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Commercial Arbitration – An Important Step for the Cambodian Investor
THE FORTHCOMING NATIONAL ARBITRATION CENTER
Cambodia’s first National Arbitration Center will be established with the aim of resolving business disputes and enhancing the confidence of private sector investors. The International Finance Corporation, a member of the World Bank Group, and Cambodia’s Ministry of Commerce signed a Memorandum of Understanding (MOU) in August, 2009 to implement a three-year project to set up a National Arbitration Center.
The National Arbitration Center will be the first commercial arbitration body in Cambodia offering the business community an alternative commercial dispute resolution mechanism to the courts. In theory, it will enable businesses to resolve their disputes quickly, inexpensively, fairly, and with certainty. It thus promises to enhance the private sector’s comfort level when engaging in business transactions.
As a form of Alternative Dispute Resolution (ADR), Commercial Arbitration (CA) could act as a catapult for economic growth and creation of wealth in Cambodia. It could do this in such a way as to advertise an enhanced and more reliable business climate, crucial to attracting foreign investment. Predictability is also a valuable commodity given systemic issues in the judiciary. Unlike the court process, CA gives both parties in a dispute the flexibility to choose both the arbitrator as well as the rule that will be followed in deciding the case. Essentially, as the Cambodian economy grows and with it the number of commercial transactions, a streamlined dispute resolution mechanism gives the private sector more comfort to engage in business transactions. These features of a more enticing economic landscape in which to invest are echoed in the legislation itself;