Developing Commercial Arbitration in Cambodia - Insights and Benefits
Explore the development and advantages of commercial arbitration in Cambodia, highlighting key aspects such as why it is chosen, recent trends, investor considerations, enforcement rankings, challenges, and the role of the National Commercial Arbitration Center in offering a robust alternative. Discover how NCAC enhances party autonomy, provides cost-effective solutions, ensures international standards, and enables enforceable awards.
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Presentation Transcript
National Commercial Arbitration Center Development of Commercial Arbitration in Cambodia Mr. BUN Youdy,Arbitrator Member of the NCAC Executive Board Member of EuroCham Board Intercontinental Hotel EuroCham Breakfast Talk 22 September 2015 1
National Commercial Arbitration Center Presentation Outline 1. Why choose commercial arbitration in Cambodia? 2. An overview of recent development of commercial arbitration in Cambodia 2
Why choose commercial arbitration in Cambodia? What investors/companies look for before investing in a country Ease of establishment of a business Market size and growth prospects Labor cost and productivity Infrastructure Political stability Corruption Taxes Ability to repatriate earnings/profit Clear, enforceable legal framework and rule of law 1. 2. 3. 4. 5. 6. 7. Figure 1 - What are the time, cost and numbers of procedures to resolve a commercial dispute through the courts?, Enforcing Contracts Methodology, World Bank 8. 9. 4
Why choose commercial arbitration in Cambodia? Ranking of enforcement of contracts in Cambodia TOPICS DB 2015 Rank DB 2014 Rank Change in Rank Enforcing Contracts 178/189 178/189 No change Doing Business Report (2015, World Bank) Impact on decision making by large and small investors (foreign and local) 5
Why choose commercial arbitration in Cambodia? Current challenges if we don t choose commercial arbitration in Cambodia Difficulties with the courts Limitation of technical or specialized knowledge of judiciary 6
Why choose commercial arbitration in Cambodia? How the NCAC provides a stronger alternative Party autonomy Costs: predictable and reasonable Arbitration rules based on international standards Proceedings may be conducted in a foreign language Awards are scrutinized New York Convention Awards issued by NCAC are enforceable in all NY Convention signatory countries Arbitrators Qualified, trained by international experts in arbitration Experts in Cambodian law Native Khmer language speakers able to quickly understand evidence and documents which will be primarily in Khmer 7
An overview of recent development of commercial arbitration in Cambodia 8
Recent development of commercial arbitration in Cambodia History and Recent Development May 2006: Arbitration Law Aug. 2009: Sub-Decree No. 124 on Organization and Functioning of NCAC Mar. 2010: Selection of arbitration candidates Dec. 2010: Amendment to art. 52 of Sub-Decree No. 124 2010-2011: Selection of arbitrators through examination Jan. 2013: Official launch of NCAC July 2014: Internal Rules and Arbitration Rules April 2015: Code of Ethics 9
Recent development of commercial arbitration in Cambodia Status of NCAC NCAC is an independent organization Roles and Functions of NCAC Promote arbitration: promote the settlement of commercial disputes through arbitration in Cambodia Rules: create the necessary infrastructure and rules for the administration of arbitration cases in Cambodia Standards: ensure high quality standards of arbitration are maintained in Cambodia, including setting and ensuring the qualifications of arbitrators Training: provide education and training to arbitrators and aspiring arbitrators in Cambodia 10
Recent development of commercial arbitration in Cambodia Fee schedule Registration fee: flat rate of 250.00 USD Administration fee: graduated, based on the sum in dispute Arbitrator appointment fee: flat fee of 300.00 USD per arbitrator if the parties fail to appoint an arbitrator on their own Tribunal fee: graduated, based on the sum in dispute Any expenses incurred by the Tribunal and the NCAC:includes expenses such as costs of expert witnesses and cost of facilities 11
Recent development of commercial arbitration in Cambodia Fee schedule Administration Fee (USD) Sum in Dispute Arbitration Fee Up to 50,000 = 750 of excess over of excess over of excess over of excess over of excess over of excess over of excess over of excess over From 50,001 to 100,000 = 750 + 0.7% 50,000 From 100,001 to 200,000 = 1,100 + 0.65% 100,000 From 200,001 to 500,000 = 1,750 + 0.6% 200,000 From 500,001 to 1,000.000 = 3,550 + 0.4% 500,000 From 1,000,001 to 2,000,000 = 5,550 + 0.2% 1,000,000 From 2,000,001 to 5,000,000 = 7,550 + 0.12% 2,000,000 From 5,000,001 to 10,000,000 = 11,150 + 0.06% 5,000,000 From 10,000,001 to 50,000,000 = 14,150 + 0.03% 10,000,000 Over 50,000,000 = 26,150 12
Recent development of commercial arbitration in Cambodia Fee schedule Tribunal Fee (USD) Tribunal Fee (per arbitrator) Sum in Dispute Up to 50,000 = 1,000 of excess over of excess over of excess over of excess over of excess over of excess over of excess over of excess over of excess over = From 50,001 to 100,000 1,000 + 1% 50,000 = From 100,001 to 200,000 1,500 + 0.9% 100,000 = From 200,001 to 500,000 2,400 + 0.7% 200,000 = From 500,001 to 1,000,000 4,500 + 0.6% 500,000 = From 1,000,001 to 2,000,000 7,500 + 0.5% 1,000,000 = From 2,000,001 to 5,000,000 12,500 + 0.3% 2,000,000 = From 5,000,001 to 10,000,000 21,500 + 0.25% 5,000,000 = From 10,000,001 to 50,000,000 34,000 + 0.03% 10,000,000 = Over 50,000,000 46,000 + 0.01% 50,000,000 13
Recent development of commercial arbitration in Cambodia Sample of Fees Dispute of 500,000 USD with one arbitrator appointed by parties Registration fee Administration fee (1,750 + (300,000 x 0.6%)) Tribunal fee (2,400 + (300,000 x 0.7%)) Expenses Total 250 3,550 4,500 (as incurred) 8,300 + expenses Dispute of 1,00,000 USD with three arbitrators appointed by parties Registration fee Administration fee (3,550 + (500,000 x 0.4%)) Tribunal fee (4,500 + (500,000 x 0.6%)) x 3 Expenses Total 250 5,550 22,500 (as incurred) 28,300 + expenses 14
Recent development of commercial arbitration in Cambodia Arbitration clause Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity, performance or termination, shall be referred to and finally resolved by arbitration in the Kingdom of Cambodia in accordance with the Arbitration Rules of the National Commercial Arbitration Center (NCAC Rules) being in force at the time of commencement of arbitration and by reference in this clause the NCAC Rules are deemed to be incorporated as part of this contract. The Tribunal shall consist of ________________* arbitrator(s). *State an odd number. The language of the arbitration shall be __________________. Applicable Law This contract is governed by the laws of ___________________*. * State the country or jurisdiction. 15
Contact details of NCAC Address: Building 65-67-67, Street 136 Sangkat Phsar Kandal I, Khan Daun Penh, Phnom Penh, Kingdom of Cambodia Tel: +855 (0)12 44 00 22 E-mail: info@ncac.org.kh Website: www.ncac.org.kh 16
National Commercial Arbitration Center Thank you 17
