1 National Commercial Arbitration Center Development of Commercial Arbitration in Cambodia Mr. BUN Youdy, Arbitrator Member of the NCAC Executive Board Member of EuroCham Board Intercontinental Hotel22 September 2015EuroCham Breakfast Talk

2 National Commercial Arbitration Center Presentation Outline 1. Why choose commercial arbitration in Cambodia? 2. An overview of recent development of commercial arbitration in Cambodia

Why choose commercial arbitration in Cambodia? 3

What investors/companies look for before investing in a country 1. Ease of establishment of a business 2. Market size and growth prospects 3. Labor cost and productivity 4. Infrastructure 5. Political stability 6. Corruption 7. Taxes 8. Ability to repatriate earnings/profit 9. Clear, enforceable legal framework and rule of law 4 Figure 1 - What are the time, cost and numbers of procedures to resolve a commercial dispute through the courts?, Enforcing Contracts Methodology, World Bank

Why choose commercial arbitration in Cambodia? Ranking of enforcement of contracts in Cambodia  Impact on decision making by large and small investors (foreign and local) 5 TOPICS DB 2015 RankDB 2014 RankChange in Rank Enforcing Contracts 178/189 No change Doing Business Report (2015, World Bank)

Why choose commercial arbitration in Cambodia? Current challenges if we don’t choose commercial arbitration in Cambodia  Difficulties with the courts  Limitation of technical or specialized knowledge of judiciary 6

Why choose commercial arbitration in Cambodia? How the NCAC provides a stronger alternative  Party autonomy  Costs: predictable and reasonable  Arbitration rules based on international standards  Proceedings may be conducted in a foreign language  Awards are scrutinized  New York Convention  Awards issued by NCAC are enforceable in all NY Convention signatory countries  Arbitrators  Qualified, trained by international experts in arbitration  Experts in Cambodian law  Native Khmer language speakers able to quickly understand evidence and documents which will be primarily in Khmer 7

An overview of recent development of commercial arbitration in Cambodia 8

9 Recent development of commercial arbitration in Cambodia History and Recent Development  May 2006: Arbitration Law  Aug. 2009: Sub-Decree No. 124 on Organization and Functioning of NCAC  Mar. 2010: Selection of arbitration candidates  Dec. 2010: Amendment to art. 52 of Sub-Decree No. 124  : Selection of arbitrators through examination  Jan. 2013: Official launch of NCAC  July 2014: Internal Rules and Arbitration Rules  April 2015: Code of Ethics

Recent development of commercial arbitration in Cambodia Status of NCAC  NCAC is an independent organization Roles and Functions of NCAC  Promote arbitration: promote the settlement of commercial disputes through arbitration in Cambodia  Rules: create the necessary infrastructure and rules for the administration of arbitration cases in Cambodia  Standards: ensure high quality standards of arbitration are maintained in Cambodia, including setting and ensuring the qualifications of arbitrators  Training: provide education and training to arbitrators and aspiring arbitrators in Cambodia 10

Fee schedule  Registration fee: flat rate of USD  Administration fee: graduated, based on the sum in dispute  Arbitrator appointment fee: flat fee of USD per arbitrator if the parties fail to appoint an arbitrator on their own  Tribunal fee: graduated, based on the sum in dispute  Any expenses incurred by the Tribunal and the NCAC: includes expenses such as costs of expert witnesses and cost of facilities Recent development of commercial arbitration in Cambodia 11

Fee schedule – Administration Fee (USD) Recent development of commercial arbitration in Cambodia 12 Sum in Dispute Arbitration Fee Up to 50,000 = 750 From 50,001 to 100,000 = % of excess over 50,000 From 100,001 to 200,000 = 1, % of excess over 100,000 From 200,001 to 500,000 = 1, % of excess over 200,000 From 500,001 to 1, = 3, % of excess over 500,000 From 1,000,001 to 2,000,000 = 5, % of excess over 1,000,000 From 2,000,001 to 5,000,000 = 7, % of excess over 2,000,000 From 5,000,001 to 10,000,000 = 11, % of excess over 5,000,000 From 10,000,001 to 50,000,000 = 14, % of excess over 10,000,000 Over 50,000,000 = 26,150

Fee schedule – Tribunal Fee (USD) Recent development of commercial arbitration in Cambodia 13 Sum in Dispute Tribunal Fee (per arbitrator) Up to 50,000 = 1,000 1,000 From 50,001 to 100,000 = 1,000 1, % of excess over 50,000 From 100,001 to 200,000 = 1,500 1, % of excess over 100, ,000 From 200,001 to 500,000 = 2,400 2, % of excess over 200, ,000 From 500,001 to 1,000,000 = 4,500 4, % of excess over 500, ,000 From 1,000,001 to 2,000,000 = 7,500 7, % of excess over 1,000,000 1,000,000 From 2,000,001 to 5,000,000 = 12, % of excess over 2,000,000 2,000,000 From 5,000,001 to 10,000,000 = 21, % of excess over 5,000,000 5,000,000 From 10,000,001 to 50,000,000 = 34, % of excess over 10,000,000 Over 50,000,000 = 46, % of excess over 50,000,000

Sample of Fees Dispute of 500,000 USD with one arbitrator appointed by parties Dispute of 1,00,000 USD with three arbitrators appointed by parties Recent development of commercial arbitration in Cambodia 14 Registration fee250 Administration fee (1,750 + (300,000 x 0.6%))3,550 Tribunal fee (2,400 + (300,000 x 0.7%))4,500 Expenses(as incurred) Total8,300 + expenses Registration fee250 Administration fee (3,550 + (500,000 x 0.4%))5,550 Tribunal fee (4,500 + (500,000 x 0.6%)) x 322,500 Expenses(as incurred) Total28,300 + expenses

Recent development of commercial arbitration in Cambodia Arbitration clause 15 Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity, performance or termination, shall be referred to and finally resolved by arbitration in the Kingdom of Cambodia in accordance with the Arbitration Rules of the National Commercial Arbitration Center (NCAC Rules) being in force at the time of commencement of arbitration and by reference in this clause the NCAC Rules are deemed to be incorporated as part of this contract. The Tribunal shall consist of ________________* arbitrator(s). *State an odd number. The language of the arbitration shall be __________________. □Applicable Law This contract is governed by the laws of ___________________*. * State the country or jurisdiction.

Contact details of NCAC 16 Address: Building , Street 136 Sangkat Phsar Kandal I, Khan Daun Penh, Phnom Penh, Kingdom of Cambodia Tel:+855 (0) Website:

Thank you National Commercial Arbitration Center 17