Mozambique v. Patel Engineering Limited

Case summary

At a glance

Parties: Republic of Mozambique and the Mozambique Ministry of Transport and Communications (claimants) v. Patel Engineering Ltd. (India) (respondent)
Case no.: ICC Case No. 25334/JPA/AJP
Forum and rules: ICC arbitration under the ICC Rules in force from 1 March 2017; seat Maputo, Mozambique; Mozambican Arbitration Law (Law No. 11/99) as lex arbitri
Treaty: Contract clause: Clause 10 of the Memorandum of Interest of 6 May 2011 (a parallel treaty arbitration runs under the India–Mozambique BIT, PCA Case No. 2020-21)
Tribunal: Jan Kleinheisterkamp (President), Eduardo Silva Romero, Stephen P. Anway (dissenting)
Sector: Transport concession; public tender
Outcome: By majority, PEL was enjoined from seeking a decision on matters arising out of the MOI in any other forum, including as preliminary issues in the treaty arbitration. A corrigendum of 25 November 2022 limited the injunction to the period until the ICC Tribunal decides those matters. Mozambique's request to stop the treaty arbitration entirely was rejected.
Amount: No amounts stated. Costs of the decision reserved for a future award.

The dispute

On 6 May 2011, Patel Engineering Ltd. (PEL) and Mozambique's Ministry of Transport and Communications signed a Memorandum of Interest (MOI). Clause 10 sends "any dispute arising out of this memorandum" to ICC arbitration under Mozambican law, seated in Mozambique. PEL later brought a claim under the India–Mozambique BIT (UNCITRAL, PCA Case No. 2020-21) over the award of a concession through a public tender. Mozambique then started this ICC arbitration, seeking among other things a declaration that the MOI is void. In its Partial Award on Jurisdiction, the ICC Tribunal declined jurisdiction over the treaty claims and refused an injunction. On 18 May 2022 Mozambique renewed its request under Article 28(1) of the ICC Rules for an order stopping PEL from pursuing the UNCITRAL arbitration. It argued that PEL's treaty claims depend on nine contractual disputes that fall within the ICC Tribunal's exclusive jurisdiction. PEL replied that nothing material had changed since the Partial Award. It argued that the request was in substance an anti-arbitration injunction that Mozambican law does not allow, that the two arbitrations rest on different instruments of consent and causes of action, and that a treaty tribunal may consider contractual issues as facts.

Key holdings

Under Article 28(1) of the ICC Rules, as permitted by Article 33(1) of the Mozambican Arbitration Law, the Tribunal has power to enjoin a party from pursuing, in another forum, disputes covered by an arbitration agreement that gives the Tribunal exclusive jurisdiction. The Mozambican provision defers to the parties' agreement, and the parties chose the ICC Rules. PO14 ¶¶ 52–57, 61
It does not matter that the other forum is an arbitral tribunal. The objections usually raised against anti-arbitration injunctions concern State courts. Here the MOI's arbitration clause is a specific agreement concluded after the BIT entered into force (September 2009), and the order is addressed to PEL in personam, not to the PCA Tribunal. PO14 ¶¶ 58–60, n. 107
The Tribunal's jurisdiction over disputes arising out of the MOI is exclusive, not concurrent. PEL waived any right to frame its claims so as to have those matters decided elsewhere. Asking the PCA Tribunal to decide the same contractual issues, even as preliminary or factual questions for its treaty claims, is prima facie a breach of the arbitration agreement. PO14 ¶¶ 65–71, 83–85, 89
Urgency and substantial prejudice were shown. The PCA hearing was scheduled for the week before the ICC hearing, and PEL itself had said that once the treaty claims were decided, few if any issues would be left for the ICC Tribunal. The balance of equities favoured the measure, and PEL's stated intention to proceed regardless was no ground to refuse it. PO14 ¶¶ 90–96
The measure was limited to matters arising out of the MOI. PEL remains free to pursue its treaty claims, and comity bars undue interference with the UNCITRAL arbitration. The request to stop PEL from taking part in the UNCITRAL arbitration altogether was rejected, and costs were reserved. The corrigendum of 25 November 2022 added that the injunction lasts until the ICC Tribunal has decided those matters. PO14 ¶¶ 97–101; Corrigendum
Stephen Anway dissented. In his view the order departs from Vivendi and about 20 years of case law allowing treaty tribunals to consider contracts insofar as needed to find a treaty breach. He also considered that it overrides the Treaty Tribunal's competence-competence, that Mozambique did not show that Mozambican law permits such an injunction, and that urgency, necessity, irreparable harm and proportionality were not met. Dissenting Opinion ¶¶ 1–5, 21–43, 56–66, 78–84
In an additional dissent, Anway found that the corrigendum was not a mere correction but a material change. In his view it is hard to reconcile with the order's reasoning on exclusive jurisdiction and leaves his objections intact. Additional Dissenting Opinion ¶¶ 4–12

Procedural history

5 May 2020Mozambique's first pleading in the ICC arbitration, which already asked for an injunction against PEL (according to the dissent).
3 November 2021The UNCITRAL (PCA) Tribunal rejects Mozambique's application to stay the treaty arbitration.
February 2022Partial Award on Jurisdiction: the ICC Tribunal declines jurisdiction over the treaty claims and refuses an injunction. PO14 dates the award 9 February 2022; the dissent dates it 16 February 2022.
12 April 2022The PCA Tribunal rejects Mozambique's second stay application.
18 May 2022Mozambique files its renewed application under Article 28(1) of the ICC Rules to enjoin PEL.
6 September 2022Online hearing on the injunction.
24 November 2022Procedural Order No. 14: by majority, PEL is enjoined from pursuing matters arising out of the MOI in any other forum.
24 November 2022Stephen Anway issues his Dissenting Opinion.
25 November 2022Corrigendum to PO14 adds a time limit to the injunction: it runs until the ICC Tribunal decides the MOI matters.
29 November 2022Stephen Anway issues an Additional Dissenting Opinion on the corrigendum.