Embed Size (px)
Citation preview
Arbitration in MyanmarSebastian Pawlita, Wint Thandar Oo27 and 28 August 201427 and 28 August 2014
Arbitration Act 1944
• Distinctive features of arbitration in Myanmar:y– No arbitration centre– Important role of the ordinary courts
Enforcement in Myanmar difficult– Enforcement in Myanmar difficult– Foreign arbitral awards (probably) cannot be enforced in
Myanmar, and Myanmar arbitral awards (probably) cannot beenforced abroadenforced abroad
Arbitration Act 1944
• Usually, foreign investors prefer arbitration overy, g pdispute resolution by the courts:The foreign party…
fears that the judge may be inherently biased towards the local– …fears that the judge may be inherently biased towards the localparty or even corrupt;
– …worries about the length of time that it may take until the caseis finally decided;is finally decided;
– …worries that in court, the case may be decided by a judge whoknows nothing about the business;
i (if it i hi h fil ) th t th t– …worries (if it is a high-profile case) that the case may get presscoverage;
– … wants proceedings to be conducted in English.
Arbitration Act 1944
• However, foreign investors also distrust arbitrationgin Myanmar and usually prefer arbitration in theirhome jurisdiction or a neutral jurisdiction (e.g. inSingapore):g p )The foreign party…– …doubts that there are suitable arbitrators in Myanmar as there
is no arbitration centre in Myanmar;– …worries about court intervention in the selection of arbitrators,
the arbitration procedure and the enforcement of arbitral awards;– …worries that the arbitral tribunal is biased against him if the
l l t i t t titlocal party is a state entity;– …worries that he cannot enforce a winning award
against a state entity.
Arbitration Act 1944
• The local party usually prefers dispute resolution inp y y p pMyanmar:The local party…
is worried about unknown arbitration procedures abroad;– …is worried about unknown arbitration procedures abroad;– …worries about the costs if arbitration is done abroad.
Arbitration Act 1944
• A typical arbitration clause according to theyp gArbitration Act 1944 (abbreviated): Any dispute arising out of this Agreement shall be settled in the
Republic of the Union of Myanmar by arbitration in accordanceRepublic of the Union of Myanmar by arbitration in accordancewith the provisions of the Arbitration Act, 1944.
The tribunal shall consist of two arbitrators, one to be appointedby each Partyby each Party.
Should the arbitrators fail to reach an agreement, the disputeshall be referred to an umpire nominated by the two arbitrators.The venue of the arbitration shall be in Yangon The venue of the arbitration shall be in Yangon.
The language of the arbitration shall be English.
Arbitration Act 1944
• Can one side foil arbitration by simply noty p yappointing an arbitrator?Section 9 lit. b Arbitration Act (simplified):"If party B does not appoint an arbitrator within 15 days after party AIf party B does not appoint an arbitrator within 15 days after party Ahas notified party B that party A has appointed an arbitrator, thenparty A may appoint his arbitrator to decide on the case as solearbitrator However the competent court may set aside thisarbitrator. However, the competent court may set aside thisappointment."
Arbitration Act 1944
• What happens if the two arbitrators cannot agree onpp gthe award?– The two arbitrators must appoint, within one month after their
appointment a third person ("umpire") to decide the case if theappointment, a third person ( umpire ) to decide the case if thetwo arbitrators disagree (section 2 First Schedule).
– If the two arbitrators do not appoint an umpire, the umpire isultimately appointed by the competent court at the request ofultimately appointed by the competent court at the request ofeither party (section 8 para. 2 Arbitration Act).
– The two arbitrators have to render their award within 4 monthsafter their appointment (section 3 First Schedule)after their appointment (section 3 First Schedule).
Arbitration Act 1944
• What happens if the two arbitrators cannot agree onpp gthe award? (continued)– The umpire has to render the award within 2 months after either
(i) the 4 months period has elapsed or (ii) the arbitrators have(i) the 4 months period has elapsed or (ii) the arbitrators havenotified him that they cannot agree (section 5 First Schedule).
– If the umpire fails to act, he may ultimately be replaced by anumpire appointed by the competent court at the request of eitherumpire appointed by the competent court at the request of eitherparty (section 8 para. 2 Arbitration Act).
Arbitration Act 1944
• Strong position of the ordinary courts in arbitrationg p yproceedings:The competent court may at the request of either party…
appoint arbitrators or an umpire if the parties cannot agree on– …appoint arbitrators or an umpire if the parties cannot agree onthe appointment (section 8 para. 2 Arbitration Act);
– …appoint arbitrators or an umpire to replace the original personsif they failed to act (section 11 para 1 Arbitration Act);if they failed to act (section 11 para. 1 Arbitration Act);
– …remove arbitrators or an umpire who have "misconducted"themselves (section 11 para. 2 Arbitration Act);
d th bit ti t t t h ff t if ll– …order the arbitration agreement to cease to have effect if allthe arbitrators or the umpire are removed for failure to act ormisconduct (section 12 para. 2 lit. b Arbitration Act);
Arbitration Act 1944
• Strong position of the ordinary courts in arbitrationg p yproceedings (continued):The competent court may furthermore, amongst others…
answer questions of law if requested to do so by the arbitrators– …answer questions of law if requested to do so by the arbitratorsor the umpire (section 13 lit. b Arbitration Act; the award mayeven be stated in the form of a question to the court);
remit an award back to the arbitrators where "an objection to– … remit an award back to the arbitrators where an objection tothe legality of the award is apparent on the face of it" and fix aperiod of time for the arbitrators or the umpire to reconsider theaward; the award becomes void if this time period lapses withoutaward; the award becomes void if this time period lapses withoutthe award being changed (section 16 para. 3 Arbitration Act)
Arbitration Act 1944
– …set aside an award for the following reasons (section 30Arbitration Act):– The arbitrators or the umpire misconducted themselves or
the proceedings;– the award was made after either (i) a court order
superseding the arbitration had been issued or (ii) thesubject-matter had become pending at an ordinary court,the arbitrators or the umpire had been informed about thisfact and the ordinary court had not granted a stay of thecourt proceedings;
– the award was improperly procured or is otherwise invalid.
Arbitration Act 1944
• Enforcement of an arbitral award in Myanmar:y– When the arbitrators or the umpire have made the award, they
shall sign it and inform the parties in writing accordingly (section14 para. 1 Arbitration Act).p )
– Either party may request the arbitrators or the umpire to submitthe award to the competent court (section 14 para. 2 ArbitrationAct).)
– The court checks whether the award should be (i) modified orcorrected (section 15 Arbitration Act), (ii) remitted to thearbitrators or the umpire for reconsideration (section 16p (Arbitration Act) or (iii) set aside (section 30 Arbitration Act).
Arbitration Act 1944
• Enforcement of an arbitral award in Myanmary(continued):– If the court finds no fault with the arbitral award, it pronounces
judgment according to the award and a decree (section 17judgment according to the award and a decree (section 17Arbitration Act).
– The decree can be enforced like an "ordinary" decree from acourtcourt.
Arbitration Act 1944
• Problem: Courts in Myanmar seem to assume wideydiscretion in setting aside arbitral awards– If the losing side does not want to follow the arbitral award, it will
request the court to set it asiderequest the court to set it aside.– Courts are apparently likely to heed such a request.– Consequently, the whole case has to be litigated again before
the ordinary court the arbitration proceedings were a waste ofthe ordinary court the arbitration proceedings were a waste oftime and money.
– Local businesspeople are therefore wary about going toarbitration if they have business dealings amongst themselvesarbitration if they have business dealings amongst themselves.
Arbitration Act 1944
• Can a Myanmar arbitral award be enforced abroad?yThe Myanmar party has won arbitration according to the MyanmarArbitration Act against the foreign party. Can the Myanmar partyenforce the arbitral award?– If the foreign party has assets in Myanmar: Yes, enforcement
is possible by seizing the assets in Myanmar.– If all the assets of the foreign party are abroad: No aIf all the assets of the foreign party are abroad: No, a
Myanmar arbitral award can (in all likelihood) not be enforcedabroad as reciprocity is missing: Myanmar does not enforceforeign arbitral awards, so foreign jurisdictions also do notg , g jenforce Myanmar awards.
Arbitration Act 1944A bit ti (P t l d C ti ) A t 1937Arbitration (Protocol and Convention) Act 1937
• Can a foreign arbitral award be enforced ingMyanmar?– In all likelihood, no. There have been no reported cased over
many decadesmany decades.– Enforcement is (theoretically) only possible if the award was
rendered in a country that signed the (long-forgotten) GenevaProtocol on Arbitration Clauses (1923) or the (likewise long-Protocol on Arbitration Clauses (1923) or the (likewise longforgotten) Geneva Convention on the Execution of ForeignArbitral Awards (1927).
– E g neither Singapore nor Hong Kong have signed the ProtocolE.g. neither Singapore nor Hong Kong have signed the Protocolor Convention.
New York Convention 1958A bit ti Bill 2014Arbitration Bill 2014
• What is the New York Convention?– The New York "Convention on the Recognition and Enforcement
of Foreign Arbitral Awards" requires contracting states to giveeffect to private arbitration agreements and to recognize andp g genforce arbitration awards from other contracting states.
– Myanmar acceded with effect as of 15 July 2013.– Once the New York Convention is implemented in Myanmar itOnce the New York Convention is implemented in Myanmar, it
should be possible to– enforce Myanmar Arbitral Awards abroad and
enforce foreign arbitral award in Myanmar– enforce foreign arbitral award in Myanmar.– Presently, implementing legislation only exists as a draft
("Arbitration Bill").
Arbitration Bill 2014
• The Arbitration Bill…– … is, to a large extent, based on a model text provided by
UNCITRAL (United Nations Commission on Trade Law);– is divided into two parts:… is divided into two parts:
– The first part applies if the place of arbitration is in Myanmar,andthe second part applies to the enforcement of foreign arbitral– the second part applies to the enforcement of foreign arbitralawards;
– … will, if enacted, replace the 1944 Arbitration Act and the 1937Arbitration (Protocol and Convention) ActArbitration (Protocol and Convention) Act.
Arbitration Bill 2014
• Enforcement of foreign arbitral awards: According tog gthe Bill…– …foreign arbitral awards can be enforced if they are the result of
a commercial dispute and were made at a place "covered by aa commercial dispute and were made at a place covered by alisted international convention and notified in the State Gazetteby the President" (section 46);
– the party seeking enforcement has to apply to the competent…the party seeking enforcement has to apply to the competentcourt in Myanmar;
– …if the court does not find fault with the award, it has to enforceit as if it were a decree of a Myanmar court (section 51);it as if it were a decree of a Myanmar court (section 51);
– … the court may refuse enforcement only on the grounds setforth in the Bill (section 50 which is a literal translationof the UNCITRAL model text)of the UNCITRAL model text).
