Cambodia
Guide to Arbitration Rules and Procedures in Cambodia
Our Country Chapters set out key aspects of the arbitration framework of each jurisdiction highlighted in our website, covering basics like judicial hierarchy and domestic arbitral institutions to substantive issues such as conflicts of laws and the extent of adoption of the UNCITRAL Model Law. New topics will be added periodically, with recent additions such as responding to court proceedings in breach of the arbitration agreement, tribunal powers and jurisdictions, and more.
1. Legal System and Framework
The Kingdom of Cambodia is a constitutional monarchy that was largely influenced by the continental civil law tradition. However, with the rapid regional integration and globalisation of economies, the Cambodian legal system has evolved. Currently, the Cambodian legal system is considered to be a hybrid system as it has absorbed and been inspired by various foreign law concepts (including features from the common law system countries) as a result of foreign aid and assistance with its legal and judicial reforms from different countries.
The framework and process of law making is outlined in the supreme law of the land – the Constitution of Cambodia. According to the Constitution, senators, members of the National Assembly, and the government have the right to initiate legislation. In practice, most draft laws are introduced by the Government.
In Cambodia, the court system is divided into three levels as follows:
- The Provincial/Municipal Court is the court of first instance located in all cities and provinces. The jurisdiction of this court covers a particular geographical area where the court is located. Save for military offences, the Provincial/Municipal Court hears all types of cases including civil and criminal matters.
- The Courts of Appeal are located in Phnom Penh, Battambang, Tbong Khmum, and Preah Sihanouk. These courts hear all cases on appeal from the court of first instance.
- The Supreme Court is the highest court located in Phnom Penh with jurisdiction covering the whole territory of Cambodia. This court adjudicates on questions of law for cases appealed from the Courts of Appeal.
Original jurisdiction over recourse, recognition and enforceability of an arbitral award rests with the Court of Appeal. The Supreme Court shall be the final court to decide on any appeal of the party who is not satisfied with the decision of the Court of Appeal. The actual enforcement of an arbitral award is done in accordance with the Civil Procedural Code which is through the court of first instance.
The Law on Commercial Arbitration (“Arbitration Law“) dated 6 March 2006 and Law on Adoption and Implementation of the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards dated 23 July 2001 (“Law on Recognition of Foreign Arbitral Award“) are the main sources of law for international commercial arbitration in Cambodia.
Cambodia’s Arbitration Law, adopted in 2006, was modelled after the UNCITRAL Model Law on International Commercial Arbitration (the original 1985 version) without including features introduced under the 2006 amendments to the UNCITRAL Model Law (e.g., provision on the form of arbitration agreements and extensive revisions of the provision in relation to interim measures).
There is no express legal provision in relation to the distinction between international and domestic arbitrations.
The Arbitration Law adopts the same definition of international arbitration as that of the Model Law. An arbitration is “international” if:
- The parties to an arbitration agreement have their places of business in different States at the time of the conclusion of that agreement; or
- One of the following places is situated outside the State in which the parties have their places of business:
- the place of arbitration, if determined in, or pursuant to, the arbitration agreement;
- any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or
- The parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.
The Arbitration Law does not provide an express definition of domestic arbitration.
Interference from the judiciary in an arbitration is prohibited except where provided for by the Arbitration Law. If a claim which is subject to an arbitration agreement is brought before a court, that court shall refer the parties to arbitration if so requested by a party unless the court finds that the arbitration agreement is null and void or cannot be implemented.
As a matter of practice, a party may use the court to delay or frustrate an agreement to arbitrate if the arbitration agreement is ambiguous.
Parties may request the courts’ assistance during an arbitration, including in relation to:
- Requesting for interim measures (Article 9, Arbitration Law);
- Appointment of arbitrators if there is a lack of consensus (Article 19, Arbitration Law);
- Deciding on the suitability of a challenged arbitrator (Article 21, Arbitration Law);
- Terminating the mandate of an arbitrator for failure to perform his functions without undue delay (Article 22, Arbitration Law);
- Ruling on the tribunal’s jurisdiction, including objections with respect to the existence or validity of the arbitration agreement (Article 24, Arbitration Law); and
- Taking of evidence (Article 35, Arbitration Law).
2. Arbitral Institutions
The National Commercial Arbitration Centre (“NCAC“) is a non-profit institution based in Phnom Penh and was established under the Arbitration Law in 2006. It officially commenced operation on 4 March 2013 to provide businesses with a commercial dispute resolution alternative to the court system. NCAC has administered a total of 25 cases with a total sum in dispute of more than USD$72 million between 2015 to September 2020, with 75% of these cases conducted in English.
At present, there are currently 64 arbitrators of various nationalities on NCAC’s panel list including Cambodian, Canadian, Chinese, Singaporean, French, and American.
The key features of NCAC include:
- Lower costs of conducting arbitration in NCAC in comparison with other international or regional arbitral institutions;
- The capacity to conduct arbitral proceedings in any language under the arbitration rules of NCAC;
- The enforceability of an arbitral award issued by NCAC in more than 160 countries, since Cambodia is also a member of the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards.
3. Confidentiality
The Arbitration Law is silent on the parties’ obligation in relation to confidentiality.
However, as NCAC is the only national commercial arbitration centre to date, and NCAC’s arbitration rules (“NCAC Rules“) must be used if NCAC is chosen, the NCAC Rules on confidentiality will generally apply to arbitrations in Cambodia. Notwithstanding this, there is no default rule as to whether ad hoc arbitration is confidential, and this would depend on parties’ agreement and/or the arbitral tribunal’s directions.
Under the NCAC Rules, all meeting and hearings shall be in private, and any recordings, transcripts or documents used shall remain confidential unless otherwise agreed by the parties to the arbitration. The deliberations of the arbitral tribunal shall be confidential, and all persons involved directly or indirectly in the arbitration are bound by secrecy and shall not disclose facts related to, or learned through, the arbitration without the prior written consent of all parties.
4. The Law of the Arbitration and Conflicts of Law
Cambodian law allows the parties to choose the law applicable to arbitral proceedings, failing which it will be determined by the tribunal as it considers appropriate (Article 27 of the Arbitration Law). This is consistent with the UNCITRAL Model Law. The basic approach is similar to most legal systems where the seat of arbitration is an exclusive criterion for determining the law applicable to the arbitral proceedings in the absence of explicit selection by the parties.
The law applicable to the substance of the parties’ dispute will be determined based on the law expressly chosen by the parties in the contract. In the absence of such agreement, the applicable law will be determined based on what the tribunal considers appropriate (Article 36 of the Arbitration Law).
Cambodian law does not restrict the parties from choosing a foreign law to govern the contract. Hence, the arbitral tribunal would be able to recognise the law of another jurisdiction to apply to their substantive obligations with respect to the subject matter of the dispute.
Cambodian law does not set out specific mandatory rules in respect of substantive law where Cambodia is the seat of arbitration.
There is no specific provision in determining the law applicable to claims in tort under Cambodian law. Hence, where required, the rules in determining the law applicable to general claims is likely to be applied to claims in tort.
Under Cambodian law, there is no express distinction between the law applicable to the arbitration and the law governing the arbitration agreement.
The limitation period for claims is determined under general contract law (and not the law governing the arbitral proceedings). Where Cambodia is the seat of an arbitration involving a dispute to be determined by a foreign law, any question in relation to limitation periods will be determined by such foreign law. Where the substantive law governing the dispute is Cambodian law, the claim for compensation for damages under a contract shall be made within five years from the time when the damages occurred (Article 406 of the Cambodian Civil Code). However, the claim for compensation for damages on account of a tortious act shall be made within (a) three years from the time that the injured party or such party’s legal representative became aware that he/she is entitled to seek damages against the tortfeasor, or (b) 10 years from the time that the tort occurred (Article 765 of the Cambodian Civil Code).
5. Arbitration Agreements
The formal requirement is that the arbitration agreement must be in writing. An arbitration agreement is in writing if it is in a document signed by the parties, or in an exchange of letters or other means of electronic telecommunication which provide a record of the agreement, or in an exchange of statements of claims and defence in which the existence of an agreement is alleged by one party and is not denied by another party (Article 7 of the Arbitration Law).
There is no further specific legal requirement for an arbitration agreement to be binding and enforceable apart from the legal validity and enforceability criteria for contracts as stipulated under the Cambodian Civil Code.
Electronic arbitration agreements are recognised if there is sufficient evidence of agreement of the parties to such arbitration agreements (Article 7 of the Arbitration Law).
An arbitration agreement can be incorporated by way of reference into a contract or any other documents recording the agreement, provided that such contract or documents shall be made in writing and the reference is such as to make the arbitration agreement part of such contract or documents.
Under Cambodian law, there are no clear regulations on the specific matters that are capable of being settled by arbitration, except that the dispute needs to be of a commercial nature. The Arbitration Law also sought to ensure that the term “commercial” shall be accorded a broad interpretation (Articles 1 & 2 of the Arbitration Law).
Based on Article 2 of the Arbitration Law, the term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions:
- any trade transactions for the supply or exchange of good or services;
- distribution agreements;
- commercial representation or agency;
- factoring;
- leasing;
- construction works;
- consulting;
- engineering;
- licensing;
- investment, financing, banking, and insurance;
- exploitation agreements or concessions;
- joint ventures and other forms of industrial or business co-operation; and
- carriage of goods or passenger by air, sea, rail or road.
The parties shall agree on the scope of the arbitration agreement. Therefore, a non-contractual claim will usually not be arbitrable unless the relevant arbitration agreement is sufficiently broad to cover non-contractual claims connected to the subject matter of the contract. The arbitral tribunal will decide whether it has jurisdiction over the claim.
The arbitration clause that forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not result in the invalidity of the arbitration clause (Article 24 of the Arbitration Law).
6. Proceedings in Breach of the Arbitration Agreement
Yes. If a party to an arbitration agreement initiates an action in domestic court, the court may direct the parties to resolve the dispute by arbitration unless the court finds that the agreement is null and void, inoperative, or incapable of being performed in accordance with Article 8 of the Law on Commercial Arbitration dated 7 March 2006 (“LCA“).
Based on Article 8 of the LCA, a party may file an application to the court requesting a stay of proceedings and referral of the dispute to arbitration based on the agreement of the parties. As a matter of practice, this application should be submitted before the party has taken any other steps in the court proceedings.
There is no difference in procedural steps in Cambodian courts if the arbitration is seated in a foreign jurisdiction.
No. There is no concept of an anti-suit injunction under Cambodian law, although a party may file for a stay of proceedings as noted in Question 6.2 above.
Under Cambodian law, a party is entitled to claim damages from the other party (i.e. for legal costs and expenses) incurred in defending against the court proceeding initiated by such other party in breach of an arbitration agreement.
7. Jurisdiction and Powers of the Arbitral Tribunal
Under Cambodian law, there is no specific regulation on the types or subject matter of disputes that can be referred to arbitration, except that the dispute needs to be of a commercial nature (Article 1 of the LCA).
Based on Article 2 of LCA, the term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. These include, but are not limited to, the following transactions:
- any trade transactions for the supply or exchange of goods or services;
- distribution agreements;
- commercial representation or agency;
- factoring;
- leasing;
- construction works;
- consulting;
- engineering;
- licensing;
- investment, financing, banking, and insurance;
- exploitation agreements or concessions;
- joint ventures and other forms of industrial or business co-operation; and
- carriage of goods or passenger by air, sea, rail or road.
Although non-contractual claims of a commercial nature are arbitrable in principle, such claims must fall within the scope of the arbitration agreement. Therefore, a non-contractual claim will usually not be arbitrable unless the relevant arbitration agreement is sufficiently broad to cover such non-contractual claims connected to the subject matter of the contract.
The arbitral tribunal has the jurisdiction to determine whether a claim is arbitrable.
The powers of an arbitral tribunal are listed under Article 55 of the National Commercial Arbitration Centre’s Arbitration Rules dated 28 March 2021 (“NCAC Rules“). Based on Article 55 of the NCAC Rules, a tribunal has broad power to grant the reliefs requested by the parties, including determining any claim or legal privilege or other privileges. Furthermore, Article 39(3) of the LCA provides that the tribunal has the power to allocate among the parties the costs of the arbitration, including the arbitrator(s) fees, incidental expenses, and reasonable counsel fees based on agreement by the parties or as the tribunal deems appropriate in the absence of such agreement.
There is no specific regulatory restriction on the tribunal’s powers in relation to the final relief. However, parties may impose limitations on the tribunal’s power in the arbitration agreement.
Under Article 25 of the LCA, unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order any party to take such interim measure (e.g. injunctions, preservation of property, and preservation of status quo) as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute. The arbitral tribunal may require any party to deposit a guarantee in connection with such measure. Article 43.1 of the NCAC Rules also allows for the arbitral tribunal to grant interim measures, by reasoned award or order, at any time prior to the date of the final award, at the request of a party.
If the arbitration is seated in a foreign jurisdiction, the tribunal’s powers in respect of the grant of interim relief will be based on the rules governing arbitral proceedings in such foreign jurisdiction.
Cambodian law does not expressly provide for the enforcement of interim relief/measures granted by the arbitral tribunal. Therefore, if the interim relief is granted by the arbitral tribunal in a form of an order, there is uncertainty pertaining to its enforcement.
However, the tribunal may also grant interim relief/measures in a form of a reasoned award (“Interim Award“) at any time prior to the date of the final award upon the request of a party under Article 43.1 of the NCAC Rules. As Article 45 of the LCA provides for the recognition and enforcement of domestic or foreign awards (where the arbitration is seated in a foreign jurisdiction) in a competent court, an Interim Award may be enforced accordingly.
Cambodian courts have territorial jurisdiction; therefore, the court has in general the power to grant any interim relief (including injunctions) for Cambodian-related matters, irrespective of whether the arbitration is seated in Cambodia.
Upon a request made by a party to a dispute, the court will decide whether to grant the interim relief if there is a valid arbitration agreement or if arbitral proceedings are ongoing. To be granted an injunction, a person must prove to the court with reasonable certainty the legal relationship between the parties and necessity of the injunction (e.g. to avoid the risk of an alteration to the status quo of the dispute’s subject matter that would result in the impossibility or extreme difficulty of resolving the dispute, or that significant damage or imminent risk would arise which would affect a party’s status).
In line with the Code of Civil Procedure, the LCA also provides that a party to a dispute may, prior to or during arbitral proceedings, request interim relief from the court if doing so is not incompatible with the arbitration agreement (Article 9 of the LCA). The requesting party must notify the arbitral tribunal as soon as possible (Article 43.8 of the NCAC Rules).
Yes. The concept of an emergency arbitrator is provided for in Chapter 3 of the NCAC Rules, which deals with issues of interim measures before the constitution of the tribunal. An emergency arbitrator may be appointed prior to the constitution of the arbitral tribunal when a party wishes to seek interim measures (Article 10 of the NCAC Rules).
The emergency arbitrator shall have the power to order or award any interim measure that he/she deems necessary (Article 17 of the NCAC Rules), and must do so within 15 calendar days from the date of his/her appointment (Article 18 of the NCAC Rules).
Yes. Under Article 24(1) of the LCA and Article 34.2 of the NCAC Rules, the arbitral tribunal has the power to rule on its own jurisdiction, including any objections with respect to the existence or validity or scope of the arbitration agreement.
The doctrine of kompetenz-kompetenz is applied by the tribunal if a party challenges the jurisdiction of the tribunal in the arbitral proceedings.
8. Appointment of Arbitrators, Challenge, and Liability
Parties are at liberty to agree on the constitution of the arbitral tribunal under Article 19(2) of the LCA and Article 24 of the NCAC Rules, as well as the number of arbitrators on the tribunal. The number of arbitrators shall be an odd number.
Under the LCA
If parties cannot reach an agreement, then the LCA provides for the following default procedure:
- Three arbitrators will be appointed (Article 18 of LCA).
- Each party shall appoint one arbitrator, and the two arbitrators thus appointed shall appoint the third arbitrator.
- If a party fails to appoint the arbitrator within 30 days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within 30 days of their appointment, the appointment shall be made, upon request of a party, by a competent court or the NCAC (Article 19(3)(a) of the LCA).
Under the NCAC Rules
If parties have adopted the NCAC Rules, then the NCAC Rules will take precedence over the LCA. If parties cannot reach an agreement, then the NCAC Rules provide for the following default procedure:
For a three-member tribunal:
- Each party shall appoint one arbitrator within 15 calendar days from the receipt of the notification of notice of response.
- Within 15 calendar days after the last of the two arbitrators have been appointed, the two arbitrators will jointly appoint a presiding arbitrator of the tribunal.
- If either party fails to appoint an arbitrator or the two arbitrators fail to jointly appoint a presiding arbitrator, the Appointment and Proceedings Committee will appoint such arbitrator and/or such presiding arbitrator.
For a one-member tribunal:
- The parties shall jointly appoint the sole arbitrator within 15 calendar days from the receipt of notice of response.
- If the parties fail to appoint the sole arbitrator, the Appointment and Proceedings Committee will appoint a sole arbitrator to constitute the tribunal.
Yes. Please see question 8.1 above.
Under Article 26.2(a)(ii) of the NCAC Rules, any person appointed as an arbitrator shall submit a signed statement that she/he (i) is and shall remain impartial and independent, and (ii) has made and shall make disclosure of any circumstances likely to give rise to justifiable doubts as to her/his independence or impartiality.
Moreover, Article 27.1 of the NCAC Rules provides further that the arbitrators shall not act as advocate for, or advisor to, any party from the time of appointment as arbitrator until the final award is issued, including the period allowed or set under the NCAC Rules for requesting or issuing any correction, amplification, interpretation or additional award.
As for the LCA, it does not impose any requirements or restrictions on a party’s or the parties’ choice of arbitrator. However, it provides in Article 20 that an arbitrator’s appointment may be challenged if there are concerns regarding the arbitrator’s impartiality and independence.
It is worth noting that the NCAC’s Code of Conduct for Arbitrator provides guiding principles on ethics for all arbitrators who have been registered as members of the NCAC to ensure the neutrality of all arbitrators, including party-appointed arbitrators.
Based on Article 4 of NCAC’s Code of Conduct, an arbitrator shall decline an appointment if he or she has any doubts as to his or her ability to be impartial or independent and/or any circumstances described in the Red List occurs (e.g. the arbitrator has a close relationship with any party or is a legitimate representative of an organisation/entity which is a party to the arbitration proceedings).
Yes. Parties may agree on the arbitrator’s qualifications in the arbitration agreement. Additionally, Articles 7.1(h) and 8.1(f) of the NCAC Rules allow the parties to propose and agree on the qualifications of the arbitrator(s).
Under Article 20 of the LCA and Article 28.1 of the NCAC Rules, an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his/her impartiality or independence, or if he/she does not possess the qualifications agreed upon by the parties (collectively “grounds for challenge“). A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only where the party has become aware of the grounds for challenge after the appointment has been made.
Procedure under LCA
Under Article 21 of the LCA, the parties are free to agree on a procedure for challenging an arbitrator. Failing such agreement, the default procedure is that the challenging party:
- shall send a written statement of the reasons for the challenge to the arbitral tribunal and the other party or parties; and
- must do so within 15 days after becoming aware of the constitution of the arbitral tribunal or the grounds of challenge.
Unless the challenged arbitrator withdraws from his/her office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.
If a challenge (whether under the agreed or default procedure) is unsuccessful, the challenging party may request, within 30 days after having received notice of the decision rejecting the challenge, a competent court or NCAC to decide on the challenge. Such decision will not be subject to appeal. While such a request is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings and make an award.
Procedure under NCAC Rules
Under the NCAC Rules, a party intending to challenge an arbitrator shall:
- submit a notice of challenge with reasons for the challenge to the arbitral tribunal, the other party or parties, and the General Secretariat of NCAC; and
- must do so within 15 calendar days:
a. from the receipt of the notification of constitution of the tribunal; or
b. after the date the party is aware of the grounds for challenge.
If the challenged arbitrator gives notice that he/she refuses to withdraw from the tribunal:
- One-member tribunal – The challenging party may appeal to NCAC through its General Secretariat within 30 calendar days from receiving such notice.
- Three-member tribunal – The tribunal will decide on the challenge within seven calendar days from receiving such notice. If the tribunal rejects the challenge, the challenging party may appeal to the NCAC through its General Secretariat within 30 calendar days from the receipt of the tribunal’s decision.
The Appointment and Proceedings Committee will decide on the challenge of the arbitrator within 15 calendar days after the appeal is received by the General Secretariat. The decision of the Appointment and Proceedings Committee does not need to be reasoned and will be final and not be subject to any appeal. While the decision is pending, the arbitral tribunal including the challenged arbitrator may continue the arbitral proceedings and make an award (Article 21(3) of the LCA).
Article 71 of the NCAC Rules provides that the emergency arbitrator and the members of the arbitral tribunal:
a. shall not be liable to any person for any act, omission or negligence;
b. shall not be under any obligation to make any statement; and
c. cannot be compelled to act as a witness in any legal proceedings
in connection with an arbitration conducted under the NCAC Rules or the exercise of any function as provided under the NCAC Rules.
9. Party Representation
No. Under Article 26 of the LCA and Article 3 of the NCAC Rules, each party shall be represented by any person of his choice in the arbitral proceedings.
Domestic laws do not restrict foreign representation in arbitral proceedings. There are currently no rules of etiquette imposed by domestic laws in relation to foreign representation. The IBA Guidelines on Party Representation in International Arbitration may be adopted if agreed upon by the parties.
The IBA Guidelines on Party Representation in International Arbitration are not by default applied in domestic practice, unless specifically adopted by agreement of parties.
Please contact the editorial team of Arbitration Asia at arbitrationasia@rajahtannasia.com.
