Commercial arbitration: Legislation and statutory body
Commercial arbitration is a means by which disputes arising out of trade and commerce can be resolved in accordance with the voluntary agreement of parties through a process other than litigation at a court of competent jurisdiction. In Cambodia, dispute resolution through the court system can be an expensive and time-consuming affair. This has often resulted in international businesses choosing to forgo the litigation process and writing off losses. The Royal Government of Cambodia, in accordance with its WTO accession commitments and its constitutional mandate of promoting rule of law, introduced and passed the Commercial Arbitration Law in 2006. This legislation establishes a regulatory framework for the private arbitration of business disputes in accordance with international practices.
The Commercial Arbitration Law promulgated the creation of a National Arbitration Center with the help and guidance of the Ministry of Commerce. Subsequently, a sub-decree was passed by the Council of Ministers in 2009 on the organization and functioning of this body. The Center was formed in the year 2010 and has recently announced the election of its executive board members. The Center will become an independent statutory body upon the nomination of its office-bearers. The body will have a non-exclusive but prominent role in promoting the process of arbitration, training of arbitrators and providing commercial arbitration services in the country.
Statutes and International Treaties
As of February 2013, only collective labour disputes are subject to arbitration in the Kingdom. The Arbitration Council was similarly created under the auspices of the Labour Law of 1997. In July 2001, Cambodia adopted the “Law on the Approval and Implementation of the United Nations Conventions on Recognition and Enforcement of Foreign Arbitral Awards” and in March 2006, the “Law on Commercial Arbitration”, as referred above, was passed in conformity with the UNCITRAL Model Law.
In principle, parties to an agreement, whether foreign or resident in the Kingdom, reserve the flexibility to determine the terms and conditions in accordance with their requirements. However there are certain exceptions where only Cambodian courts retain original and appellate jurisdiction. The Law on Commercial Arbitration applies to both domestic and international arbitration allowing parties to choose foreign arbitration institutions. The Law contains detailed and substantive requirements for procedures to be followed during arbitration proceedings. The Labour Law is applicable for domestic arbitration resulting from labour disputes.
Cambodia is a party to the United Nations Convention of Recognition and Enforcement of Foreign Arbitral Awards in 1958 which came into force through the adoption of the Law on Approval and Implementation of the United Nations Conventions on Recognition and Enforcement of Foreign Arbitral Awards.
The Cambodian Code of Civil Procedure does not apply to arbitration, however, when an arbitral award comes into effect, the execution of the awards must comply with the provisions of the Code of Civil Procedure.