives of CT Power met the Financial Secretary and representatives of


the Ministry of Finance.

A representative of the Attorney Generals Office also

attended the meetings. According to the Ministry of Finance, in the course of the
meetings, after a draft comfort letter was proposed by the Financial Secretary, a final
draft of the Bank Comfort Letter of the required format was agreed upon by CT
Power and the Ministry of Finance. The Bank Comfort letter is to confirm that CT
Power has the financial capabilities to meet its equity contribution. Annex 14 is a
copy of the said final Bank Comfort Letter. According to CT Power, the final draft
was subject to the caveat that the issuer of the comfort letter could vary, amend or
modify the terms discussed in order to comply with applicable regulations and legal
advice (see paragraph 35 of the affidavit of CT Power dated 23 July 2015).
However, according to the Ministry of Finance, the letter did not provide for any
variation, amendment or modification (see paragraph 12 of the affidavit of the
Ministry of Finance dated 7 September 2015).
17.

On 27 February 2015, CT Power obtained a comfort letter of even date from

Avendus Capital (UK) Private Limited for its equity finance up to an amount of USD
41 million. Avendus is a wholly owned subsidiary of Avendus Capital Pvt Ltd (India)
and is regulated by the UK Financial Conduct Authority. On the same day, a copy of
the letter from Avendus was despatched to the Ministry of Finance. Annex 15 is a

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copy of the letter from Avendus.
18.

On 3 March 2015, following a private notice question from the Leader of the

Opposition and referring to condition 15 of the EIA licence, the Minister of Energy
stated at the National Assembly that:
As at today, the promoter has not met this condition.
On 6 February 2015, Government has decided that the company
should state its source of funding, within a reasonable delay, failing
which the project would not be implemented. Up to now, no letter of
comfort has been communicated. Insofar as my Ministry is concerned, it
intends to recommend to Cabinet that Government does not go ahead
with the project.
19.

CT Power contends that it has not been made aware of any decision taken on

6 February 2015 by Government to the effect that CT Power should state its source
of funding. No meeting was held with the representatives of CT Power on or about 6
February 2015. Indeed, apart from the statement of the Minister at the National
Assembly, there is no supporting evidence of such a decision of Government
produced by either the Ministry of Finance or the Ministry of Energy.
20.

On 5 March 2015, the Minister of Energy stated at the National Assembly that

his Ministry had received an email from Dato M Subramaniam on behalf of CT


Power, informing it that the letter of comfort from Avendus had been sent on 27
February 2015 and enclosing copy of the letter. The Minister informed the Assembly
that he consulted the Minister of Finance who agrees that the letter is not a letter of
comfort as required by Government.
The decision of Government not to proceed with the Power Plant Project.
21.

On Friday 13 March 2015, the website of the Prime Ministers Office

published the following Cabinet decision taken;


Cabinet has decided not to proceed with the power plant project of
the Mauritius CT Power Ltd at Pointe aux Caves taking into consideration
the circumstances surrounding the award of contract and the failure of the

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promoters of the project to submit evidence of their financial capacity or
the sources of funding. Government would consider other feasible options,
with necessary transparence and clarity, to meet electricity demands for
the period 2015 - 2019 and ensure energy security for Mauritius.
22.

Subsequently, on 1 April 2015, the Minister of Energy confirmed at the

National Assembly;
CT Power is one thing. We took the decision that we took on the
basis of the financial capabilities of CT Power.
23.

Further, on 2 April 2015, The Minister of Energy stated in The National

Assembly:
The only thing that has happened on CT Power is that
Government has refused to sign an implementation agreement which
would, in effect, guarantee the obligations of CEB. Why? Because CT
Power could not establish its financial capabilities to our satisfaction! I
have discussed this with The Honourable Minister of Finance and
Economic Development, we were of the same view and we have said,
we are not going to sign the implementation agreement.
The grounds invoked for review
24.

The case for the judicial review of the decisions of The Ministries of Finance

and of Energy is set out at paragraph 71 of the affidavit in support of the application
as follows:
71.1

In relation to condition 15 of its EIA licence, the Ministry of

Finance has acted unreasonably, unfairly, irrationally and has acted on


the basis of irrelevant considerations in refusing to:
71.1.1 further engage with CT Power;
71.1.2 consult CT Power before taking its decision despite having itself
suggested the wording of the comfort letter;

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71.1.3

allow CT Power to make representations before taking any

decision;
71.1.4 reply to the notices of CT Power;
71.1.5

acknowledge that condition 15 of the EIA licence has been

satisfied having regard to the letters from Bank of America and the Bank
of India for the debt finance of the project and from Avendus for the
equity finance.
71.2

In relation to the refusal of the Ministry of Energy to sign the

Implementation Agreement on the vexatious ground that the proof of


financial capabilities has not been satisfied in compliance with condition
15 of the EIA licence, The Ministry of Energy has acted ultra vires,
unreasonably, unfairly, irrationally, in bad faith and has acted on the
basis of irrelevant considerations with a view to thwart the legitimate
expectation of CT Power to bring the project to its fruitful conclusion.

The jurisdiction of the Court


25.

Before we deal with the objection raised as to the jurisdiction of the Court to

hear the present application, we shall deal briefly with a submission made on behalf
of the Ministry and Minister of Energy. It is submitted that proceedings in Parliament
or for that matter at the National Assembly ought not to be questioned in any Court of
law or place out of Parliament for the purpose of drawing conclusions or inferences.
To this submission, we may observe that there is no dispute that for all intents and
purposes and at least from the perspective of Government, the Project has come to a
halt. CT Power has not been informed directly but indirectly by way of statements at
the National Assembly on 1 and 2 April 2015. Hence, the heavy reliance by CT
Power on statements made at the National Assembly.
26.

Now, it is also submitted on behalf of the Ministry of Energy and the Minister

of Energy that the impugned decision of the Ministry and of the Minister is not
amenable to judicial review. The reason invoked is that the execution, delivery and
performance of the Implementation Agreement constitute a private and commercial
act and create essentially private law obligations. In the result, it is submitted that

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breach of such private law obligations will incur liability to private law and not public
law remedies. Accordingly, the refusal to execute the Implementation Agreement is
not judicially reviewable.
27.

In support of the above submission, Mrs C. Green-Jokhoo, Assistant

Parliamentary Counsel, for the Ministry of Energy and the Minister of Energy has
referred us to the Draft Implementation Agreement which requires Government,
acting through the Ministry of Energy and the Minister of Energy, to among other
tasks, irrevocably and unconditionally guarantee to CT Power jointly and severally
with CEB, as co-principal debtor, the due and punctual performance of each of CEBs
payment obligations contained in the Power Purchase Agreement (see clause 4 of
the Draft Implementation Agreement at Annex 19).

Providing a guarantee is a

private

further

and

commercial

one

which

in

the

submission

of

Mrs C. Green-Jokhoo, does not fall within the statutory functions of the Ministry and
the Minister.
28.

Mrs C. Green-Jokhoo also seeks reliance on the decision handed down by

the High Court of England and Wales in The Queen on the application of Gamesa
Energy UK Limited v The National Assembly for Wales [2006] EWHC 2167 and
more specifically on two citations in the said judgement. The first citation is from the
speech of Lord Templeman in the decision of the Privy Council in Mercury Energy
Limited v Electricity Corporation of New Zealand [1994] 1 WLR 521. It is as
follows:
It does not seem likely that a decision by a state enterprise to enter into
or determine a commercial contract to supply goods or services will ever
be the subject of judicial review in the absence of fraud, corruption or
bad faith. (Emphasis added).
29.

The second citation is from Glidewell L.J in the decision of the Court of

Appeal in Mass Energy Limited v Birmingham City Council [1994] Env LR 298 in
which the amenability to judicial review of a tendering process conducted by a local
authority was considered. The citation is as follows:
On its face, this is really a commercial dispute between a successful and
an unsuccessful tenderer; a situation which is not, of course, at all
uncommon. If there were no statutory requirement that the city council

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should enter into a contract for its waste disposal operations, and
particularly the construction of the incinerator to be the subject of a
contract entered into by tender, but if the council had sought voluntarily to
enter into a contract by tender deciding to adopt that process of its own
volition, then in my view there should be no public element in such a
dispute at all. Mass Energy could only hope to bring an action against the
council on some contractual basis, for instance, if they could persuade a
court that there was some implied term which entitled them to recover the
wasted costs of tendering.
30.

To these two citations, we shall come back later.

31.

Mr R Chetty SC for the CEB joins in with Mrs C. Green-Jokhoo and submits

that the refusal to execute the Implementation Agreement is not amenable to judicial
review. In Mr R Chettys submission, the execution of the Implementation Agreement
is a private and commercial act. Furthermore, this appears to be intended by the
parties under Clause 12.7 of the draft Implementation Agreement which reads as
follows:
12.7

Waiver of Sovereign Immunity


The GOM unconditionally and irrevocably;

(a) agrees that the execution, delivery and performance by it of this


Agreement and those agreements or documents to which it is a party
constitute

private

and

commercial

acts

rather

than

public

or

governmental acts and waives, any right of immunity whch it or any of its
assets now hasor may acquire in the future in any jurisdiction;
32.

Clause 12.7 constitutes a compelling reason, in Mr R Chettys submission,

why the refusal of executing the Implementation Agreement is not amenable to


judicial review. Mr R Chetty SC cites in support the following from the decision of the
Privy Council in Jeewan Mohit v The Director of Public Prosecutions of
Mauritius [2006] UKPC 20;
In R v Panel on Take-Overs and Mergers, Ex p Datafin PLC (1987) QB
815,847, Lloyd L.J observed that If the source of power is a statute, or

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subordinate legislation under a statute, then clearly the body in question
will be subject to judicial review.

It is unnecessary to discuss what

exceptions there may be to this rule, which now represents the ordinary if
not the invariable rule. Thus the Board should approach the present
issue on the assumption that the powers conferred on the DPP by
section 72(3) of the Constitution are subject to judicial review, whatever
the standard of review may be, unless there is some compelling
reason to infer that such assumption is excluded. (Emphasis
added).
33.

On the principles whether a contract entered by a public authority is judicially

reviewable, Mr R Chetty SC also refers us to the text book De Smiths Judicial


Review Seventh Edition at 3-053 to 3-062 on Amenability of Functions Relating
to Pre- Contractual and Contractual Powers.
34.

The extract referred to takes cognisance of the ever increasing recourse in

England and Wales by public authorities to enter into a wide range of contracts to
equip themselves to carry out their basic functions, including employment contracts
and supply of goods and services to the authority (see paragraph 3-054). It is also
observes that (At) national level, a strategic policy of Public Private Partnerships
(PPP) has been promoted as one means of providing capital investment for public
services. This entails various kinds of private sector ownership of formerly wholly
state-owned functions; the Private Finance Initiative (PFI) under which private sector
business takes responsibility for providing public services, including providing and
maintaining the necessary infrastructure; and the marketing of government services
to the private sector(see paragraph 3-055).
35.

Indeed, in our view, the project of CT Power to build, operate and maintain

the coal power plant and to supply electricity to the CEB is akin to the public and
private partnership referred to above. It is apposite to note that in the letter of intent
issued to CT Power on 21 April 2006, the BOI informs CT Power that further to a
policy decision of the Ministry of Public Utilities, acting under section 13 of the
Investment Promotion Act, it approved the Project of CT Power.
36.

Further, in our view, the following extract from De Smith at paragraph 3-056 is

also relevant. It reads as follows: the range and growth of contractual relationships
in the public sector has presented a challenge for judicial review law. The current

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position on amenability to judicial review of situations involving contracts is the
product of two policies. The learned authors state that the first policy is to recognise
that contractual disputes are to be settled according to the principles of the law of
contract. However, the existence of a possibility of a private law claim does not by
itself, however, make judicial review inappropriate. The other policy therefore is to
recognise that in certain cases, the supervisory jurisdiction by way of judicial review
of the Court is called for.
37.

The learned authors conclude As in other contexts, in working out whether a

decision is susceptible to judicial review the Court considers two main factors. It will
have regard to the source of power under which the impugned decision is made. If
this is purely contractual, judicial review is unlikely to be appropriate; some close
statutory (or prerogative) underpinning of the contract will normally be needed.
Alternatively, the Court may consider whether the function being carried out by the
defendant is a public function.

Having decided that a decision is susceptible to

judicial review, the Court will go on to examine the grounds advanced by the
claimant for the decisions unlawfulness.
38.

In the absence of any local statute or rule of Court governing judicial review,

this Court has drawn and continues to draw inspiration from principles laid down in
English cases (see Augustave v Mauritius Sugar Terminal Corporation and
Issurey [1990 MR 222]). The public law and private law divide has been considered
by this Court. Most of the cases appear to have arisen out of employment contracts
entered into by the State or parastatal bodies.
39.

There are however two cases where the legality of the decisions of the public

authority in question to award in contracts for services was in issue. In Biwater PLC
v The Central Water Authority & Ors [2000 SCJ 166], the Court seems to have
retained the view conceded by the respondents and co-respondent that judicial
review would in principle lie against the decision of the Central Water Authority since
there is plainly a public interest element that has been injected into the contract
awarded for the management of water resources of the country by a state or
parastatal enterprise.

The application for leave for judicial review was however

refused by the Court since it did not disclose an arguable case. In the other case
Atlas Communication International Co Ltd v The Central Electricity Board [2005
SCJ 104], the applicant, an unsuccessful tenderer, applied for leave for a judicial
review of the decision of the Board on the grounds that it was ultra vires, illegal,

13
unfair and unreasonable. To a preliminary point raised that the subject matter of the
review was a private contract having no public law element, the Court had this to say:
Indeed the respondent has the monopoly of supply of electricity
in Mauritius - vide sections 3 and 10 of the Central Electricity Board Act
(the Act). It operates as a non profit making enterprise and pursuant to
section 20(1) of the Act prices charged for the supply of electricity are to
cover the cost of production, the amounts required for the redemption of
loans and allocation of reserves. The affairs of the respondent including
its entering into substantial contractual obligations with commercial firms
for the supply of equipment it may need to ensure that its statutory duty
to supply electricity to the public is carried out efficiently, must therefore
be conducted with utmost transparency and fairness.

Accountability

before the Court by way of judicial review of its decisions must therefore
be preserved, especially where it is claimed that the respondent has
transgressed its own procedural rules when allotting a contract.
40.

The pronouncements of this Court in Biwater (supra) and Atlas

Communication (supra) are, in our view, clearly in alignment with the principles laid
down on the matter by the Courts in England and Wales and as explained in De
Smith. Firstly, the source of power under which the impugned decision is taken is
examined. If the source of power of the authority is a statute or a prerogative, then
judicial review will normally lie. Secondly, judicial review is also to ensure that the
rule of law is respected and to prevent abuse of power. Accordingy, where it is the
case of an applicant that a decision or a decision making process is tainted with
procedural impropriety or irrationality or illegality, the Court will recognise a public law
element as a body drawing its powers from a statute or a prerogative must observe
the rules of natural justice.

The decision and the decision making process will

therefore be amenable to judicial review.


41.

Turning to the present application, the Minister of Energy on whose behalf the

point of jurisdiction is taken, is assigned under section 62 of the Constitution


responsibility for the conduct of the business of Government including responsibility
for the administration of the Ministry. The decision of the Minister and/or the Ministry
not to sign the Implementation Agreement has therefore a public law element. Also
at the heart of the application of CT Power are allegations of irrationality and
illegality.

It cannot therefore be said that the refusal to sign the Implementation

14
Agreement can only give rise to private law remedies. The two citations from the
case of Mass Energy (supra ) referred to above far from supporting the submission
of Counsel for the Ministry and Minister of Energy lend support to the view that
judicial review will lie in the present matter to the extent that bad faith is being
invoked.
42.

We have also considered the submission of Mr R Chetty SC on Clause 12.7

of the Implementation Agreement.

We note that Clause 12.7 has as heading

Waiver of Sovereign Immunity. Under clause 12.7, the Government of Mauritius is


waiving its state immunity only.

Clause 12.7 cannot be extended to oust the

supervisory function and jurisdiction of the Court in claims of abuse of power against
public authorities.
43.

The objection to the jurisdiction of the Court in the present matter therefore

fails.
The refusal to sign the Implementation Agreement
44.

Coming to the application, we shall first deal with the refusal to sign the

Implementation Agreement. On the unreasonableness of the refusal of the Minister


of Energy to sign the Implementation Agreement, CT Power relies strongly on Clause
7 of the draft dated 21 July 2014 (Annex 19 refers). Clause 7 is to the following
effect:
7.

CONDITION
7.1

The GOM and THE (MAURITIUS) CT POWER LTD

hereby acknowledge and accept that this Agreement is subject to THE


(MAURITIUS) CT POWER LTD providing proof of its financial
capabilities for the duration of the Project to the satisfaction of the
Ministry of Finance and Economic Development within nine (9) months
from the date of this Agreement.
7.2

For the avoidance of doubt, THE (MAURITIUS) CT

POWER LTD shall be deemed to have satisfied the Condition and as


stipulated in condition 15 of the EIA Licence by achieving Financial
Close.

15

7.3

In the event the condition set out in Clause 7.1 is not met

within nine (9) months from the date of this Agreement, the Parties
agree that this Agreement and the guarantee created hereunder shall
lapse and be of no further effect and thereafter, the Parties will have no
claims of any kind whatsoever against each other with respect to matters
arising out of or in connection with this Agreement. (Emphasis added)
45.

It is appropriate to put into context the importance of the signature of the

Implementation Agreement, at least from the perspective of CT Power. According to


CT Power, the signing of the Implementation Agreement, the draft of which had
been circulated in agreed form ever since 21 July 2014, is a critical security
document which lenders have to see in its final form before issuing an expression of
interest to meet the funding requirements of the project and/or the final sanction of
the funding facilities be it debt or equity (see paragraph 61 of the affidavit on behalf
of CT Power dated 23 July 2015).
46.

We take into consideration the stand of the Ministry and Minister of Energy

that the Draft Implementation Agreement of 24 July 2014 was subject to its approval
and to that of the Ministry of Finance. However, it appears from Annex 19 that the
draft was also a Joint Discussion Draft between MCTP (i.e CT Power) and Ministry
of Energy and Public Utilities on 18.7.2014). In any event, there does not appear
that there was any dispute thereafter as to the terms of the Agreement.
Consequently, unless it can be shown that the contrary holds, there is a legitimate
expectation that the parties will adhere to Condition 7 which states that CT Power is
to provide proof of its financial capabilities within nine (9) months from the date of the
Agreement.
47.

There is also the statement made on behalf of the Ministry that CT Power was

informed in the course of meetings held after 5 December 2014 that the signing of
the Implementation Agreement would be subject to the submission of a letter of
comfort. The affidavits exchanged refer to a meeting on 15 January 2015 where the
representatives of CT Power had a meeting with the Minister of Energy and his
officers. CT Power denies that it was raised at that meeting that the signing of the
Implementation Agreement would be subject to the submission of a comfort letter as
to the financial capabilities of CT Power. It appears that no written communication of
any decision, if decision there was, to the new condition imposed by the Ministry of

16
Energy and agreed upon by CT Power.
48.

In the result, there is substance in the contention of CT Power that the refusal

of the Ministry of Energy to sign the Implementation Agreement is unreasonable,


unfair and against the legimate expectation of CT Power.
The refusal of the Ministry of Finance to confirm that CT Power has complied
with condition 15 of the EIA licence.
49.

Mr D Basset SC submits on behalf of CT Power that the company has the

legitimate expectation to procedural fairness from the Ministry of Finance and the
Minister. The elements of this procedural fairness are set out in paragraphs 71.1.1 to
71.1.4 of the affidavit in support of the application and are reproduced above.
50.

Mr D Basset SC relies and has referred us to the decision in Regina v North

and East Devon Health Authority ex parte Coughlan [2001] QB 213 where at
paragraphs 55 to 82, the principle of legitimate expectation and the Courts role are
examined extensively by the Court of Appeal of England and Wales.
At paragraphs 55 and 56, the Court of Appeal states:
55.

it is necessary to begin by examining the

Courts role where what is in issue is a promise as to how it would


behave in the future made by a public body when exercising a statutory
function. In the past it would have been argued that the promise was to
be ignored since it could not have any effect on how the public body
exercised its judgment in what it thought was the public interest. Today
such an argument would have no prospect of success.
56.

What is still the subject of some controversy is the Courts role

when a member of the public, as a result of a promise or other conduct,


has a legitimate expectation that he will be treated in one way and the
public body wishes to treat him or her in a different way.

Here the

starting point has to be to ask what in the circumstances the member of


the public could legitimately expect. In the words of Lord Scarman in In
Re Findlay [1985] AC 318, 338. But what was their legitimate
expectation? Where there is a dispute as to this, the dispute has to be

17
determined by the Court, as happened in In Re Findlay.

This can

involve a detailed examination of the precise terms of the promise or


representation made, the circumstances in which the promise was made
and the nature of the statutory or other discretion.
51.

On the legitimate expectation of procedural fairness which is invoked on

behalf of CT Power -, the Court of Appeal states at paragraph 57.


the Court may decide that the promise or practice
induces a legitimate expectation of, for example, being consulted before
a particular decision is taken. Here it is uncontentious that the Court
itself will require the opportunity for consultation to be given unless
there is an overriding reason to resile from it (see Attorney General of
Hong Kong v Ng Yuen Shiu [1983] 2 AC 629) in which case the Court
will itself judge the adequacy of the reason advanced for the change in
policy, taking into account what fairness requires. (Emphasis added)
52.

In the case of Attorney General of Hong Kong, the question was whether

the respondent, an illegal immigrant from Macau could rely on the promise made on
behalf of the Government of Hong Kong that a hearing would be granted to all illegal
immigrants from Macau before a decision was reached. The Privy Council held that
the Government of Hong Kong was bound by the promise and that the respondent
had not been given an opportunity to put his case for an exercise of discretion
in his favour before a decision was reached.

The order for the removal of the

respondent from Hong Kong was accordingly quashed.


53.

In the present application, at paragraph 13 of the affidavit dated 7 September

2015 and filed on behalf of the Ministry and Minister of Finance, five reasons are
given as to why according to the Ministry, the letter of Avendus dated 27 February
2015 does not meet the requirements of the Bank Comfort Letter requested by it.
They are as follows:
(a)

there was no licence number of the bank on face (sic) of

the letter of comfort to indicate that the bank is operating under a banking
licence;
(b)

the letter of comfort did not contain any assurance that

18
the equity contribution shall not originate from funds in breach of anti
money laundering legislations and not be of tainted origin;
(c)

the letter of comfort was not authorized by a resolution of

the Bank and the seal of the bank did not appear on the letter and
therefore it failed to provide an assurance that the matter has been
considered at the highest level and authorised by the bank;
(d)

the letter from Avendus absolved it from any legal liability

in respect of its comfort and is intended for information purposes only;


and
(e)

the letter from Avendus requires a person interested in the

transaction to perform its own diligence and reach its own conclusion,
and as such the letter does not provide the required comfort to the
satisfaction of respondent no 1.
54.

The reply of CT Power to the above is as follows:

(a)

There was and is no requirement that the comfort letter should

bear the licence number of the bank and/or the financial institution. In
any event, for any reasonable person minded to act diligently, a search of
the Financial Services Register of UK Financial Conduct Authority at
fca.org.uk would reveal that Avendus is indeed registered and regulated
by the said Authority.

(b)

No bank would give a commitment about future sources of

funding unless it would actualy provide the funding itself. It is at the time
of transfer ie at the point at which a monetary transaction is effected that
CT Power would be required to disclose its source of funds. Under anti
money laundering legislation, regulatory authorities require source of
funds to be ascertained only at the time of transfer.
(c)

There cannot be a requirement that the letter of comfort be

authorised by a bank resolution, which is an internal matter for the bank.

(d)

The purpose of the comfort letter was to inform the Ministry of

19
Finance that CT Power had the financial capabilities to finance the
Project in the light of condition 15 of the EIA licence.

(e)

The disclaimer which is to the effect that persons interested in the

Transaction should perform their due diligence in respect of and reach


their own conclusions wth regards to CT Power, is a standard one.
55.

Now, it is only in the exchange of affidavits in connection with the present

case that CT Power has been made aware of the reasons for the rejection of the
Letter of Comfort from Avendus. And CT Power has replied and put forward its case
as to why these reasons should not be retained. Before the present application,
being unaware as to why the Letter of Comfort was rejected, CT Power never had
any opportunity of presenting its case in favour of the Letter of Comfort provided by
Avendus.
56.

The question which arises is whether in the light of the circumstances of the

present case, CT Power has a legitimate expectation to be consulted before the


outright rejection of the Letter of Comfort and to be given the opportunity to refute the
reasons invoked for rejection of same.

In our view, CT Power does have such

legitimate expectation. We say so because in our view, by holding meetings with CT


Power in January 2015, both the Ministry of Energy and the Ministry of Energy were
representing that they were in the process of resolving how best would condition 15
be satisfied by CT Power. Assuming even if the stand of the Ministry of Finance that the draft Letter of Comfort proposed after the meetings of 15 and 16 January
2015 was a final one - is right, fairness would require that CT Power be informed why
the Letter of Comfort from Avendus did not satisfy the requirements and be given an
opportunity to justify why in its view, it did so.
57.

We therefore hold that the rejection of the Letter of Comfort was in breach of

the legitimate expection of CT Power that it would be treated fairly and be given an
opportunity to answer the objections of the Ministry of Finance.

The remedy
58.

CT Power no longer seeks orders of mandamus but appropriate orders of a

declaratory nature. Objection was taken as to the changes in the remedies sought.

20
The objection cannot hold as it is well within the supervisory jurisdiction of the Court
to grant declaratory orders in applications for judicial review. We also note, as stated
earlier, that CT Power only became aware of the reasons invoked for the refusal to
proceed with the Project in the course of the present review proceedings.
59.

For the reasons stated above:

(a)

We declare that the reasons invoked by respondent no. 1 in its

affidavits on record to hold that condition 15 of the EIA licence has not
been satisfied are unreasonable, irrational and in breach of the legitimate
expectation of the applicant.

(b)

We also declare that the reasons invoked by respondent no. 2 not

to sign the Implementation Agreement are misconceived, unreasonable


and irrational and in breach of the legitimate expectation of the applicant.
60.

The respondents will pay the costs of the present application.


A. F. Chui Yew Cheong
Judge
R. Teelock
Judge

7 July 2016
Judgment delivered by Hon A. F. Chui Yew Cheong, Judge
For Applicant

Mr Attorney P Thandarayan

Mr D. Basset SC together with


Mr N. Patten of Counsel

For Respondent No 1 &


For Co-respondent No. 2

Mrs J Lau Yuk Poon,


Assistant Parliamentary Counsel
Miss V. Nirsimloo,
Deputy Chief State Attorney

For Respondent No 2 &


For Co-Respondents Nos 1,3,4:

Mrs C. Green-Jokhoo,
Assistant Parliamentary Counsel

21
For Respondent No 2 &
For Co-Respondent Nos 1, 4:

Miss V. Nirsimloo
Deputy Chief State Attorney

For Co-Respondent No. 3:

Miss C. Camiah
Principal State Attorney

For Co-Respondent No 5

Mr Attorney S. Sookia
Mr R Chetty, SC

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