More than a year after it was established, the National Commercial Arbitration Centre (NCAC), Cambodia’s first third-party dispute resolution body, is finally ready to take on its first case.
During its first annual assembly in Phnom Penh on Friday, the NCAC confirmed that it had finalised its governing framework, code of ethics and budget, and that it is now open to provide out-of-court arbitration services to the country’s rapidly growing commercial industries.
“The NCAC is ready to tackle its first case. We hope to be able to solve the first case with confidence, transparency and efficiency,” chairman Ros Monin said, adding that while no private firms had yet approached the council for assistance, 10 private sector organisations had registered for NCAC membership.
The assembly comes four years after the government passed a sub-decree calling for the establishment of a national commercial arbitration body, and more than a year after the NCAC was established by the Ministry of Commerce in March 2013.
The NCAC will specialise in hearing commercial and business matters. It consists of 42 arbitrators, among them 28 lawyers with experience specific to a certain industry, accountants and academics.
In disputes, parties will each select an arbitrator with the skills best suited to their case.
For each case, parties will be required to pay an undetermined fee for each arbitrator’s time, for administration costs calculated on the size of the disputed claim and a $250 registration fee to the NCAC.
Cambodia currently has no court specialising in commercial disputes, forcing such cases to be fought out in the country’s conventional judiciary system under the civil code.
Monin said that the current system is unfit to resolve commercial disputes, is overly complicated, time consuming and costly for companies.
Vann Sou Ieng, president of the Cambodian Federation of Employers and Business Association, one of the NCAC’s 10 private sector members, said the existing judicial system’s poor handling of commercial disputes had amplified the need for an out-of-court option.
“It takes time, costs a lot of money and it’s not being handled fairly,” he said of Cambodia’s court system.
“Having the NCAC in Cambodia is a good, a very good move. But what is more important is the truth, confidence and independence that the body can [provide] to clients.”
But proving that the new arbitration service is a trustworthy option may be more difficult than simply announcing that the NCAC is open for business.
“There are still a lot of challenges ahead, including raising public awareness so that people know that the NCAC is even running,” Hor Soneath, head of office at the World Bank’s International Finance Corporation said.
Thomas Hundt, CEO of one of Cambodia’s largest telecommunications firms, Smart, which is currently engaged in an out-of-court dispute with rival telecom firm qb, said that the establishment of a trustworthy arbitration service was well overdue.
“As long as they [NCAC] are transparent and follow strict processes during their hearings, a national arbitrator is generally a positive step,” he said.
While Hundt declined to comment on the qb dispute, he agreed that the existing judicial system was ill-equipped in some cases to cater to the country’s fast-growing private sector.
“The commercial world here in Cambodia is developing faster than the judicial system is able to serve,” he said.
Mao Thora, secretary of state of the Ministry of Commerce, labelled the NCAC’s establishment as a step forward for Cambodia’s justice system.
“Big businesspeople do not want to go to court . . . Now they do not have to; we have our arbitrator,” he said.
The new dispute-settlement body must stay independent in its decision-making if it is to ensure confidence, Thora added.
“If they are not independent or are biased to one party in a dispute, they are throwing away their own rice pot. No one will choose them to be their arbitrator anymore.”