Brussels Court rejects Rawat’s claim, but is it the end?

The French-speaking Court of First Instance in Brussels has negatively responded to businessman Dawood Rawat’s claim for USD1 billion damages he was seeking from the State of Mauritius for dismantling of the British American Investment group (of which he was the majority shareholder and Chairman) in 2015 on the basis that the group was running a “Ponzi-like scheme.”

The verdict came three years after the Mauritius-born businessman initiated the proceedings against an earlier decision of the Paris Arbitral Tribunal dismissing the case on the ground that it did not have appropriate jurisdiction to rule on the protection of investments stated in a trade convention between France and Mauritius.

This time, the dual French-Mauritian nationality was turned down by the Brussels Court, which ruled that the term “national” in the convention applies only to a citizen of one of the two countries and not to a “binational” – (holding both nationalities). Dawood Rawat had been investing in the BAI group as a Mauritian since the 1970s and he received  French nationality in 1998. 

At the time it was brutally dismantled, the BAI group had become a diversified conglomerate with investments in over 50 market-leading companies in Mauritius, mainland Africa and Europe. Some of the flagship companies were Bramer Bank (now Maubank), Apollo Bramwell Hospital (now Wellkin), BAI (now NIC), Courts and Iframac- a multi-brand car dealership (Mercedes, Mitsubishi, Peugeot, Jeep, etc). Several companies were nationalized, others were sold to competitors or just closed down.

Government partisans were quick to rejoice over the Brussels verdict. This came as a relief almost two weeks after Law Lords of the Privy Council upheld a verdict of the Singapore Arbitration Court, sentencing the State Trading Corporation (the State-owned procurement entity) to disburse up to USD135million (Rs5.7 billion) over what is known as the Betamax Affair.

In April 2015, only months after taking power, the new MSM-led government annulled the ‘Contract of Affreightment’ with Betamax, a petrol carrier that had bagged a deal, under the outgoing regime, to supply the country with petroleum products. The verdict and, eventually, the payment effected a week later, triggered popular outcry, especially at a time when government coffers are reportedly under pressure.

Another compensation, this time of the magnitude of $ 1 billion (approx. Rs43 billion) in such context is unimaginable, economists claim.

Several observers, including ex-Bank of Mauritius Governor Rundheersing Bheenick, have openly criticized what they describe as the Government’s “vindictive approach” against those close to ex-PM Dr Navin Ramgoolam. Betamax’s owner, Vikram Bhunjun, was said to be one such close friend. So was said to be Dawood Rawat.

The Cabinet meeting of Friday July 2 “took note” of the ruling of the Brussels Court, which “set aside the claim of Mr Rawat, of one billion US Dollars, for damages…”

“The concept of ‘ressortissant (national)’ could not be of help to Mr Rawat as the Brussels Court confirmed the interpretation of the Arbitral Tribunal that the plain ordinary meaning is to be given to the term,” said Cabinet documents.

However, legal experts feel the relief could be short-lived: Dawood Rawat’s legal team have issued a statement pointing out that the Brussels Court ruled only on a question of procedure.

“This judgment does not rule on the merits of the dispute between Mr Dawood Rawat and the Republic of Mauritius. This dispute concerns the legitimate claims for reparation and compensation for the expropriation to which Mr Dawood Rawat and his companies have been subjected and the illegal acts committed by the Republic of Mauritius in this regard,” the statement read. 

“The Republic of Mauritius has never had to respond of the said acts until today and no judicial decision has confirmed the validity of the said acts.”

The statement concluded by stating that “Mr Rawat is now examining procedural avenues available, including contesting the verdict of Brussels Court.”

Six years after the BAI group was dismantled, after Dawood Rawat’s daughters and sons-in-law were arrested, insulted and eventually cleared, the initial accusations of “Ponzi scheme” have not yet been substantiated.

Interpol has, in the meantime, cleared Dawood Rawat of the international arrest warrant that had been ordered by the Mauritian Government.