You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 30, 2019

Why Myanmar Should Sign the New Singapore Mediation Convention

Subscribe to Updates
The Myanmar Times

One of the problems international businesses face in doing business in Myanmar is dispute resolution. The Myanmar court system is opaque and extremely slow, and local litigators charge surprisingly high fees. Arbitration is an obvious solution to this problem, and following the Myanmar Arbitration Law (2016) (AL) almost all commercial contracts of substantial value now contain arbitration clauses, usually for arbitration abroad-most commonly at the Singapore International Arbitration Centre (SIAC). This is because the AL allows for the enforcement of foreign arbitral awards where the award was made in a state that is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958), in all but a limited range of circumstances. The AL also paves the way for domestic arbitration, although I would imagine it will be several years before the arbitration centre recently established by the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) finds its feet.

However arbitration, particularly foreign arbitration, can remain an extremely expensive method of dispute resolution. Now, as a result of the Convention, mediation is likely to become a more popular alternative dispute resolution method in many countries.

Mediation is much cheaper and faster than litigation or arbitration, and therefore is worth carefully considering as an option, particularly in relation to smaller disputes. Legal advice is required, as it will not always be appropriate. It works in this way. Following the process of mediation facilitated by a mediator, the parties come to an agreement to settle their dispute. The problem in the past has been that there has been no simple way to enforce such a settlement agreement at the end of the mediation process. The Convention changes this.

Note that under the Convention the settlement agreement must be international, in the sense that at least two parties to the settlement agreement have their places of business in different States, or the State in which the parties to the settlement agreement have their places of business is different from either (i) the State where a substantial part of the obligations under the settlement agreement is performed or (ii) the State with which the subject matter of the settlement agreement is most closely connected.

Forty-six countries have already signed the new Singapore Mediation Convention, including Singapore itself. The Convention provides that a party to the Convention shall enforce a settlement agreement in accordance with its rules of procedure and in accordance with the Convention.

As with foreign arbitral awards, there are limited circumstances in which a settlement agreement may not be enforced. For example, the settlement agreement is not final according to its terms, or there was a serious breach by the mediator of applicable standards without which that party would not have entered into the settlement agreement, or granting relief would be against public policy.

Myanmar has made great progress in terms of arbitration. It should not be left behind with the potential of mediation as another form of alternative dispute resolution.

 

This article was originally published in the Myanmar Times and is reproduced here with permission and thanks. The original can be viewed on the Myanmar Times website. 

Related Professionals

Practices

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

September 15, 2022
In the course of our work, we often hear about consumers in Thailand lodging complaints with the Office of the Consumer Protection Board (OCPB) about problems with a purchased product or service. The OCPB is a government agency attached to the Office of the Prime Minister. Its main duties are to protect consumers in Thailand with respect to product advertising, product labeling, and contracts, and to handle consumer complaints. However, there are exceptions to the types of consumer complaints that the OCPB can handle. This is because some consumer complaints must by law be handled by certain specialized agencies. Examples of these exceptions include consumer complaints relating to: health products (food, drugs, cosmetics, medical devices, household dangerous substances, and narcotics); medical services; insurance; pricing of consumer products; condominium juristic person; public land; rail, water, and air transportation; tourism; education; banking and finance; telecommunications; and electricity and water consumption. Procedure When a consumer complaint that the office can accept comes to the OCPB, the officers first consider whether the business operator has violated any laws, in which case the relevant authorities, such as the police, should handle the matter. When the officers consider it appropriate, they may ask the parties to mediate the dispute. Complaints in Bangkok are mediated by officers at the Bangkok OCPB. For complaints lodged in other provinces, the governors of the provinces may assign officers or agencies under their supervision to mediate. The OCPB can mediate twice within 90 days. If the parties still want to continue with the mediation, a subcommittee of the Consumer Protection Board (CPB)—the body that directs the OCPB—will then conduct two more mediation sessions within 90 days. If a resolution is still not reached, the subcommittee can conduct one additional mediation session before declaring the mediation failed and ending the complaint
Read More
September 6, 2022
One unique element of Thailand’s current court procedure is in the way records of witnesses’ courtroom testimony are created. Instead of using a court stenographer to create a verbatim record, the typical method used in Thai courts is for the judge to provide a summary of the witnesses’ courtroom statements. After listening to a witness’ answers to the parties’ questions, the trial judge speaks a summary of the witness’ answers—according to the judge’s own understanding—into an audio recorder, and a court clerk then transcribes it so that it can be read for all parties and the witness to confirm the accuracy of the content. However, Thailand is now exploring ways to update this practice with a system that creates video recordings of witness testimony. Creating a video record of witness testimony was introduced into the Thai court system for some court cases handled by the Intellectual Property and International Trade Court and the Central Bankruptcy Court. However, recording video of witness testimony was not done in general criminal or civil cases until an October 2021 regulation allowed use of video recording in certain important cases and when a witness’ movement is an important element of the testimony. Since then, video of witness testimony was recorded in some criminal cases when the movement of the witness during the testimony was an important factor for the court to consider in deciding the case, such as an eyewitness testifying about a defendant’s movement in committing a crime. So far the practice has remained rare, but it has been done enough to demonstrate the viability of the practice. Now that this has proved ready, Thailand is considering widening the use of video recording for witness testimony in all court cases, starting with criminal cases in Bangkok. Recording witness statements on video is thought
Read More
August 29, 2022
Disputes are unavoidable in the business world—not only civil disputes between business partners but also criminal matters, in which a company or its representatives, or even an individual, are accused of legal or regulatory violations or other crimes. While this can be a daunting situation—especially for those facing a criminal matter in a jurisdiction with unfamiliar laws or litigation processes—knowing what to expect out of criminal proceedings can bring clarity and make the situation feel much more manageable. Thailand, for instance, is a vibrant economy in the heart of Southeast Asia that has attracted many businesses to pursue opportunities in the country. However, the relatively well-developed and sometimes unfamiliar regulatory regime in Thailand means that companies can unintentionally fall afoul of the legal requirements and find themselves having to defend against criminal litigation. In such a situation, understanding  how criminal proceedings work in Thailand  is critical step to  prepare for the case. Thailand’s legislative system is  based on a civil law system. Notably, however, Thai courts are still influenced by previous Supreme Court decisions as precedent references for adjudicating cases. Most criminal offenses are contained in the Penal Code (also called the Criminal Code). There are also other offenses prescribed in the country’s acts (of which there are approximately 1,000), which specify the obligations and prohibitions people must observe. Although most offenses are misdemeanors, many are nonetheless punishable by imprisonment—a dire prospect for anyone, and even more so for an accused party whose home country is not Thailand. By its nature as a juristic person, a company charged with a criminal offense is subject only to fines. However, company directors or other representatives are often accused as codefendants along with the juristic person itself. These individuals can be found guilty for the offense conducted by the juristic person if
Read More
August 23, 2022
Indemnification clauses are common contractual provisions in many jurisdictions including Thailand, but enforcing them can be challenging in the eyes of Thai law. In general, to “indemnify” means to hold another party free of responsibility for a potential risk or loss. When one party (i.e., the “indemnitor”) indemnifies another party (i.e., the “indemnitee”), the indemnitor is obligated to pay or compensate the indemnitee for any liabilities or losses (within the scope agreed in the contract). In this way, an indemnification clause can be a useful provision to shift responsibility for potential risks from one party to another. In some jurisdictions, “indemnity” includes the recovery of attorneys’ fees incurred by the indemnitee. It may even carry with it the duty to defend or fund the defense of any claim brought against the indemnitee. If that is the case, even though the contract does not say so, the indemnitor would have to hire an attorney and pay the legal fees for the indemnitee. In contracts that contain an indemnification clause, the indemnity would typically include the duty to defend. Let’s use a case example to elaborate this point. In this hypothetical case, a supplier of machinery agrees to indemnify and defend a retailer against claims from the retailer’s customer in the event that a purchased machine becomes defective. As a result, besides being responsible for the damages that the retailer may suffer based on contract law or negligence, the supplier must also pay for the lawyers to defend the retailer if the customer decides to sue. In Thailand, this kind of indemnification clause may not be enforceable. Unlike contract rules in many jurisdictions, Thai contract law is silent on “contractual indemnity.” It is commonly understood in Thailand (and confirmed by Supreme Court decision 7943/2542) that “indemnity” means “compensation” under section 222
Read More