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ADB urges commercial court system that inspires investment

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The Cambodia Commercial Court Symposium in Phnom Penh on November 29. CCC

ADB urges commercial court system that inspires investment

A senior Asian Development Bank (ADB) officer has recommended Cambodia tap into other jurisdictions’ experiences, as it moves to create a commercial court system, to ensure a “reasonable” easily-accessible judicial system that encourages long-term high-calibre investments.

ADB country director for Cambodia Jyotsana Varma said this during her opening remarks at the Cambodia Commercial Court Symposium in Phnom Penh on November 29.

The Kingdom is currently working to set up separate specialised commercial courts, in efforts spearheaded by the Commercial Court Organising Committee, a body established by legislation signed by Minister of Justice Koeut Rith on January 21, 2021.

Varma said: “ADB is providing technical assistance to support the judiciary’s role in creating a healthy business climate.

“It is fairly well understood that businesses need a clear and predictable legal framework in which to operate. Businesses also need a dispute resolution system which is reliable, efficient, and transparent.

“The judiciary is key to ensuring uniformity and predictability in the interpretation and application of the country’s laws and in ensuring that disputes are handled fairly and efficiently.

“Without a reasonable judicial system that is accessible to all, it is difficult for a country to attract long-term high-quality investment. Courts and judges, therefore, are vital for a well-functioning economy.

“We understand the Ministry of Justice is working hard on procedures and plans to implement commercial courts procedures in the country.

“Cambodia can benefit from decades of experience elsewhere in establishing and running commercial courts. That is because commercial courts everywhere face similar questions and challenges,” she said.

She offered a few examples: “What is the scope of subject matter jurisdiction of a commercial court? Should parties have a choice to proceed in a commercial court or in another court? How can judges understand business issues underlying commercial disputes? What is the most efficient way to manage a commercial dispute and still be fair to all parties?

“The international judges, registrars and other experts who are here today have all grappled with these questions and will share ‘lessons learned’ from their experiences. I am confident that this will be of interest and relevance to all of us – judge, court supervision authorities and judicial trainers,” Varma added.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng told The Post on November 30 that the proposal leading to the current Commercial Court undertaking was initiated by CCC president Kith Meng, with the aim of building trust among investors.

“Once we have these courts designated to cover commercial disputes … in a fair, transparent and quick manner without any corruption, we’ll earn the trust of local and foreign investors and businesspeople, allowing us to bring in more investments,” he said, noting that businesses operating in Cambodia often turn to the Singaporean or French courts for commercial dispute resolution.

Justice ministry secretary of state Chin Malin told a press conference late in June that his ministry is preparing legislation for the establishment of separate courts for commercial and labour disputes, in the interest of creating a more effective judicial system.

He noted that the legal system at present is divided into civil and criminal courts, and that labour and commercial courts would provide the opportunity for more targeted judicial specialisation.

Currently, all cases involving commercial and labour disputes are referred to the civil court.

A team at the ministry is currently drafting a number of legal documents – encompassing, inter alia, procedural, legal and standard frameworks – to put Cambodia’s first commercial court into operation next year, Malin said, linking the court’s establishment to the judiciary’s institutional reform strategies.

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