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Recent developments in commercial arbitration in Cambodia

Alex Larkin, Senior Adviser – Regional Dispute Resolution, and Sambo Ly , Partner, published an article, Recent Developments in Commercial Arbitration in Cambodia, in the January 2015 edition of Asian Dispute Resolution.  The article includes a discussion of recent developments by Cambodia’s National Commercial Arbitration Centre (“NCAC”), the newly-adopted arbitration rules of the NCAC, and enforcement of foreign arbitral awards in Cambodia, providing increased confidence for protection of commercial investments.

2014 has witnessed a number of significant positive developments in commercial arbitration in Cambodia. It has seen the first Cambodian final appellate court decision enfacing a foreign arbitral award and the adoption of arbitration rules by the Cambodian National Commercial Arbitration Center (NCAC). These developments have the potential to transform Cambodia rapidly into a jurisdiction where commercial disputes can be resolved efficiently and with a maximum of transparency. They may catapult Cambodia ahead of some other ASEAN jurisdictions which, by comparison, are lagging in the area of commercial dispute resolution.

Cambodia has long been considered an attractive destination for foreign investment, offering investment incentives in the form of certain tax holidays for qualifying projects, rapidly improving infrastructure and low-cost labour, among other factors. Coupling such advantages with a dedicated arbitration body, focused solely on resolving commercial disputes, and a demonstrated ability to enforce foreign arbitral awards, will provide investors with a considerable degree of comfort in knowing that their commercial endeavours in Cambodia are protected.

Development of a commercial arbitration centre in Cambodia

The NCAC is the product of Cambodia’s Commercial Arbitration Law (2006)1 and the related Sub-Decree on Organization and Functioning of the National Commercial Arbitration Center (2009) (the Sub-Decree).2 Initial funding and assistance for the establishment of the NCAC were provided by the Asian Development Bank and the International Finance Corporation (IFC), a member of the World Bank Group.3 Cambodia also enacted a revised Code of Civil Procedure (CCP) in 2006.4 This includes key provisions on the execution of arbitration decisions, both foreign and local, as well as provisions permitting courts to issue interim or injunctive relief in relation to matters that are subject to arbitration proceedings.

In accordance with the Commercial Arbitration Law and the Sub-Decree, the Cambodian Ministry of Commerce established a commission which, in turn, appointed the initial members of the NCAC. Those members underwent training by internationally-renowned arbitration experts associated with the Singapore International Arbitration Centre. In addition to the initial members, certain entities, such as chambers of commerce and business associations, have been appointed as representatives with voting rights in the General Assembly of the NCAC. In accordance with art 54 of the Sub-Decree, the NCAC has become a self-governing institution and is expected to complement the country’s already successful Arbitration Council, which hears collective labour disputes. In organising itself as an institution, the NCAC established working groups which developed (inter alia) its Arbitration Rules and its Internal Rules.

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