Myanmar

Guide to Arbitration Rules and Procedures in Myanmar

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

Myanmar has a common law legal system. A legislature known as the Pyidaungsu Hluttaw is the primary rule-making body. Delegated legislation is common and is formulated by the executive wing of the Government through various government ministries.

Under the Union Judiciary Law of 2010 and the Constitution of the Republic of the Union of Myanmar of 2008, there are four levels of courts in Myanmar, out of which the following three levels are relevant to international arbitration:

  • Supreme Court of the Union;
  • High Courts of the States or Regions (High Courts); and
  • District Courts or courts of self-administered divisions or of self-administered zones.

The District Court or High Court of the relevant State or Region would have original civil jurisdiction to decide on disputes relating to arbitration, depending on the quantum of damages sought or value of the claim that is in dispute.

The Supreme Court of the Union (Supreme Court) is the highest court in Myanmar which exercises both appellate and revision powers.

Insofar as international arbitration is concerned, the Arbitration Rules provide that all applications for the recognition and enforcement of foreign arbitral awards shall be filed before the District Court of the State or the Region in which enforcement of the arbitral award is sought. The appropriate court to seek enforcement is generally determined by the location/place of business of the defendant and/or where the underlying contract was carried out.

There is no separate or specialised court that has jurisdiction over arbitration-related applications.

The Arbitration Law 2016 along with the Arbitration Rules (issued by the Supreme Court of the Union on 31 July 2018 under Section 57 of the Arbitration Law to supplement and clarify certain provisions of the Arbitration Law) are the main sources of law in Myanmar with respect to international arbitration.

The Arbitration Law 2016 is modelled after the UNCITRAL Model Law with modifications, some of which are highlighted below:

  1. The Arbitration Law 2016, unlike the UNCITRAL Model Law, provides for both international commercial arbitration as well as domestic arbitration.
  2. Notwithstanding provisions such as Section 7 of the Arbitration Law 2016 which restricts intervention by the Myanmar Courts, the Arbitration Law 2016 provides circumstances under which the Myanmar Courts can intervene to support and supervise the arbitration process, including granting interim orders, taking evidence, and staying court proceedings in favour of arbitral proceedings (similar to what is provided under the UNCITRAL Model Law).
  3. In order to supplement the UNCITRAL Model Law’s provisions on staying proceedings in court pending the decision in arbitral proceedings, the Arbitration Law 2016 also contains provisions which allow for an appeal against the decision of a court denying a stay of court proceedings.
  4. In addition to the recognition and enforcement provisions in Sections 40 and 41, the Arbitration Law 2016 also provides for the right of appeal against a domestic arbitral award on a question of law.

Under Myanmar Law, a distinction is drawn between international and domestic arbitration.

Domestic arbitration is defined as an arbitration which is not an international arbitration (Section 3(h), Arbitration Law 2016).

An arbitration is an international arbitration if:

  • At the time of execution of the arbitration agreement, a party’s place of business and trading activity is situated in a country other than Myanmar; or
  • The place stated in the arbitration agreement or the place to conduct the arbitration in accordance with the arbitration agreement is situated outside the country in which parties have their places of business; or
  • Among the commercially related business obligations, any place where a substantial part of the obligations to be performed or the place with closest connection to the subject matter of the dispute is situated outside the country in which parties have their place of business; or
  • The parties to the arbitration agreement have expressly agreed that the subject matter relates to more than one country (Section 3(i), Arbitration Law 2016).

The local courts can intervene to assist arbitral proceedings in various ways. The courts can assist in the arbitral process by granting a stay of court proceedings and referring a dispute to arbitration where court proceedings have been commenced and the dispute falls within the scope of the arbitration agreement between the parties (Section 10, Arbitration Law 2016).

The Arbitration Law 2016 also allows a party to seek the court’s assistance to:

  • Obtain evidence;
  • Preserve evidence;
  • Issue an order concerning any property connected to any dispute in arbitration or any dispute arising from arbitration;
  • Inspect, make photographic records of, preserve, or take interim custody of any property under dispute;
  • Take samples from, or make any observation or conduct any examination on, any property under dispute;
  • Permit entry into any premises owned by, or under the control of, any party to the arbitration;
  • Sell any significant property under arbitration; and
  • Issue an interim injunction or appoint a receiver.

The local court is not to intervene in matters governed by the Arbitration Law except where so provided for in the Arbitration Law (Section 7, Arbitration Law 2016). The local courts adopt an enabling rather than interventionist position in respect of arbitration. Court and arbitral proceedings can be run concurrently –while an application to the court is pending, an arbitral tribunal may continue with arbitral proceedings and may also issue an award.

2. Arbitral Institutions

The Union of Myanmar Federation of Chambers of Commerce and Industry (“UMFCCI“) is the body tasked with establishing arbitral institutions in Myanmar. On 24 August 2018, the UMFCCI issued the Regulations and Arbitration Procedures of the proposed Myanmar Arbitration Centre. The regulations and procedures apply to all arbitral proceedings conducted in Myanmar. The regulations and procedures contain provisions regarding the appointment of the arbitral tribunal, the conduct of the arbitral proceedings, making of an arbitral award, and the costs of the arbitral proceedings.

In August 2019, UMFCCI established the Myanmar Arbitration Centre and appointed its Chairman. The first task of the Myanmar Arbitration Centre was to train a panel of 42 persons qualified to act as arbitrators for arbitration disputes in Myanmar. However, to date, there has been no further official update on whether and to what extent this panel of arbitrators have been appointed.

3. Confidentiality

The Arbitration Law 2016 does not contain an express provision regarding the confidentiality of arbitrations. Any obligation regarding confidentiality would be contained in a contract between parties or in the applicable arbitration rules.

Rule 8.7 of the Regulations and Arbitration Procedures of the Myanmar Arbitration Centre issued by UMFCCI provides that unless there is any agreement between the Parties, all meetings and hearings shall be private and the proceedings should not be disclosed to the public.  

4. The Law of the Arbitration and Conflicts of Law

The Arbitration Law 2016 recognises the concept of seat of arbitration. The seat of arbitration is referred to as the place of arbitration under the Arbitration Law 2016. The law of the seat of arbitration would determine the law applicable to the arbitral proceedings.

Regarding the substantive law applicable to the arbitration, Section 32 of the Arbitration Law 2016 states that in all domestic arbitrations where the place of arbitration is Myanmar, the arbitral tribunal shall decide the dispute in accordance with the substantive law in force in Myanmar.

Section 32(b) of the Arbitration Law 2016 further states that in all international commercial arbitrations where the place of arbitration is Myanmar, the arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties. Any designation of the law or legal system of a chosen State would be construed, unless otherwise agreed by the parties, as directly referring to the substantive law of that State and not to its conflict of laws rules.

The arbitral tribunal in Myanmar would be able to recognise that a foreign law can be agreed by the parties to be the substantive law governing the parties’ obligations with respect to the subject matter of the dispute (Section 32, Arbitration Law 2016).

There is no case law which informs the answer to the question. However, Section 32(a)(ii) of the Arbitration Law 2016 provides that in an international arbitration where the place of arbitration is Myanmar, parties are free to choose the substantive law applicable to the dispute. If parties have failed to designate the substantive law applicable to the dispute, the arbitral tribunal may apply the substantive law of the country which it considers applicable to the dispute.

 There is to date no jurisprudence in Myanmar on this matter.

Myanmar law has yet to specifically recognise a conceptual distinction between the law of the arbitration agreement, and the law of the contract in which the arbitration agreement is contained.

There is to date no jurisprudence in Myanmar on this matter.

5. Arbitration Agreements

The only formal requirement is that the arbitration agreement must be in writing. Section 3(b) of the Arbitration Law 2016 defines an arbitration agreement as an agreement in writing by the parties to submit to arbitration all or certain disputes which arise or which may arise between them in respect of a legal relationship.

Electronic arbitration agreements are recognised if the information contained therein is accessible so as to be useable for subsequent reference (Section 9(a), Arbitration Law 2016).

Although there is no express provision dealing with the incorporation of an arbitration agreement by reference, Section 9(b) of the Arbitration Law 2016 provides that “an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement”.

The Arbitration Law 2016 itself does not contain any provisions that prohibit any type of disputes from being resolved through arbitration. Section 4 of the Arbitration Law 2016 however states that the Law has been enacted with an aim to resolve domestic and international commercial disputes. From our understanding, the Arbitration Law 2016 is applicable to civil commercial disputes between private parties or between a private party and the government – accordingly, civil claims in tort arising out of or connected with the parties’ commercial relationship would usually be considered to fall within the ambit of a typical arbitration agreement, and would be arbitrable. Statutory claims may raise more difficult questions, and much may depend on the specific nature of the claim. Criminal disputes, labour law disputes and land disputes are typically not considered as arbitrable in Myanmar.

Myanmar Law recognises the separability of arbitration agreements. An arbitration clause that forms part of a contract is treated as an agreement independent of the other terms of the contract. Therefore, a decision by the arbitral tribunal that a contract is null and void does not in and of itself mean that the arbitration clause contained therein is invalid (Section 18, Arbitration Law 2016).

6. Proceedings in Breach of the Arbitration Agreement

No, an arbitration agreement governed by Myanmar Law does not prevent a party from initiating an action in the Myanmar courts. Section 7 of the Myanmar Arbitration Law (“MAL“) provides that domestic courts cannot intervene in matters governed by the MAL except as provided for under the MAL. The language of section 10(a) of the MAL makes it clear that parties can initiate a suit despite the existence of an arbitration agreement.

Section 10(a) of the MAL provides that the court is required to refer a dispute covered by an arbitration agreement to arbitration if a party requests the court to do so before submitting its written statement on the substance of the dispute. However, the court need not do so if it finds that the arbitration agreement is null and void, inoperative, or incapable of being performed.

In practice, the Myanmar courts have in certain cases proceeded to entertain disputes notwithstanding the existence of a valid and operative arbitration agreement.

Where proceedings have been initiated in Myanmar courts despite the dispute falling within the scope of an arbitration agreement, the opposing party would have to make an application under section 10(a) of the MAL to stay proceedings and refer the dispute to arbitration.

This application must be made before the opposing party submits its written statement on the substance of the dispute. The court is required to refer a dispute which is covered by an arbitration agreement to arbitration upon receiving such a request from a party, unless it finds that the arbitration agreement is null and void or inoperative or incapable of being performed. However, as stated above, in practice, Myanmar courts have in certain cases proceeded to entertain disputes that are covered by an arbitration agreement notwithstanding the existence of a valid and operative arbitration agreement.  

In the event the court refuses to refer the dispute to arbitration, an appeal may be filed against such a decision before a higher court under sections 10(f) and 43(c)(i) of the MAL. Parties may initiate or continue with arbitral proceedings while the appeal is pending. For completeness, if the court refers the dispute to arbitration, the suit before the Myanmar courts is stayed, and no appeal is allowed against the court’s decision.

There is no difference if the arbitration agreement provides for the arbitration to be seated in a foreign jurisdiction. Section 2(b) of the MAL provides that the provision related to stay of suits under section 10 would be applicable even if the arbitration is seated in a foreign jurisdiction.

No, there is no equivalent to anti-suit injunctions in Myanmar.

There is no difference for foreign-seated arbitrations.

Apart from an application for a stay of suit under section 10(a) of the MAL, there are no other reliefs available to a party when responding to proceedings initiated in breach of an arbitration agreement.

7. Jurisdiction and Powers of the Arbitral Tribunal

There is an implicit reference to non-arbitrability under the MAL. Sections 41(a)(6) and 46(c)(1) provide for an arbitral award to be set aside on the ground that “the subject matter of the dispute is not capable of settlement by arbitration under the existing law”. However, like the UNCITRAL Model Law, the MAL does not define arbitrability. Nor does it specify any dispute, types of disputes, or subject matter of disputes that cannot be referred to arbitration.

In practice, labour disputes, land disputes, and criminal matters cannot be referred to arbitration.

There are no express provisions in the MAL that limits the types of final relief that may be granted by the tribunal. Notwithstanding the above, sections 41(a)(7) and 46(c)(2) of the MAL allow Myanmar courts to refuse enforcement of domestic and foreign arbitral awards respectively, if it is in conflict with the national interest (public policy) of Myanmar. Although the terms ‘national interest’ and ‘public policy’ have not been defined, it is likely that the domestic courts will not usually enforce an award where the final relief is one that is unlikely to be granted by the domestic courts in Myanmar.   

Unless otherwise agreed by the parties, section 19 of the MAL states that the arbitral tribunal has the power to grant the following interim reliefs:

  1. security for costs;
  2. disclosure of documents or interrogatories;
  3. producing evidence by affidavit;
  4. the preservation, interim custody or sale of any property which is part of the subject-matter of the dispute;
  5. taking samples from, or any observation to be made or experiment to be conducted upon, any property which is or forms part of the subject-matter of the dispute;
  6. preservation and interim custody of any evidence for the purposes of the proceedings;
  7. securing the amount in dispute; and
  8. issuing an interim injunction or any other interim measures.

The above is subject to section 19(d) of the MAL, which disallows the arbitral tribunal from passing an order directing a party to provide security for costs solely on the grounds that:

  1. the party is an individual ordinarily resident outside the Republic of the Union of Myanmar: or
  2. the party is a corporation or an association incorporated or formed under the law of another country.

Sections 19(e) and 31 of the MAL provide for the enforcement of interim awards/orders passed by the arbitral tribunal. Section 31(a) of the MAL expressly states that all interim orders, irrespective of whether they are passed in or outside Myanmar, can be enforced by the Myanmar courts as though they were its own order or decision.

The procedure for enforcement of an interim domestic award is set out in Rules 27 to 30 of the Arbitration Rules. First, an application must be made to the relevant district court. Thereafter, the enforcement proceedings proceed as if it were a civil suit filed under the Myanmar Civil Procedure Code. The district court then decides whether to enforce the interim award.

Foreign-seated arbitrations

There are limitations on the enforcement of interim awards/orders for arbitrations seated outside of Myanmar. Section 31(b) of the MAL states that the Myanmar courts may refuse the enforcement of such an interim award/order if the party enforcing it is unable to present strong evidence that the interim order is a type of order that would be passed by the courts in Myanmar. Further, there is also no right of appeal against the decision of the Myanmar courts to allow or refuse enforcement of the interim award/orders of an arbitral tribunal.

In practice, the procedure for enforcement of interim awards/orders granted by a foreign-seated tribunal is similar to that of domestic arbitration.

Under section 11 of the MAL, unless otherwise agreed by the parties, the Myanmar courts have the power to grant the following forms of interim relief at a party’s request:

  1. taking evidence;
  2. preservation of any evidence;
  3. issuance of an order in respect of the property related to any dispute in arbitration, or any property which is related to the subject-matter of the dispute;
  4. inspection, photographing, preservation, custody and seizure of any property that is related to the dispute;
  5. taking samples from, making observations or conducting experiment upon any property which is part of the subject-matter of the dispute;
  6. authorising any person to enter any premises owned by or under the control of a party to the arbitration for the abovementioned purposes;
  7. sale of any property which is the subject-matter of the dispute; and
  8. granting interim injunctions or orders related to the appointment of a receiver.

If an interim order is urgently required for the preservation of evidence or related assets/properties, section 11(b) of the MAL states that, upon a party’s request:

  1. The court may grant the interim order without obtaining the tribunal’s permission or the other party’s written agreement.
  2. Where the court finds that the interim order is not urgently required, it may still grant the order. However, the court must first give notice to the tribunal and the other party, and obtain written consent from the tribunal and/or the other party.

There is no difference if the arbitration is seated in a foreign jurisdiction.

No. There is no concept of an emergency arbitrator under the MAL, the Arbitration Rules or the Arbitration Procedures of the Myanmar Arbitration Centre issued by the Union of Myanmar Federation of Chambers of Commerce and Industry (“UMFCCI Rules“).

Yes. Section 18(a) of the MAL provides that unless otherwise agreed by the parties, the arbitral tribunal has the power to rule on its own jurisdiction, including any objections as regards the existence or validity of the arbitration agreement.

Procedurally, under sections 18(b) and 18(d) of the MAL:

  1. Objections to the tribunal’s jurisdiction cannot be raised after the submission of the statement of defence in the arbitration.
  2. The arbitral tribunal can rule on any jurisdictional objection either as a preliminary issue or as part of the final arbitral award.
  3. The tribunal’s decision can be challenged by filing an appeal in the Myanmar courts under sections 43 and 47 within 30 days of receiving the decision. Arbitral proceedings can continue while the appeal is pending.

8. Appointment of Arbitrators, Challenge, and Liability

Section 13(b) of the MAL allows parties to agree on the procedure for the appointment of arbitrator(s). Where parties have agreed to a procedure for appointment of arbitrator(s), the MAL mandates that the appointment has to be made in accordance with such procedures.

If there is no agreed procedure, or if any party (including arbitrators or third parties such as arbitral institutions) fails to appoint an arbitrator, either party may request the Chief Justice or any person/institution selected by him to take the necessary measures for the appointment of the arbitrator(s).

For the purposes of section 13 of the MAL, the term Chief Justice refers to:

  1. For domestic arbitrations – the Chief Justice of the High Court of the Region or State with jurisdiction over the arbitration.
  2. For international arbitrations – the Chief Justice of the Union.

If the parties fail to agree on the manner of appointment of arbitrator(s), then section 13(d) of the MAL provides as follows:

  1. Arbitration with three arbitrators
    • Each party shall appoint one arbitrator within 30 days from the receipt of a request to do so from the other party.
    • The two arbitrators shall appoint the third arbitrator within 30 days from their appointment, who shall act as the presiding arbitrator.
    • If any party (including the two arbitrators) fails to appoint an arbitrator within the required timeframe, the appointment of the arbitrator shall be made, upon the request of a party, by the Chief Justice or by any person or institution designated by him.

  1. Arbitration with a sole arbitrator
    • The Chief Justice or any person or institution designated by him shall, upon the request of any party, appoint the sole arbitrator if the parties fail to appoint the sole arbitrator within 30 days from the date of receipt of a request to do so from the other party.

For details on the reference to “Chief Justice”, please see question 8.1 above.

Section 13(a) of the MAL, which reflects Article 11(a) of the UNCITRAL Model Law, provides that an individual of any nationality can act as an arbitrator unless otherwise agreed between the parties. Section 13(e) further states that in appointing an arbitrator, the Chief Justice shall have due regard to the required qualifications as agreed by the parties, as well as the prospective arbitrator’s independence and impartiality.

The MAL does not mention any specific requirements on what constitutes such an independent and impartial arbitrator. Instead, section 14 requires a prospective arbitrator to disclose in writing any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. This obligation to disclose without delay is ongoing from the time of his possible appointment and throughout the arbitral proceedings.

However, Rule 13 of the Arbitration Rules, which supplements the MAL, sets out the attributes that an arbitrator must possess. This includes:

  1. having a high sense of probity;
  2. keeping the information shared by the two disputing parties confidential;
  3. recognised as an expert in relation to the specific area of dispute;
  4. free and unbiased in making a decision;
  5. must be recognised as an expert in one of the following for settling commerce-related disputes:
    • Law-related area;
    • Commercial-related area;
    • Industrial-related area; or
    • Finance-related area.

For details on the reference to “Chief Justice”, please see question 8.1 above.

Yes. Section 13(c) of the MAL states that where an appointment procedure has been agreed upon by the parties, the appointment has to be made in accordance with such procedure. Further, section 13(e) states that if the Chief Justice is appointing an arbitrator, he must have due regard to the qualifications required of the arbitrator as agreed by the parties.

For details on the reference to “Chief Justice”, please see question 8.1 above.

Yes. Section 13(c) of the MAL states that where an appointment procedure has been agreed upon by the parties, the appointment has to be made in accordance with such procedure. Further, section 13(e) states that if the Chief Justice is appointing an arbitrator, he must have due regard to the qualifications required of the arbitrator as agreed by the parties.

For details on the reference to “Chief Justice”, please see question 8.1 above.

Section 14(c) of the MAL sets out the grounds of challenge to an arbitrator’s appointment, which includes:

  1. existence of any circumstances that likely to give rise to justifiable doubts as to his independence or impartiality; and/or
  2. where he does not possess the qualifications agreed by the parties.

Procedure-wise, section 15 of the MAL provides that the parties can agree on the procedure to challenge the appointment of an arbitrator. Failing such an agreement, the default procedure is as follows:

  1. The challenging party must send a written statement to the arbitral tribunal setting out the reasons for the challenge within 15 days after becoming aware of the constitution of the arbitral tribunal or one of the abovementioned grounds.
  2. Unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge, the arbitral tribunal will decide on the challenge.
  3. If the tribunal rejects the challenge, the aggrieved party can submit an appeal to the court within 30 days after receiving the tribunal’s decision. While the appeal is pending, the tribunal can continue with the proceedings.
  4. Where the court allows the challenge, the court can decide whether the challenged arbitrator is entitled to any fees.

Section 20 of the MAL provides that an arbitrator shall not be liable for anything done or omitted during the course of arbitration as an arbitrator if the act or omission is done with due diligence.

9. Party Representation

No. The MAL and the Arbitration Rules do not have any specific provisions regarding party representation in arbitral proceedings.

Clause 7 of the UMFCCI Rules merely states that a party may conduct the whole case or part of the case by himself or by a person who represents him (representative). If there is a change of representative, then the party should notify the arbitral tribunal, the Myanmar Arbitration Centre, and the other party promptly. The tribunal can direct the party to produce proof that such a representative has in fact been authorised to represent the party before the tribunal.

There are no express prohibitions against foreign representation for arbitral proceedings. There are also no specific rules of etiquette or conduct that would apply to parties’ representatives under Myanmar arbitration law, rules, and procedures.

Typically, the IBA Guidelines on Party Representation are not applied in domestic arbitrations.

Please contact the editorial team of Arbitration Asia at arbitrationasia@rajahtannasia.com.

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Please contact the editorial team at arbitrationasia@rajahtannasia.com.

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