IN THE SUPREME COURT OF MAURITIUS In the matter of:- ‘SCR No.115455 ( 5A/260/17) STATE TRADING CORPORATION having its registered office situate at Lot 55, Business Zone, Ebene, Cybercity 72201 Applicant Versus BETAMAX LTD having its registered office at 9" Floor, B&S Tower, Cybercity,Ebene. J,4Veekram Bhunjun residing at Avenue des Hirondelles, Sodnac, Quatre james and holder of National Identity Card bearing Number B. 5290268430195E MAKE SOLEMN AFFIRMATION AS A HINDU AND SAY THAT: Introduction 1. | am a director of the Respondent (hereinafter referred to as “Betamax’). | am duly authorised to affirm the present affidavit on its behalf. 2. | have taken cognisance of the first affidavit dated 29 August 2017 affirmed by Mr Rajanah Dhaliah on behalf of the Applicant (hereinafter referred to as “STC’) in support of its motion to set aside the Final Award No. 59 of 2017 dated 5 June 2017 of the Singapore International Arbitration Centre in Arbitration No. 084 of 2015 (‘the Award’). 3. On7 September 2017, the Hon. E. Balancy, Acting Chief Justice, made a provisional order granting Betamax recognition and enforcement of the ‘Award in the same manner as a judgment of the Supreme Court. 4. | affirm this affidavit in reply to Mr Dhaliah's affidavit. For ease of reference, | shall refer to Mr Dhaliah’s affidavit as “DHALIAH 1" and adopt the same abbreviations and capitalised terms as used in it. For ease of reference to the documents in the Arbitration Record (Annex B to DHALIAH 1), references are made in brackets to the specific hearing bundles, e.g. “Bundle C/p.294 ". Reference is also made to the transcript on 8, 9 and 10 August 2016 — a copy of the d_an ‘10. Insofar as the facts and matters deposed to in this affidavit are within my ‘own knowledge, they are true; insofar as they are not within my own knowledge, they are true to the best of my information and belief, being derived from the documents in the arbitration and the other sources identified below. The fact that I do not address each and every matter raised in DHALIAH 1 should not be taken to mean that what is stated in it is accepted. In this affidavit, | have sought to highlight non-exhaustively the inconsistencies which exist between the averments made in DHALIAH 1 and the facts established in the arbitration. Any contradiction which | may have left out will be addressed in submissions by Betamax’s Counsel. Also, | do not deal in this affidavit with matters which | am advised by Betamax's Counsel are more appropriately dealt with by way of legal argument and submissions. STC is essentially advancing the same legal arguments in ‘Support of its application as those which it made in the arbitration and which were decisively rejected in the Award. Suffice it to say that Betamax considers that STC's application to set aside the Award is wholly without merit. | was Betamax's sole factual witness at the arbitration which is the subject of the present application. | gave written and oral evidence and was cross- examined by STC’s counsel and questioned by the Sole Arbitrator, Dr Michael Pryles AO PBM, at the hearing. In contrast to myself, Mr Dhaliah did not give evidence at the arbitration Indeed, | am aware from publicly available information that Mr Dhaliah was only appointed as the General Manager of STC on 30 May 2015 and that he did not occupy any position with STC prior to that date. As such, Mr Dhaliah could not have any first-hand knowledge of any of the matters which were the subject of the arbitration and, in particular, of the Negotiations, conclusion, performance and termination of the COA. | observe from paragraph 2 of DHALIAH 1 that it is stated that the matters deposed to in it are, unless otherwise stated, within his personal knowledge and otherwise “based on information derived from documents or otherwise received" by STC. However, for the reason just stated, | suggest that Mr Dhaliah's personal knowledge of the salient events is very limited. | also observe that Mr Dhaliah does not disclose the sources of his information which is outside his personal knowledge and not derived from documents. In the arbitration, STC’s two factual witnesses were Mr Balram Asyrigadoo, an Officer in Charge of Operations (Commercial Division) at STC and Mr John Lam Choo, who was a member of the board of directors of STC from 2006 to 2012. (For convenience and with his agreement, Mr Asyrigadoo was referred to in the arbitration proceedings as Mr Balram). As appears from the Award, even they had limited first-hand knowledge ofa4, 15. the events in question in the arbitration. Neither person has provided any evidence in support of STC’s motion to set aside the Award. As appears below, to a large extent, in material respects DHALIAH 1 (a) is factually incorrect, (b) is inconsistent with the evidence of Mr Asyrigadoo and Mr Lam Choo, (c) is inconsistent with the binding findings of fact made by the Sole Arbitrator in the Award and (d) raises certain matters which, insofar as they have any merit (which is denied), STC could have raised but did not raise before the Sole Arbitrator. DHALIAH 1 is therefore an unsound factual basis for STC’s grounds of challenge to the Award (cf DHALIAH 1, paragraph 19). onse to STC’s brief summary of the DHALIAH 4, paragraphs 10-16 £42. The brief summary of the dispute and arbitration in paragraphs 10 to 16 of DHALIAH 1 is incomplete and misleading. = gn particular, the incorrect allegation in paragraph 12 of DHALIAH 1 that ‘= the right of first refusal under the COA was a “very lucrative” right was not one made by STC in the arbitration and there was no factual evidence = adduced in relation to it It is also incorrect that, through the arrangement under the COA, Betamax’s acquisition of the Red Eagle was financed by STC (and by extension, the State). During the arbitration, the only evidence which STC purported to adduce in support of that contention was that of Mrs Jean Richards, STC's expert witness. Counsel for STC conceded at the hearing that the evidence of Mrs Richards on that matter was not admissible [Exhibit 1, p.96, lines 12-21]. The assertions made in paragraph 13 of DHALIAH 1 are not accepted. In particular, | am not aware of any “review’ that the Government undertook in relation to the procurement process for the COA when it was elected into power and no evidence on that alleged “review” was adduced during the arbitration proceedings. On the contrary, during the electoral campaign in 2014, members of the MSM had already threatened to terminate the COA if they won the elections. Further, even after the current Government ‘came into power, in January 2015, just before the termination of the COA, Betamax was invited to several meetings with members of the Government including the Minister of Industry, Commerce and Consumer Protection and the Minister of Financial Services, Good Governance and Institutional Reforms to discuss matters relating to the COA. During the arbitration proceedings, STC acknowledged that those meetings took place but objected to Betamax adducing evidence on the content of the discussions held during those meetings [Exhibit 1, p.149, line 21 — p.151, line 16} x ¢16. 17. 18. 19. The statement in paragraphs 14 and 68 of DHALIAH 1 to the effect that STC had no alternative but to comply with the Government's decision to terminate further operation of the COA is in contradiction with the evidence of Mr Lam Choo and the finding of the Sole Arbitrator in relation thereto. As found by the Sole Arbitrator: “Mr Lam Choo accepted that STC's board exercised its own judgment when deciding to enter into the COA. This was so despite his evidence being that pressure had been brought to bear by STC's responsible ministry on STC to sign the COA. No part of the Government other than STC was a party to the COA. It follows that only STC is capable of terminating the COA. Just as STC’s decision to enter into the COA was one that had to be made by STC, the decision to terminate must also be made by STC. For these reasons, STC's submissions that Mr Lam Choo's evidence is irrelevant because he had left the board by the time the COA was terminated are not to the point,” [Award §229] In relation to the meeting of 18 January 2008 referred to in paragraph 24 of DHALIAH 1, although nothing was said about allowing any of the private companies to purchase and own the tanker, my understanding of what was conveyed by the Government at that meeting was that the Government was not willing to participate in the project or provide any kind of financial assistance so that it was clear that the Government had by then decided that it would be the private sector which would be acquiring and owning a tanker without any financial assistance from the Government. This is the evidence | gave before the Arbitrator [Bundle C/p.303/§25) and which he found to be plausible [Award §184]. The Arbitrator further found that ‘itis also plausible that a private party, such as Betamax, would consider that the retuns from the 15-year contract were insufficient to justify financing a tanker it would not ultimately own” [Award §179]. The evidence of Mr Asyrigadoo on behalf of STC, on the other hand, was that the private sector would not own the tanker but only finance its acquisition ‘Yor a national reason’, which prompted the Arbitrator to ask Mr Asyrigadoo whether his evidence was that the private sector would finance the acquisition of a tanker out of altruism [Exhibit 2, p.83, lines 2-24]. The Arbitrator found that Mr Asyrigadoo's ‘suggestion that a private party would be willing fo finance the acquisition for ‘national reasons" is an implausible explanation.” [Award §279] In paragraph 27 of DHALIAH 1, Mr Dhaliah states his understanding (from an unidentified source) that the then Government had been advised to consider inviting international tenders. To be clear, based on Mr Asyrigadoo's evidence in the arbitration [Bundle C/p.361/§37(e)], if that is 420. 24 what Mr Dhaliah is relying on, the so-called "advice" was only in the nature of a recommendation given by MLTC. The alleged unexplained deviation from the Project as_originall} envisaged - DHALIAH 1, paragraphs 29-32 Paragraphs 29 to 32 of DHALIAH 1 is contradicted by the evidence at the arbitration of both Mr Asyrigadoo and Mr Lam Choo and documents in the Arbitration Record: (1) Neither Mr Asyrigadoo nor Mr Lam Choo gave evidence that the Government had not given notice to the other five private companies that had attended the meeting held by MPI on 18 January 2008. (2) _ Mr Asyrigadoo conceded that the real reason for deciding against international tenders was the need to secure Mauritius’ supplies by engaging only a Mauritius company [Exhibit 2, p.50, lines 14-19]. Mr Asyrigadoo conceded that the departure from the project that was originally envisaged was not in any way relevant to STC's defence to the claim brought by Betamax in the arbitration [Exhibit 2, p.48, line 25 ~ p.50, line 8] By letter dated 20 November 2008 addressed to the Permanent Secretary of the Ministry of Business, Enterprise and Cooperatives, STC stated that it had “no objection” to the Government's proposal [Bundle D/p.689}. As explained in paragraph 16 above and paragraph 33 below, on the basis of Mr Lam Cho's evidence, STC was indeed in a position to satisfy itself of an explanation for the Government's change in decision and to object to the Government's proposal. Apart from ‘one occasion, there is no record in any relevant STC board minutes of requests for information or further information having been made by members of the STC board to the General Manager of STC in relation to the project and COA [Exhibit 2, p.160, line 21 — p.152, line 1}. The existence of the so-called Freight Condition referred to in paragraph 32 of DHALIAH 1 has always been disputed by Betamax. As | stated in my evidence in the arbitration, my understanding of what was meant by the expression ‘rebates available with regard to indicative market rate” in the letter of 12 January 2009 was that STC wanted to pay less than it was paying to its then carriers, Pratibha Shipping Co. Ltd (“Prathiba") and ST Shipping & Transport (‘ST Shipping’), who were contracted with STC to deliver clean and dirty petroleum to Mauritius [Bundle C/p.312/§57]. It was not, as STC contended, meant to ensure that the applicable freight rates would always be at a discount off the prevailing market rates. Pande22. 23. 24. 25. 26. In any case, the Sole Arbitrator did not find it necessary to make a finding on the existence of the Freight Condition as alleged by STC but held that, even assuming in STC’s favour the existence of the Freight Condition, Betamax's proposed departure from it merely constituted a counter Proposal to the letter of 12 January 2009 and was consistent with a straightforward commercial negotiation [Award §189-190] The JV was allegedly awarded the contract - DHALIAH 1, paragraph 33 STC has consistently referred to the letter of 12 January 2009 referred to in paragraph 33 of DAHLIAH 1 as the “Award Letter’. However, that letter did not constitute any award of the COA to Betamax. In Particular, by its terms, it referred only to an agreement in principle, as conceded by STC in Paragraphs 23 and 25 of the Statement of Defence (Amendment No.2) in the arbitration proceedings [Bundle A/p.35]. The Sole Arbitrator correctly found that the COA was not awarded on 12 January 2009 but on 27 November 2009 [Award §154), The COA was allegedly inconsistent with the Award Letter - DHALIAH 1, paragraphs 34-40 L.paragraphs 34-40 There was no evidence at the arbitration and nor is it the case that, as alleged in paragraph 34 of DHALIAH 1, the draft COA that I circulated on 30 March 2009 was materially and substantially different from the terms set out in the letter of 12 January 2009 In relation to paragraphs 35 and 36 of DHALIAH 1, it is not correct that the JV “insisted” that the Goverment guarantee STC’s obligations under the COA. STC did not adduce any evidence to that effect at the arbitration, The evidence that | gave at the arbitration was that it was unlikely that Betamax would be able to secure funding from commercial banks for the acquisition of the tanker without a government guarantee and that the obtaining of a government guarantee was also important because STC sells quite a few products at a loss due to subsidies given by it on basic products such as rice and flour [Bundle C/p.317/§78-79]. Hence, although the Government's letter of 12 January 2009 stated that there would be no involvement or financial commitment on the part of the State for the purchase of the tanker, as the Sole Arbitrator found, it was plausible that this change was simply the product of the parties’ protracted commercial negotiations [Award §195]. In relation to paragraph 38 of DHALIAH 1, both parties caused expert evidence on STC's allegation (which Betamax denied) that the contractual terms proposed by the JV were ‘blatantly skewed” in the JV's favour. However, the Sole Arbitrator did not find it necessary to determine whether the COA was a “good” or “poor” bargain for either parly because: “even if the Tribunal were to find that the CoA was a bad bargain for STC (which it does not do), this would not show the 6necessary ‘harm’, nor provide a basis for an inference that there was a criminal conspiracy. Given this is so, it is not necessary for the Tribunal to determine whether the CoA was a “good” or “poor” bargain for either party. The parties signed a contract and are bound by it. The maxim of pacta sunt servanda applies to this as to all contracts." [Award §240] 27. Paragraph 39 of DHALIAH 1 is incomplete and misleading. This is in Particular so in respect of the improper motives which Mr Dhaliah seeks to impute to Betamax for its acquisition of a 75,000 DWT tanker and the allegation that Red Eagle failed to carry the full freight capacity due to its size. As summarised in paragraph 42 below, what is stated is inconsistent with Mr Asyrigadoo’s evidence on STC’s behalf at the arbitration. 28. Paragraph 40 of DHALIAH 1 is inconsistent with Mr Asyrigadoo's evidence on STC’s behalf at the arbitration. When shown the minutes of a board meeting of STC of 28 April 2009, he conceded that the freight rates were jointly agreed by STC and Betamax following lengthy negotiations, and not between the Government and Betamax. [Exhibit 2, p.81, lines 13-15] The negotiations - DHALIAH 1, paragraphs 41-48 In relation to paragraph 41 of DHALIAH 1, as | said in evidence at the arbitration, | also attended several meetings with the officers of STC [Bundle C/p.317/§76). Paragraph 42 of DHALIAH 1 is incorrect and misleading. In particular, it is not correct that SLO consistently highlighted the need to comply with the PPA and that Betamax ignored such issue. As the Sole Arbitrator found: i. “The evidence shows that there were extensive discussions between the SLO and Betamax’s solicitors, and that those discussions included a direct response to the issues raised regarding the PPA in the letter of 28 April 2008. This is consistent with [Mr Asyrigadoo’s] evidence on cross- examination that Betamax had “several meetings" with his colleagues at STC and “many, many meetings” with the SLO, in which these issues were ‘thrashed out’.” [Award §199] 31. In paragraph 44 of DHALIAH 1, the surprising allegation is made that “STC had practically no involvement in the negotiations between SLO and CBC’. If that were correct, it would suggest that STC had been kept in the dark by its own legal advisers. In any case, STC did not make such contention in the arbitration proceedings. The documents in the Arbitration Record include correspondence exchanged between SLO, CBC and STC, including a letter from the General Manager of STC to the Attorney- General's Office dated 05 May 2009, attaching the comments of CBC. [Bundle D/p.764-773]. Further, Mr Lam Choo confirmed in his evidence Sk32. 33. 35. 36. that all issues raised by SLO were brought to the attention of the Board [Exhibit 2, p.159, lines 15-20]. The allegation in the same paragraph that STC’s Board received little information on these discussions despite repeated requests is also inconsistent with the minutes of the Board meetings of STC (in particular, the minutes of the Board meeting of 31 July 2009 ~ [Bundle Dip.1020}} and the memorandum that was circulated to the Board ahead of the meeting of 06 May 2009, The further allegation in the same paragraph that pressure was placed on ‘TC's Board to approve the COA is also inconsistent with the evidence of Mr Lam Choo on STC’s behalf at the arbitration. He conceded that he was nol coerced by the Government and that STC’s Board had taken a view that the COA should be entered into [Exhibit 2, p.166, lines 8-11}. In that respect, the Sole Arbitrator found that: b. “the allegation that the then Government pressured STC into accepting the CoA is not supported by the evidence. In cross examination, Mr Lam Choo accepted that the STC board must exercise its own Judgment when deciding whether to comply with a specific direction from the responsible Minister, although bound under the STC Act to comply with ministerial directions of a general character. Ultimately, Mr Lam Choo also accepted, in response to questions from the Tribunal, that the STC board had taken the view that the CoA should be entered into and that it was not coerced by the Goverment into signing the CoA." [Award §192]. The allegation in the same paragraph that the Chairperson of STC’s Board urged at a board meeting of STC on 21 April 2009 that STC would be foolish not to accept the JV’s COA is also inconsistent with the evidence of Mr Lam Choo on STC's behalf who conceded that the Chairperson did not make any such statement [Exhibit 2, p.154, lines 6-10]. The Chairperson did not give evidence at the arbitration. The (irrelevant) statement that the then Chairperson of STC's Board is my sister-in-law is also factually incorrect and no such statement was made at the arbitration. Paragraph 45 of DHALIAH 1 is incorrect and misleading. The statement that STC's Board was urgently convened on 6 May 2009 is inconsistent with Mr Lam Choo's evidence on STC’s behalf at the arbitration that it was agreed at the previous Board meeting on 21 April 2009 that the matter would again be discussed at the next meeting a couple of weeks later [Exhibit 2, p.155, lines 17-22]. Also, the statement in that paragraph that the Government had already decided that STC should enter into the COA is inconsistent with the concession made in evidence by Mr Lam Choo on STC's behalf at the arbitration that he had no basis to say that [Exhibit 2, p.164, line 23 — P.162, line 4]37, 38. For the reasons summarised in paragraph 33 above, the statement in Paragraph 46 of DHALIAH 1 that STC did not have the option of deciding against the COA is incorrect and inconsistent with the evidence presented by STC at the arbitration hearing. The statement in paragraph 48 of DHALIAH 1 that STC was not involved in the discussions with Betamax on the terms of the COA from May to November 2009 is incorrect. As | said in evidence at the arbitration, there were several exchanges between Betamax and STC as regards the terms of the COA between May and September 2009 [Bundle C/p.322- 323/§101-105]. Further, again as | said in evidence, the only terms of the COA which were discussed with the Government were the termination clauses. Those clauses were considered relevant by the Government in the context of it guaranteeing STC's obligations under the COA [Bundle Cip.326/§116]. ussions een the Government and Betamax - DHALIAH 1. Paragraphs 49-53 Paragraphs 49 to 53 of DHALIAH 1 are inconsistent with the evidence of Mr Asyrigadoo on STC’s behalf at the arbitration. In the course of his cross-examination, he withdrew his allegation that BDO was not independent [Exhibit 2, p.85, line 17 to p.86, line 3] and conceded that =~ the only factor preventing BDO from accurately evaluating Betamax’s bid was that STC had itself not supplied BDO with market data information held by STC [Exhibit 2, p.87, line 3 to p.90, line 4]. As found by the Sole ‘ Arbitrator, Mr Asyrigadoo “accepted that BDO's report was independent. The relationship of BDO to Betonix, and Betonix’s status as Betamax's © parent, was disclosed at the time of the engagement.” [Award §191] = 83 Signing of the COA — DHALIAH 1, paragraphs 54-60 40. 41, In relation to the statement in paragraph 58 of DHALIAH 11 that “[o}daly’, the members of the STC board were not provided at its meeting of 27 November 2009 with a draft of the COA, the minutes of that board meeting give no indication that any member of the board had requested to be provided with a draft of the COA [Exhibit 2, p.165, lines 11-12]. | refer also to what | have stated in paragraph 32 above. | have already responded in paragraphs 33 and 37 above to the assertion that STC's Board had no alternative but to give its approval for STC to sign the COA, STC adduced no evidence at the arbitration as to whether, as now stated in paragraph 60 of DHALIAH 1, CPB provided its approval pursuant to the signing of the COA. | did become aware through a public statement issued by the Office of the Director of Public Prosecutions dated 23 November 2016 that the CPB’s predecessor, the Central Tender Board, had informed the MPI on 6 December 2007 that the tanker project fell outside its purview. A copy of the statement issued by the Office of the Director of Publi is jth annexed and marked Exhibit 4" ene42. 43, 45. 46, 47. Performance of the COA ~ DHALIAH 4, paragraphs 61-65 The statements in paragraphs 61 to 64 of DHALIAH 1 relating to the alleged cause of the berthing problems being the size of Red Eagle are inconsistent with the evidence of Mr Asyrigadoo at the arbitration. He conceded that if the MPA had provided Betamax with accurate information concerning water depth at the Mer Rouge jetty, there would have been no issue with respect to operational difficulties encountered during berthing [Exhibit 2, p.118, line 22}. The Arbitrator accepted Mr Asyrigadoo's evidence on that matter [Award §207]. Paragraph 65 of DHALIAH 1 is replete with generalisation and is incomplete and misleading. Even if it assumed in STC's favour that it made a bad bargain in the COA, as the Sole Arbitrator found, the parties signed a contract and were bound by it. Government's decision to end the COA — DHALIAH 4, paragraphs 66- 69 Contrary to paragraph 66 of DHALIAH 1, and as the Sole Arbitrator correctly determined, there was no failure to comply with mandatory Procurement legislation. Reference is made to an alleged “comprehensive study" carried out by the Government before terminating the COA. However, | repeat what is stated in paragraph 15 above. No evidence of any such comprehensive study was adduced by STC at the arbitration. The statement in paragraph 67 of DHALIAH 1 that STC was “informally” informed by a letter of 2 February 2015 of the Government's decision to terminate the COA is one not made by STC at the arbitration. At the arbitration, STC’s argument - which was unsuccessful — was that the letter [Bundle D/p.1871] amounted to a ministerial direction to STC to cease performance of its obligations under the CoA. Other matters Paragraph 94 of DHALIAH 1 refers to alleged criminal investigations in respect of any alleged breach of the PPA but correctly states that the DPP. has decided against the bringing of any charges. In that regard, it was accepted by STC at the arbitration that | was never the subject of criminal Proceedings [Exhibit 1/104/16-23] and nor was Betamax. As far as the application for judicial review of the DPP's decision is concerned, Betamax considers that it is without merit. To the best of my knowledge, the source of the leak to the Mauritian press of the Award is not Betamax or anyone associated with it. Insofar as the contrary is implied by paragraph 95 of DAHLIAH 1, any such implication would.be unfounded. On the day following the Award, the Government 10itself held a press conference and informed the public of the Sole Arbitrator’s decision and of STC’s intention to make the present application. 48. _STC’s ‘position’ referred to in paragraph 97 of DHALIAH 1 that the COA was entered into pursuant to a criminal conspiracy to benefit Betamax and at the expense of Betamax was, on the evidence, roundly rejected by the Sole Arbitrator, who held that ‘none of the circumstances on which STC relies can ground an inference that there was a criminal conspiracy.” [Award §211(a)]. | understand STC's argument to be that this was a Matter which is not arbitrable under Mauritian law. However, for reasons that will be developed in Betamax’s submissions, Betamax’s Counsel have advised that the argument (along with all the other grounds of the set aside application) is not well-founded. 49. _ | therefore move that the present application be set aside with costs. Solemnly affirmed by the above named Deponent ) at Chambers, Supreme Court House, Port Louis, ) fay of September 2017 ) Bef r Ss. RO sefipemesauar/ Regional Court Administrator ‘Supreme Court part of an application to be lodged before the above ulSibert § 1A Ins fo 19 fie