Which Comes First: Bankruptcy Law or a Commerce Court

As the National Assembly continued debating a draft law on bankruptcy Monday, an SRP lawmaker questioned the legitimacy of the draft since bankruptcy cases are required by the law to be handled by a non-existent com­mercial court.

SRP lawmaker Yim Sovann said during Monday’s National Assembly debate that the bankruptcy law, if passed, could not be implemented properly without the creation of a com­mercial court.

“We need a specific court, such as a commercial court, with well-trained judges with expertise in commerce and trade,” he said, as the Assembly approved 62 of the draft’s 84 articles.

Commerce Ministry Secretary of State Kem Sithan, who was on hand to defend the law for the government, sidestepped Yim So­vann’s concern.

“The law is aimed to fight against bad people who may try to cheat,” he said.

CPP lawmaker Cheam Yeap, who chairs the Assembly commission on banking, said by telephone that passing the draft law is more important that waiting for a commercial court to be set up.

“Having a law is better than no law,” he said. Cheam Yeap add­ed that the government is actively working on creating a commercial court.

Commerce Undersecretary of State Mao Thora said by telephone that it will take some time to establish a commercial court, but in the meantime, judges at the provincial and municipal courts—which handle civil cas­es—will be trained to hear bank­ruptcy cases.

“We would provide some ad­vice to the civil court so that it un­derstands the specifics of bankruptcy disputes,” he said, adding that he expects the law to be pass­ed today.

Yim Sovann said later by telephone that the current court system is corrupt and that the international business community would not trust it to handle bankruptcies.

“I think the law is good, but the court is bad,” he said.

A local attorney, who spoke on condition of anonymity, said that whether a commercial court is established or not, the bankruptcy law’s effectiveness would de­pend on the knowledge of the judges who rule on it.

“There’s only so much capacity in the system as there is,” he said. “It’s all a question of where they get the expertise to handle these situations.”

     (Additional reporting by James Welsh)

 

 

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