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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
2
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.
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
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.
3
6.
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.
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
4
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.
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.
The letter of 10 October 2014 was submitted to the Ministry of Energy and
response. At any rate, none of the parties has referred to a response, if there was
5
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.
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.
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.
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
6
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
7
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.
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.
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
8
71.1.3
decision;
71.1.4 reply to the notices of CT Power;
71.1.5
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
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
9
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.
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.
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
10
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.
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
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.
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subordinate legislation under a statute, then clearly the body in question
will be subject to judicial review.
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.
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
12
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.
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.
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.
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.
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.
Turning to the present application, the Minister of Energy on whose behalf the
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.
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
CONDITION
7.1
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.
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
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.
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.
Here the
17
determined by the Court, as happened in In Re Findlay.
This can
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.
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)
the letter of comfort to indicate that the bank is operating under a banking
licence;
(b)
18
the equity contribution shall not originate from funds in breach of anti
money laundering legislations and not be of tainted origin;
(c)
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)
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.
(a)
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)
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)
(d)
19
Finance that CT Power had the financial capabilities to finance the
Project in the light of condition 15 of the EIA licence.
(e)
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
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.
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.
(a)
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)
7 July 2016
Judgment delivered by Hon A. F. Chui Yew Cheong, Judge
For Applicant
Mr Attorney P Thandarayan
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
Miss C. Camiah
Principal State Attorney
For Co-Respondent No 5
Mr Attorney S. Sookia
Mr R Chetty, SC