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On 5 January 2016, Myanmar enacted a new Arbitration Law.

The Arbitration Law provides a legal regime for both domestic and international arbitrations that closely follows the familiar UNCITRAL Model Law.  It also implements the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. New York Convention awards may now be enforced in Myanmar.

UNCITRAL Model Law

The Arbitration Law expressly provides that its objectives are to effectively resolve domestic and international commercial disputes in a fair and effective manner, recognise and enforce international arbitral awards and encourage dispute resolution by arbitration.

The Arbitration Law incorporates many of the provisions in the UNCITRAL Model Law. This means that international arbitrations seated in Myanmar will in effect be governed by the Model Law, subject to a few variations.

The most significant difference with the Model Law is the distinction between domestic and international arbitrations. Similar to the Model Law, an arbitration is defined as being an international arbitration if:

(a)        the place of business of at least one party is outside Myanmar;

(b)        the place of arbitration is different to the parties’ place of business;

(c)        the place with the closest connection to the commercial relationship or the dispute is different to the parties’ place of business;

(d)        the parties expressly agree that the subject matter of the arbitration agreement is related to more than one country.

The Arbitration Law provides that a domestic arbitration is an arbitration that is not an international arbitration.  In domestic arbitrations, the parties may request the Myanmar courts to determine any question of law arising out of the arbitral proceedings.

Domestic arbitrations are to be decided in accordance with Myanmar law. International arbitrations are to be decided in accordance with the law to which the parties have agreed. If the parties have not agreed on a law, the tribunal shall decide the appropriate law to apply.  The tribunal may also decide the dispute ex aequo et bono if so empowered by the parties.

As with the Model Law, the Arbitration Law seeks to balance the role of the Myanmar courts in the arbitration process.  It restricts intervention by the courts by expressly providing that the courts may only intervene in arbitration proceedings in relation to the matters set out in the Arbitration Law. At the same time, the Arbitration Law sets out the circumstances in which the courts may support and supervise the arbitral process by, for example, granting orders in relation to interim measures, the taking of evidence and staying court proceedings in favour of arbitration.

Whilst the court has the power to issue interim measures, it is only in certain circumstances.  The Arbitration Law appears to encourage parties to first seek interim measures from the tribunal.  Not only does the Arbitration Law empower tribunals to order interim measures, it also provides that the courts may enforce interim measures issued by the tribunal.  Provided that the Myanmar court has the power to issue such interim measures, the court will enforce the measure as an order of the court, irrespective of whether the tribunal is seated in or outside Myanmar.

New York Convention

Myanmar acceded to the New York Convention in July 2013. The Arbitration Law gives effect to the New York Convention.

The Arbitration Law provides for the enforcement of an award made in another New York Convention country in Myanmar unless certain stipulated groups are established.  The grounds for challenging enforcement set out in the Arbitration Law are similar to those found in the New York Convention.  They primarily relate to procedural issues and issues of arbitrability and public policy.

The Arbitration Law also provides for the enforcement of domestic awards.  A domestic award may be set aside on grounds similar to Article 34 of the Model Law or it may be appealed on a point of law.  As these provisions appear to relate to domestic arbitrations only, it is not clear whether or not they also apply to international arbitrations seated in Myanmar.  Accordingly, the procedure for enforcing or setting aside an international arbitration award made in Myanmar is uncertain.

Protection for foreign investors

The Arbitration Law is a major step forward bringing Myanmar into the fold of the modern international arbitration network.  The implementation of the New York Convention has been eagerly awaited. It now remains to be seen how the Myanmar courts will apply the new law in practice.

Further, there may still be a legal requirement that some contracts be governed by Myanmar law. Sales contracts, government contracts and contracts relating to land and natural resources within Myanmar are potential examples of such contracts.

Nonetheless, the enactment of the Arbitration Law will give foreign investors confidence that if they agree to refer disputes to international arbitration outside Myanmar, an award may be enforced by the Myanmar courts under the Arbitration Law.

In addition, foreign investors may be able to rely on the investment protections provided in a bilateral investment treaty or a free trade agreement, such as those provided in the Australian-ASEAN-New Zealand Free Trade Agreement.  Such investment protections, if available to the foreign investor, may be used to bring a claim in international arbitration in the event that a government or regulatory body interferes with the investment.

In order to take advantage of the protections that may be available to foreign investors, consider international arbitration when entering into contracts in Myanmar.  Also consider whether investment protection under an investment treaty or free trade agreement will be available in the unfortunate event a dispute arises.

Author

John Hancock is the Managing Director of the Yangon office of Baker & McKenzie. John has continuously lived in South-east Asia since the early 1970s, and has practiced law there for some 35 years, with a focus on cross-border trade and investment, and mergers and acquisitions. John has a long history with Baker & McKenzie, as a former Baker & McKenzie Partner, Chairman of the Bangkok Office, and Chairman of Baker & McKenzie in Asia Pacific and Member of the Firm’s Executive Committee. He was involved in the establishment of several Baker & McKenzie offices in the Asia Pacific region, and the establishment of the Baker & McKenzie Myanmar Centre in Bangkok in 2012, which evolved into the Yangon Office. John can be reached at [email protected] and +95 1 255 056.

Author

Ola is a partner at Baker & McKenzie in Yangon. He has extensive experience as a legal and tax advisor, practicing for 15 years with international transactions and investment projects. His work experience includes working in international law firms and global financial advisory firms, covering positions in Europe, the US and South-East Asia. During the last five years Ola has advised a number of clients on financial and legal issues related to investments in Myanmar, and the rest of South-East Asia. Ola can be reached at [email protected] and +95 1 255 056.

Author

Jo Delaney was a partner with the Dispute Resolution team at Baker McKenzie in Sydney.

Author

Leng Sun Chan is a Principal at Baker McKenzie Singapore and is Baker McKenzie’s Global Head of International Arbitration. He is qualified in Malaysia, Singapore and England. Leng Sun was appointed Senior Counsel in January 2011. Apart from being counsel, Leng Sun is a Chartered Arbitrator and is also on the panel of leading arbitral institutions. He is the Chairperson of the arbitration panel jointly appointed by the EU and Korea under the protocol on cultural cooperation of the Korea-EU FTA. Leng Sun is the Immediate Past President of the Singapore Institute of Arbitrators (SIArb). He is a member of the Committee on the Singapore International Commercial Court. Leng Sun is the Deputy Chairman of the Singapore International Arbitration Centre (SIAC). He is the Deputy Chairman of the SGX (Singapore Exchange) Appeals Committee. Leng Sun was a legal officer of the United Nations Compensation Commission in Geneva and a SIAC-CIAC Observer to the UNCITRAL Working Group on Arbitration. He has published widely in international journals and is the author of the book Singapore Law on Arbitral Awards and Co-Editor of Conflict of Laws in Arbitration. Leng Sun has most recently been recognized among the top lawyers worldwide by "Legal 500 Asia Pacific 2018" as a leading individual in International Arbitration, "Who's Who Legal - Litigation 2017" and, "Who's Who Legal - Arbitration 2016". He is described by Chambers Asia-Pacific 2017 as "one of the best arbitrators and practitioners in arbitration. Leng Sun Chan can be reached at [email protected] and + 65 6434 2703.

Author

Gary Seib is a partner in the Dispute Resolution team at Baker McKenzie Hong Kong. Gary previously served as the global chair of the Firm's Dispute Resolution practice (2009 - 2014) and before that as Asia Pacific chair of the practice (2006 - 2009). He is one of the first lawyers to be granted Solicitor Advocate status before the Hong Kong courts and is ranked as Eminent Practitioner and one of the leading lawyers in his field by top legal directories, including Chambers Asia, Chambers Global, Asia Pacific Legal 500 and IFLR 1000. Gary has written numerous articles for publications in Australia and Hong Kong on topics ranging from insolvency and corporate rescue, corporate compliance investigations and enforcement to fraud risk, insider trading and market misconduct. He has also written and spoken extensively on corporate compliance, risk management and cross-border dispute resolution. Gary can be reached at [email protected] and +85228462112.

Author

Philip Hanusch is a special counsel in Baker McKenzie’s Hong Kong office. He specializes in international commercial arbitration with a focus on shareholder, joint venture and M&A disputes. Philipp has represented parties in arbitrations under various arbitration rules, including the HKIAC Rules, ICC Rules, CIETAC Rules, ICDR Rules and UNCITRAL Arbitration Rules. Philipp Hanusch can be reached at [email protected] and +852 2846 1665.