Local business arbiter updates rules for ‘new normal’ world
COMMERCIAL arbitration in Cambodia has seen a continuing surge of interest over the past decade, swiftly becoming a viable alternative to litigation due to its affordability, flexibility and lack of complex procedures.
And as the Kingdom transitions to the culture of the “new normal”, the trend of parties seeking to resolve commercial disputes out of court is expected to grow substantially over the coming years, according to Phnom Penh-based non-profit commercial dispute resolution institution National Commercial Arbitration Centre (NCAC).
The pioneering business arbiter said in a statement that it recently adjusted its 2014 NCAC Arbitration Rules to “stay up-to-date with the regional and global developments in commercial arbitration as well as to better serve its users”, offering them “a more flexible, efficient and transparent process in resolving their disputes at the NCAC”.
Adopted on March 28 and due to be effective from June 28, the new rules are “a result of many months of hard work in research, analysis and revisions”, through “multiple consultations with legal practitioners as well as both highly experienced local and foreign arbitrators”, it said.
“Some of the major amendments include the changes that allow the NCAC to administer cases and to provide other services under arbitration rules other than the NCAC Arbitration Rules.
“A provision has been included to further address the independence and impartiality of arbitrators by empowering the tribunal to take any measure necessary to avoid a conflict of interest of an arbitrator arising from a change in party representation,” the NCAC said.
The 2021 rules will purportedly introduce “Expedited Procedure and the Emergency Arbitrator” features, which any party may request if all parties agree and if the sum is not more than the equivalent of $3 million, or in case of properly-established urgency.
“Under this Expedited Procedure, the final award will be made within 270 calendar days from the date the tribunal is constituted,” the NCAC said.
Its president Bun Youdy claimed that 270 days is “reasonable and implementable” at this time, noting that this is three months longer that the timeframe allotted by the Singapore International Arbitration Centre (SIAC).
“The reason that we did not include this feature in our 2014 arbitration rule is because NCAC was a new centre at that time,” Youdy told The Post. “We now have more experience in case management and our arbitrators [have] also gain[ed] more experience.”
The NCAC added: “Prior to the constitution of the tribunal, any party may apply for an interim measure from an emergency arbitrator, whose decision on the application is made within 15 calendar days from the appointment date.”
The new arbitration rules also “set a new way of determining the commencement date of arbitration proceedings, in which it will come in handy, especially with regard to disputes having multiple respondents.
“In addition, in responding to the growing demands of electronic-communication-means uses in this ‘new normal’ environment, the new rules officialised the use of videoconference or similar means of communication technology in all arbitration proceedings.
“The new rules further set the time limit for the tribunal in declaring arbitration proceedings closed so that the parties can have better expectation in term of timeline toward to the award issuance,” it added.
Youdy emphasised that shortening the time limit would not compromise the quality of justice, saying “justice delayed is justice denied”.
“It is even more relevant for commercial disputes. Businessmen need a prompt resolution to their disputes. Time is money and thus efficiency is important. In term of the quality, the rules offer the same safeguard – including the scrutiny of the award by the General Secretariat – comparing to regular procedure.”
Technology has seen tremendous advancements over the past decades, leading to an explosion in the options available for remote services, he said, calling for everyone involved in future proceedings to be understanding, in the interest of efficiency and predictability.
As of March, the NCAC has received and administered 25 cases, including international disputes, under the 2014 arbitration rules with the aggregate sums in dispute topping $72 million, it said. While no new cases have been filed this year, 2020’s nine cases broke 2018’s record of seven, up from just three in 2019.
“In 2020 alone, the total sum in dispute of all cases received was almost $29 million, representing around 35 per cent of the total amount in dispute of all cases since the NCAC received its first case in 2015,” according to the commercial arbitration body, which was established by the 2006 Law on Commercial Arbitration.
Cambodia topped the list of geographical origin of the parties concerned, at 71 per cent, followed by mainland China (13 per cent), Malaysia (nine per cent), Hong Kong (three per cent), Bermuda (two per cent) and Singapore (two per cent), NCAC data show.
Real estate and construction accounted for the most cases, followed by banking and finance, and international trade, Youdy highlighted.
The NCAC chief has said that foreign investment is a powerful force for economic growth and cross-border trade.
According to Youdy: “NCAC was born out of the desire to enhance the use of alternative dispute resolution in Cambodia and to handle the increasing number of international and domestic commercial disputes which is correlated with the unprecedented economy growth.”
However, he told The Post, much work remain to be done. “NCAC is working hard to ensure the quality of case management and the continuous improvement of arbitrators’ capacity as well as to stay up-to-date with the development in that space [in the] international scene.
“We aim to consistently improve our service and enhance our infrastructure,” he said. “Independence and impartiality are … deeply inscribed in our core commitment[s] and value[s].
He stressed that investment in information technology infrastructure and tools remains high on the list of NCAC’s priorities, and is guided by constant experience-sharing with the leading regional commercial arbitration bodies.
“The beauty of commercial arbitration under our rules is that parties can agree on the manner the proceeding to be conducted, … [including] an electronic submission,” he said, adding that a first online hearing conducted in December.
“Witness are crossed examined online as well. There are few more on-going cases that parties are likely to opt for an online hearing,” Youdy said.
HBS Law managing partner Ly Tayseng emphasised that the success of commercial arbitration “relies on good arbitration law and rules to ensure the transparency and efficiency of process, and impartiality and professionalism of arbitrators.
“Hopefully, Cambodian courts and other relevant government authorities will provide necessary support to create a conducive condition for commercial arbitration to grow quickly as it is needed by business community,” he said.
Youdy called for all-round commitment and support to ensure the success of commercial arbitration in the Kingdom as a dispute settlement tool, and facilitate its integration into civil justice systems.
“In order for a commercial arbitration to be fully functional as an alternative dispute resolution mechanism, other stakeholders need to do their part as well.
“Since lawyers advise business and perform the advocacy role, their knowledge in the arbitration is vital. In addition, if we look into every jurisdiction where commercial arbitration develops very well, we see an arbitration-friendly judiciary.”