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> Myanmar Update: New Arbitration Bill Draft Announced

On 25 May 2014, the Myanmar Parliament released the much-anticipated draft of its new Arbitration Bill (the “Bill”), almost a year after the country’s accession to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “NYC”) on 15 July 2013.
The Bill, when it comes into force, represents an overhaul of Myanmar’s present arbitration regime and demonstrates the government’s commitment to conform to the international standards of arbitration legislation.
Key Points

  • The Bill is based largely on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration 1985 (the “Model Law”).

  • The Myanmar courts will be given the power to grant interim measures in support of the arbitration process.

  • Among other provisions that deal with how the Myanmar courts should approach insolvency-related claims, the Myanmar courts are given the discretion to refer such insolvency claims to arbitration on application by a party.

  • The Bill provides that the Myanmar courts have the power to extend a contractual time bar to commence arbitration for arbitrations seated in Myanmar. There is no similar provision in the Model Law or the International Arbitration Act of Singapore. This seems more significant particularly in light of the decision in Wholecrop Marketing Ltd v Wolds Produce Ltd [2013] EWHC 2079 (Ch), where the English High Court held that the contractual time bar in question operated as a time bar to the claim itself.

  • Arbitrations seated in Myanmar that do not fall within the definition of an “international commercial arbitration” must adopt Myanmar as the substantive law governing the arbitration.
  • Under the Bill, parties objecting to an order that the arbitral tribunal has jurisdiction can seek only to set aside that order under the strict requirements of Article 34 of the Model Law. This deviates from Article 16 of the Model Law, which allows parties to refer the issue to court for its decision.

  • The Bill provides that awards made in Myanmar will be enforced where the court has refused to set aside the award, or where the application to set aside the award has expired. The upshot of this is that any challenge to an arbitral award has to be made at the seat itself, rather than at the enforcement stage.

Preliminary Views

The Bill is subject to further amendments before it passes into law, but even then, there is still considerable work to be done to implement a framework that is capable of supporting the recognition and enforcement of foreign arbitral awards. For example, the Myanmar courts will still need to update and/or introduce relevant rules and procedures for parties seeking assistance in obtaining interim relief in support of arbitration, or for the recognition and enforcement of foreign arbitral awards. Nevertheless, the introduction of the Bill is largely perceived as a welcome and key advancement in the country’s investment regulatory framework, providing foreign investors with added comfort and security in protecting their investment and doing business in Myanmar.

Written by Raghunath Peter Doraisamy and Benjamin Kheng.

This article is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this article are those of the authors and do not necessarily reflect the views of the authors' law firm or its individual partners.

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