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.

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.

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.

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).

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