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The Fine 0rint( !egal 1 ta'

insight2&orking with partner
disputes through the Arbitration
3ill
3y $ebastian 0awlita and Thitsar 4hine 5 $unday( .6 June ,-.7
A common concern for investors is dispute resolution: If the
relationship with a business partner turns sour, will I be at a
disadvantage because the other party can influence the judge?
In Myanmar( as in other deeloping countries( foreign inestors tend to
distrust local courts8 They fear that the 9udge may be inherently biased
towards the local party or een corrupt8 They worry about the length of time
that it may take until the case is finally decided8 If it is a high:profile case(
there is the possibility ; from the standpoint of the inestor( an unwelcome
possibility ; that the court proceedings will get press coerage8
#sually( inestors prefer arbitration oer dispute resolution by the courts as
they consider arbitration to be faster( more professional( less prone to local
bias and less likely to result in dirty laundry getting washed in public8
Howeer( arbitration in Myanmar has its shortcomings8 There is no
arbitration institute8 An arbitral award has to be enforced by a court( and
courts in Myanmar in practice assume wide discretion in setting aside
arbitral awards8 This means that( after haing gone through all the hassle
with arbitration( a party may still find it necessary to sue the other party in
court8 !ocal businesspeople are therefore wary to about agreeing on an
arbitration clause when they hae business dealings amongst themseles8
Foreign inestors prefer arbitration abroad ; preferably( of course( in their
home 9urisdiction8 Howeer( they also know that their local partner is not
likely to agree to this( so they suggest arbitration in a third country8 #sually(
this is $ingapore ; a country with a deeloped( stable and highly
professional 9ustice system and an internationally renowned arbitration
centre8 <egrettably( howeer( there hae been no reported cases of any
foreign arbitral award being enforced in Myanmar for the last few decades(
and inestors are wise to act on the assumption that in practice( their award
=if they win arbitration abroad> will be worthless here8
This may change soon( though8 Myanmar acceded to the ?ew @ork
Conention on the <ecognition and *nforcement of Foreign Arbitral
Awards with effect as of June .6( ,-./8 $o far( there has been no legislation
implementing the Conention( but on May ,6( the draft of an arbitration
law =AArbitration 3illB> was published8 If enacted( there will be a system to
enforce foreign arbitral awards in Myanmar8
Cf course( it remains to be seen how easy enforcement will be in practice8
Howeer( the enactment of the law will be a ma9or step for Myanmar
toward recognition as a place where inestors can safely do business( and
inestors are eagerly awaiting this step8
The bill( which to a large e'tent is based on a model te't proided by
#?CIT<A! =#nited ?ations Commission on International Trade !aw>( is
diided into two parts( the first part dealing with arbitration in Myanmar
and the second part with the enforcement of foreign arbitral awards8 The
bill does not specify which court is competent for enforcement8 It is to be
hoped that enforcement will be centralised at one court so as to Duickly
create a centre of e'pertise within the 9ustice system and ensure that
enforcement cases are handled by 9udges with e'perience in the matter8
The court may refuse to enforce a foreign arbitral award only on the
grounds set forth in the bill8 This part of the bill is a literal translation of the
#?CIT<A! model te't8 Hopefully( courts will e'ercise restraint when
inoking these grounds8
$ebastian and Thitsar are consultants with 0olastri &int 1 0artners !egal 1
Ta' Adisors8
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Copyright E ,-.7 The Myanmar Times8 All rights resered8
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