Discover the key features of Cambodia's arbitration regime with Joyce Fong and guest speaker Guillaume Massin from DFDL. This episode delves into the practicalities of Cambodia-related arbitrations, including the role of Cambodian courts in supporting arbitral proceedings, the process for enforcing foreign awards, and the most common grounds for challenge. Tune in to hear about the latest trends shaping Cambodia-related arbitrations, along with practical advice for practitioners navigating this dynamic jurisdiction.

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Transcript:

Intro: Welcome to Arbitral Insights, a podcast series brought to you by our international arbitration practice lawyers here at Reed Smith. I'm Peter Rosher, Global Head of Reed Smith's International Arbitration Practice. I hope you enjoy the industry commentary, insights and anecdotes we share with you in the course of this series, wherever in the world you are. If you have any questions about any of the topics discussed, please do contact our speakers. And with that, let's get started. 

Joyce: Welcome to the latest episode of our Arbitral Insights podcast series. I'm delighted to have Guillaume Massin as my guest today to share with us some Arbitral Insights from Cambodia. Guillaume is the head of the European desk of DFDL. He was previously managing director of DFDL's offices in Thailand and Cambodia, and he's currently a partner in the dispute resolution team. Guillaume has been based in Southeast Asia for almost 20 years, and he has extensive experience in facilitating foreign direct investment into the region. Good afternoon, Guillaume. Thank you for joining me on this podcast today. 

Guillaume: Thank you, Joyce, and thanks to Reed Smith for organizing this very interesting session. We're really delighted to be part of this podcast program that covers not only Cambodia, but the entire region where we operate. and I'm happy to be in touch with you, and I'll make this as interesting, as informative as possible. 

Joyce: Well, I'm looking forward to our discussion already. To kick us off, why don't you give us an overview of the arbitration landscape in Cambodia? Are there separate legislations for domestic and foreign arbitrations? 

Guillaume: Sure. Well, everything started in Cambodia in years 2000, 2005. Cambodia has been quite open, tried to be quite open to foreign investment, and as part of that, tried to make arbitration as a way to protect investment in Cambodia. So we have a 2006 law on commercial arbitration, which actually covered the implementation of the New York Convention. We also have the 2007 Code of Civil Procedures, which also provides key, covers the key aspects of the enforcement of arbitral award. So it's basically, for international awards, it would be more the 2006 Law on Commercial Arbitration, and for domestic arbitration, it would be more the 2007 Code of Civil Procedures that would be the key legislation. In terms of the model, Cambodia has been relying on UNCITRAL, so Cambodia is a party to the New York Convention. From 2009, Cambodia has taken steps to create its own arbitration center. And that was modeled, including for the rules of the National Commercial Arbitration Center of Cambodia. It was modeled after the SIAC rules, so directly linked to the UNCITRAL model for that matter. 

Joyce: That's really helpful to know. I hadn't realized that the SIAC assisted with drafting the institutional rules for the National Commercial Arbitration Centre. Since arbitration is relatively new in Cambodia, how is it perceived by the local business community? Do you often see arbitration agreements in contracts? 

Guillaume: So where are foreign parties involved? Yes, most likely there would be an arbitration agreement. There are still some matters where there could be skepticism from local parties about arbitration, or some matters where enforcement would be more difficult with arbitration, including for enforcement of securities, for instance. But generally, arbitration is well accepted in Cambodia. You're right to say that it's fairly recent. In fact, the arbitration center in Cambodia has been up and running. There have been several intakes and developments with new promotions of arbitrators for the past 10, 15 years. So it's been really part of the picture and really open to the business community, let's say, practically speaking, since 2014, 2015. So we have maybe a 10-year track record, and we see that it's more and more used, including for domestic arbitration. 

Joyce: Yeah, what you've just described is consistent with the position in many developing countries, as you know, it takes time and effort to educate not just the lawyers, but and arguably more importantly, the contracting parties and judiciary about arbitration and its benefits. Even what we've just discussed, is it common for parties to nominate Phnom Penh as the state of arbitration? And when might parties do that? And what are the advantages of selecting Phnom Penh over, say, Singapore or Kuala Lumpur? 

Guillaume: So, indeed, the arbitration in Cambodia, as we said earlier, is administered by the National Commercial Arbitration Centre. And it is generally perceived as being, again, when a foreign party is involved, depending on the type of transaction, but as being a process that is more straightforward and cost-effective, including compared to cost-related to court proceedings. As for the choice of seat of arbitration, it would also depend on whether there's a local party involved in the proceedings, depending also on whether assets would be located in Cambodia. But of course, as you can expect, domestic arbitration is usually cheaper than the international arbitration. And for that matter, it's quite clear that there could be a preference also for local parties in Cambodia to choose Phnom Penh as the seat of arbitration. 

Joyce: For foreign parties, at least, one of the factors which determine C's attractiveness is the local court's willingness to uphold and support the arbitration process. Now, would you describe the Cambodian courts as being generally pro-arbitration? 

Guillaume: In practice, courts would tend to be willing to keep the proceedings locally within the courts. But once arbitration proceedings start, or once there's an arbitration agreement that is raised in a dispute, the court would generally favor arbitration. There is still an option if both parties still agree to go to court instead of arbitration, they can still elect to do so even after the dispute has started. But generally, again, the courts would recognize arbitration as a valid process. 

Joyce: That's really positive to hear that the Cambodian courts respect the autonomy of parties to enter into arbitration agreements. On a slightly related note, can Cambodian courts issue orders such as injunctions or asset preservation orders in support of both domestic and local arbitrations? 

Guillaume: Yes, to be clear, both local courts and our arbitration tribunal can issue injunctions. It could be done also through the local arbitration center. And indeed, it's quite frequent that a case would start with preservative relief being sought locally in Cambodia through court proceedings and then referred to arbitration as a main case. The courts would actually recognize that process. There is always a risk that because you start with the courts in Cambodia, then it can continue with the courts. But if one party really makes clear that the entire dispute should be referred to arbitration, then arbitration will kick in at some point. 

Joyce: Okay. Yeah. I think it's really good to understand that the Cambodian courts really respect the party's decision to arbitrate. So if I may, let's now move on to another hot topic, enforcement. How long does it normally take to seek recognition and enforcement of foreign awards in Cambodia, and what might this process look like? 

Guillaume: Well, as we said, Cambodia is a party to the New York Convention, so it would enforce arbitral awards within re-examining the merits of the case. In practice, recognition and enforcement could take from six months to, let's say, two or three years. That would be depending whether all legal avenues to potentially appeal have been exhausted. Because once you get in the recognition phase, so you go straight to the recognition enforcement by the Court of Appeal in Cambodia, but then there could be a further appeal. And in certain instances, it could go to retrial, so back and forth between the Appeal Court and the Supreme Court. And this is where it might take longer. That being said, we see that in many instances, awards are voluntarily executed at some stage, and also may involve a settlement. 

Joyce: So just to be clear, you mentioned earlier that recognition and enforcement proceedings can take from six months to two or three years if all legal avenues to appeal are exhausted. Are you saying that, assuming that a party who doesn't want to pay attempts to appeal, it takes up to three years, and within three years, parties would get closure on whether or not the award would be enforced, or are you saying that two to three years at the first instance, and then you get more time to appeal to the Supreme Court after that? 

Guillaume: No, it would be, in fact, the first instance would be usually about six months as we voted. Then there might be some public order grounds that can be raised, including by a local party. We try to delay the implementation and enforcement of an award. So that's where it might go to the next stage. However, in practice, we've seen that, It is only, in most cases, the local courts will still try to expedite the process for the re