Established by the 2006 Law on Commercial Arbitration, the National Commercial Arbitration Centre of Cambodia (NCAC) is an independent not-for-profit institution that aims to offer impartial and effective alternative dispute resolution. There are currently more than 60 arbitrators on the NCAC panel.
With over 10 years experience and with legal training in France and the US, President of NCAC Bun Youdy is a leading figure in the realm of arbitration in Cambodia and the Southeast Asian region. Over three years into his role at the helm, Youdy expresses optimism that the centre is going from strength to strength as a local and regional powerhouse.
Youdy sat down with The Post to reflect on his tenure as NCAC President and the centre’s achievements, as well as discuss why arbitration might be an attractive legal avenue for some.
Why is arbitration attractive for businesspeople and investors?
Arbitration is a form of alternative dispute resolution (ADR) that provides a number of advantages for resolving commercial disputes. ADR offers its users autonomy and great flexibility, including in the ability to determine the manner in which the proceeding is to be conducted and the appointment of the arbitrator is to be made.
All arbitration proceedings are confidential, and this is an important factor for business parties involved in the dispute. Thanks to the finality of the award, the arbitration proceeding is generally seen as speedy and cost-efficient. Through the New York Convention, awards issued by NCAC are enforceable in more than 160 jurisdictions, rendering it the most preferred choice for resolving cross-border transaction disputes. It is generally impracticable to seek enforcement of a national court judgment beyond national borders due to the absence of mutual recognition arrangements between states. Since arbitration is not part of the national judicial system, it is usually seen as a neutral and independent forum for cross-border dispute.
What motivated you to assume the leadership of NCAC three years ago?
It was a combination of factors. I am a strong believer in an independent, fair and efficient ADR. There is a close correlation between the availability of an efficient ADR in a country and its economic development. Investors seek to minimise risk, and one of the best ways to achieve this is through an efficient, transparent mechanism for resolving disputes. If it takes many decades to reform the judicial system, it may take only a fraction of such time to achieve an acceptable commercial dispute resolution through arbitration.
I have actually been involved in the establishment of the arbitration profession in Cambodia since day one. I was among the initial batch of trainees who received the first training on commercial arbitration in the country. I then joined the NCAC’s founding board and was also part of the team who conducted research on international best practice and drafted key instruments institutionalising the profession such as Arbitration Rules, Internal Rules and the Code of Conduct for Arbitrators.
It took 7 years after the promulgation of the 2006 Law on Commercial Arbitration before the NCAC was officially launched in 2013. Everyone has been working hard since then to promote it. As time is of the essence, I feel there is an urgent need to fast-track the development of the NCAC for it to be on par with other international arbitration institutions.
My involvement in the NCAC is not the only example of my pro bono work. I have been involved in different capacities in works related to public health, education and advocacy for a better business environment. I consider it both an honour and privilege to serve the arbitration community. It is extremely rewarding to give back to the community to which I belong.
What challenges have you faced during your tenure?
The public frequently adopts a ‘wait-and-see’ approach to new initiatives. The single greatest challenge has been educating the community about the benefits of arbitration and the role of NCAC. The enforceability of awards administered by the NCAC was another issue that generated much debate.
As an independent institution in terms of both management and finances, we need to constantly work on self-sufficiency. The need for continuous capacity-building for our members and the wider community requires enormous effort from the NCAC. The Covid-19 pandemic in the last two years has had considerable challenges to the way we operate, and all those challenges have pushed us to work harder and to be creative in everything we do. Users’ high expectations of service delivery also influence the way we make decisions on our investments in both soft and physical infrastructures.
I am fortunately surrounded by highly talented and committed colleagues at the General Secretariat, together with strong support from my fellow members of Executive Board and numerous supportive individuals. While our work is not finished, the efforts of the NCAC team over the past three years have secured our position, establishing a sound footing for the years to come.
There have been comments that the NCAC is still a young institution and not yet capable of handling complex cases. How do you respond to these?
As of today, the NCAC has received 29 cases involving 70 parties from 8 different jurisdictions with a total sum in dispute of more than USD 86 million. The subject of dispute is quite diverse, spanning from real estate and construction, to financial and international trade. Almost 40% of all our proceedings have been conducted in English. The NCAC has completed numerous online hearings and procedural meetings with parties and arbitrators participating in different time zones.
Following the adoption of the 2021 Arbitration Rules, an interim award was issued by an emergency arbitrator within 15 calendar days from the appointment of the arbitrator. NCAC has recently accepted, for the first time since the entry into force of the 2021 Arbitration Rule, an application to proceed with an expedited procedure, a feature that allows the parties to obtain an award no later than 270 days from the appointment of an arbitrator.
Cases handled by the NCAC are often rather complex and there have been instances of cases with multiples parties and third-party joinders. The NCAC has strengthened the General Secretariat team in light of the increased caseload. More than 60 arbitrators of 6 different nationalities with diverse backgrounds are now on our panel.
Enforceability of NCAC awards is often cited as a concern. What are your thoughts on judicial attitudes concerning the recognition and enforcement of NCAC awards?
The enforceability of awards is a legitimate concern. So far, not one NCAC award has been set aside or refused recognition and enforcement by a competent court. More importantly, one award has already been recognised for enforcement by the High Court of Singapore through the application of the New York Convention.
As is the case in other jurisdictions, the support of the government and the judiciary plays a key role in the development of arbitration. One of the functions of the NCAC senior management team is to continue the dialogue with stakeholders and ensure they appreciate the benefits that arbitration brings to the business community and ongoing development of Cambodia.
What would you say have been the NCAC’s major achievements over the last 3 years?
The NCAC has travelled a long way over the past three years. I mentioned earlier that our caseload has grown significantly. Such an increase indicates the degree of trust placed in the NCAC by both stakeholders and the wider public.
Improvements in service provision to members and the community are another important step. The new head office, equipped with advanced technology, training and other facilities creates a modern, efficient working environment for parties, their representatives, arbitrators and staff. We have also modernised our rules in order to harmonise them with international best practice, to enhance users’ experience and to address the use of modern technology.
With regards to capacity building and raising awareness, we have delivered arbitration training and knowledge sharing events that have been attended by more than 2,000 people. Considering the size of our legal community, this number is phenomenal. Our inaugural moot competition has created a pipeline of future arbitrators and arbitration practitioners. The NCAC is embarking on the process of institutionalising the commercial mediation service and putting itself forward as Cambodia’s one-stop ADR service provider.
I believe our single greatest achievement has been the establishment of a robust, independent General Secretariat team. I am optimistic that this legacy will continue to make NCAC even more successful in future.
On a more personal note, I am proud of how much our arbitration community has grown in overall numbers, but particularly in terms of diversity. Arbitration is by definition international, and diversity across all levels of the profession is essential.
Please share some details of the commercial mediation initiative.
Community mediation is frequently used in our society and culture. Structured, commercial mediation, on the other hand, is a new concept. It is a form of ADR where an independent third party assists parties to resolve their dispute. Unlike an arbitrator, a mediator does not make an award. Their role is to facilitate a settlement through mutual consent, generally with a high degree of compliance. The commercial mediation supplements, and is sometimes used by the parties in conjunction with arbitration.
I am very pleased to add that 16 Cambodians have successfully passed an internationally recognised accreditation to become CEDR Accredited Mediators following an intensive training jointly organised by the NCAC and the IFC, a member of the World Bank Group.
Why arbitrate at NCAC rather than abroad?
I believe the NCAC has a number of competitive advantages that will make it an attractive option. They include when the governing law is Cambodian and the parties prefer that the dispute be heard by an arbitrator who is qualified in Cambodian law, or when the parties want the proceedings conducted in Khmer or where documents are only available in Khmer and it is impractical to translate them.
The NCAC offers a competitive fee structure, particularly when compared with foreign institutions. The centre also maintains a highly diverse panel of arbitrators.
What are your thoughts on the future of arbitration in Cambodia?
I am optimistic about the future of arbitration in Cambodia. More than that, I believe the NCAC provides an example of what the future holds for Cambodia, being a world-class organisation staffed by highly-qualified professionals, dedicated to serving members, while acting as responsible actor in the field of ADR. I sincerely believe that our arbitration community and all stakeholders will continue to be united behind this good cause.