Law Would Let Businesses Pick Arbitrators

When the National Assembly’s Fi­nance Committee takes into con­si­deration the Law on Commercial Ar­bitration on Monday, the draft law will no longer state that the Min­istry of Commerce will select ar­bitrators for business disputes, Mao Thura, undersecretary of state at the Ministry of Commerce, said Wednesday.

A draft of the law produced earlier this year called for a National Ar­bi­­tration Center to be set up under the Ministry of Commerce with the au­­thority to issue a list of qualified ar­bitrators for business disputes.

But business experts said businesses wanted to choose their own arbitrators, rather than have the Min­istry of Commerce control the pro­cess.

Businesses will now be allowed say in their contracts who they want to act as arbitrators, and will be able to chose Khmers or foreigners to fill that role, Mao Thura said.

“For example, in a bank dispute the two parties could select those skilled in banking,” Mao Thura said.

“Business people do not like to go to the court—they like arbitrators to solve the disputes instead,” he said.

An arbitrator’s decision is legally binding. Therefore, once the arbitrator has rendered his decision, it is then sent to the court system to be enforced.

If the ministry had chosen the ar­bi­trators, “international companies would seek arbitration in Singapore ra­ther than settle disputes here,” a legal ex­pert familiar with the draft said. “Businesses want to be able to choose independent arbitrators.”

Adam Sack, general manager of the Mekong Private Sector Devel­op­ment Facility at the World Bank-International Finance Corporation, said the facility is strongly encouraging the development of a commercial arbitration system.

“Businesses, both domestic and foreign, have expressed frustration with their abilities to resolve disputes in the court system,” he said.

He added that parts of the law that diverge from international standards are being reviewed so that an independent arbitration system can be put in place.



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