National Commercial Arbitration Center Development of Commercial Arbitration
National Commercial Arbitration Center Development of Commercial Arbitration in Cambodia Mr. BUN Youdy, Arbitrator Member of the NCAC Executive Board Member of Euro. Cham Board Intercontinental Hotel Euro. Cham 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? 3
Why choose commercial arbitration in Cambodia? What investors/companies look for before investing in a country 1. 2. 3. 4. 5. 6. 7. 8. 9. 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 Figure 1 - What are the time, cost and numbers of procedures to resolve a commercial dispute through the courts? , Enforcing Contracts Methodology, World Bank 4
Why choose commercial arbitration in Cambodia? Ranking of enforcement of contracts in Cambodia TOPICS Enforcing Contracts DB 2015 Rank 178/189 DB 2014 Rank 178/189 Change in Rank No change Doing Business Report (2015, World Bank) Ø 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 q Difficulties with the courts q Limitation of technical or specialized knowledge of judiciary 6
Why choose commercial arbitration in Cambodia? How the NCAC provides a stronger alternative q q q 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 q 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 q May 2006: Arbitration Law q Aug. 2009: Sub-Decree No. 124 on Organization and q q q 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 q NCAC is an independent organization Roles and Functions of NCAC q Promote arbitration: promote the settlement of commercial disputes through arbitration in Cambodia q Rules: create the necessary infrastructure and rules for the administration of arbitration cases in Cambodia q Standards: ensure high quality standards of arbitration are maintained in Cambodia, including setting and ensuring the qualifications of arbitrators q Training: provide education and training to arbitrators and aspiring arbitrators in Cambodia 10
Recent development of commercial arbitration in Cambodia Fee schedule q Registration fee: flat rate of 250. 00 USD q Administration fee: graduated, based on the sum in dispute q Arbitrator appointment fee: flat fee of 300. 00 USD per arbitrator if the parties fail to appoint an arbitrator on their own q Tribunal fee: graduated, based on the sum in dispute q 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) Up to 50, 000 From 100, 001 From 1, 000, 001 From 10, 001 50, 000, 000 14, 150 26, 150 0. 12% + = 0. 2% + 11, 150 = 0. 4% + 7, 550 = 0. 6% + 5, 550 = 10, 000 to 0. 65% + 3, 550 = 5, 000 to Over 0. 06% + 0. 03% of excess over of excess over 0. 7% + 1, 750 = 2, 000 to 5, 000, 001 From 1, 000 to 2, 000, 001 From + 1, 100 = 750 = 500, 000 to 750 = 200, 000 to 500, 001 From 200, 001 100, 000 to = to Arbitration Fee 50, 001 Sum in Dispute 50, 000 100, 000 200, 000 500, 000 1, 000 2, 000 5, 000 10, 000 12
Recent development of commercial arbitration in Cambodia Fee schedule – Tribunal Fee (USD) Up to 50, 000 From From 2, 000, 001 From 50, 000 = 5, 000 = 10, 000 to = to 10, 001 Over = 2, 000 to 5, 000, 001 = 1, 000 to = 500, 000 to 1, 000, 001 = 200, 000 to 500, 001 From 200, 001 100, 000 to = 50, 000 = to 100, 001 50, 001 Tribunal Fee (per arbitrator) Sum in Dispute = 1, 000 + 1, 500 4, 500 12, 500 + 21, 500 + 34, 000 0. 25% + 46, 000 0. 3% 0. 5% 0. 6% + 0. 7% + 7, 500 0. 9% + 1% + 2, 400 0. 03% + 0. 01% of excess over of excess over of excess over 50, 000 100, 000 200, 000 500, 000 1, 000 2, 000 5, 000 10, 000 50, 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 250 Administration fee (1, 750 + (300, 000 x 0. 6%)) 3, 550 Tribunal fee (2, 400 + (300, 000 x 0. 7%)) 4, 500 Expenses Total (as incurred) 8, 300 + expenses Dispute of 1, 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
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