Betamax: Has The Privy Council Gone Too Far In Seeking To Ensure That The Second Look Test Does Not Become A Second Guess Test?

Abstract

Questions of public policy often arise in international arbitrations, including, in particular, issues of competition law and corruption. Arbitrators’ power to adjudicate these issues is conditional upon national courts’ power to review such issues when faced with annulment applications and/or objections to enforcement applications (the ‘second look’ test). However, national courts are divided as to whether, when doing so, they should be allowed to second-guess an arbitral tribunal’s decision on whether there has been a breach of international public policy. In its recent decision in Betamax, the Judicial Committee of the Privy Council (the highest court of appeal for Mauritius, constituted of members of the UK Supreme Court) came down very firmly against second-guessing. After having presented the different approaches that various jurisdictions have adopted on this issue, this article proposes that national courts should be allowed to further inquire into and potentially second-guess arbitrators’ decisions on issues of international public policy, provided that the party applying for the setting aside of the award establishes before the competent court a strong prima facie case that there has been illegality such that recognising or enforcing the award would give rise to a breach of international public policy. Betamax, Public policy, corruption, bribery, money laundering, competition law, illegality, setting aside of arbitral awards, enforcement proceedings