7 April
Introduction
Disputes are inseparable part of homo sapiens and it would lead to disaster if they are left unchecked. Because of this tendency people seek ways to settle the disputes amicably. Settling disputes amicably herein means settling disputes without resorting to force or coercion or litigation (Adjudication) but by using conciliation, mediation, and arbitration.
Those methods of settling disputes are collectively referred to as “Alternative Dispute Resolution (ADR). Conciliation is a method where a third party facilitates communication between parties in dispute in an attempt to help them settle their differencesl. Mediation is almost the same as conciliation except that the mediator assists the parties throughout the mediation process to help them reach a solution to their dispute by themselves. Unlike in the case of conciliation, a mediator cannot propose a solution to end the dispute. Both conciliation and mediation are informal, unstructured processes, they cannot decide or make a solution.
Arbitration in essence is same as conciliation and mediation in that a neutral third party involves in settling a dispute. But the arbitrator has power to make decision, i.e, can decide who is right or who is wrong and he can also make a solution, based on the evidence, on his own. Arbitration is a formal, structured process and its decision has binding power over the disputed parties by way of their own consent. Arbitration is one of the oldest method of settling disputes peacefully and it was practiced in ancient Greece and Rome. Arbitration is a familiar and most-favoured method of settling disputes in ancient Myanmar legal history. We do have many digests of famous arbitrators such as Khone Taw Mg Kya Bun et al.
Why Arbitration
People favour settling disputes by Arbitration. In the research done by PWC (Price waterhouse Coopers) and Queen Mary College, University of London, it is found that 73% of the respondent corporations favour Arbitration over litigation Why?
The first and foremost factor that attracts people in disputes to Arbitration is saving factor. Because of congestion in courts and their appellate process, resolutions of disputes by litigation is more expensive and slower than Arbitration.
Therefore, compared to litigation, Arbitration provides significant savings in terms of both time and money3 . In essence, Arbitration aims to resolve disputes with maximum speed and at minimum cost.
The second important factor which makes preference to Arbitration over litigation is the involvement of technical or industry experts. By the very nature of technical or industrial disputes, such disputes are difficult for a non-expert to understand. The arbitral process can be tailored to fit the issues, i.e., by appointing lechnlcal or Industrlal experts as Arbitrators provldlng partles wlth greater confidence that the substance of their dispute is properly understood by those deciding its outcome. It may be argued
1 - Black Law Dictionary, Fifth Pocket Edition, P .148
2 - Halsbury’s Laws of Singapore, Vol 2, Butterworths, 1998, P.3
3 - Law, Practice and Procedure of Arbitration- Sundra Rajoo, second edition, P .50 that experts can be appointed for technical expertise in litigation process. It is True.
But there is a real danger that a judge without the requisite technical expertise and experience may be influenced more by the confidence of the expert in his opinion, and the expert’s powers of persuasion than by the actual technical merits of the evidence. That is the reason he german descent British Citizen the famous Judge, Jurist and writer, Sir Michael Kerr opined that the calibre and experience are of paramount importance for Arbitrators Let me quote the famous Lord Justice Mustill here. The Lord said: “The great advantage of Arbitration is that it combines strength with flexibility. There is strength because Arbitration yields enforceable decisions, and is backed by a judicial framework which, as a last resort, can call upon the coercive powers of the state. Flexible because it allows the contestants to choose procedures which fit the nature of the dispute and the business context in which it occurs”5 .
Arbitration Law in Myanmar The world’s earliest Arbitration Law was enacted in England in 1698 . The first Myanmar Arbitration Law is the Arbitration Act of 1944 which came into force on 1st March 1946. It is repealed by the existing Arbitration Law of 2016. The existing Law has four distinct features:
(1) It encourages to settle disputes by arbitration (Section 4( C) ),
(2) Arbitral awards whether it was handed in Myanmar or oversea shall be enforced by courts (Section 40, Section 45) ,
(3) It recognizes the finality of arbitral awards (Section 38), and
(4) It encompasses all the elements of arbitration which will be explained hereunder. The Elements of Arbitration Settling disputes by Arbitration consists of three elements:-
(1) The Arbitration Agreement or clause,
(2) Party Autonomy, and
(3) Judicial Element.
In order for a dispute to be resolved by Arbitration, the essential requirement is an Arbitration Agreement or Clause, without this there would be no Arbitration at all. This Agreement or clause usually provides that the dispute if any between parties shall be resolved by Arbitration, referring to certain Arbitration Law, venue and governing laws. The Arbitration Law 2016 of Myanmar defines Arbitration Agreement “as a written agreement by parties to settle all or some disputes which have arisen or which may arise in respect of a legal relationship, whether contractual or not .
The second element of Arbitration is “Party Autonomy”. It is the hallmark of Arbitration. It means that the disputed parties have a choice not only to refer their dispute to arbitration and to choose their own arbitrators, but also to prescribe the time frame for such reference.
The Principle of “Party Autonomy” is given statutory force by the Myanmar Arbitration Law 2016 at section 7 and 22(a).
The Judicial Element is the third element of Arbitration. The Arbitrator is obliged to decide any dispute referred to him in accordance with the rules of natural justice. Natural justice comprises two principles.
The first principle is the principle that a decision-maker must hear to a person whose interests will be adversely affected by the decision. It means that the decision-making must not only hear the voice of one disputed party but must also hear the voice of other disputed party. This principle in short is known as “the right to be heard (audi alteram partern in latin). This principle is given force of law by section 21 of the Myanmar Arbitration Law 2016. The second principle of natural justice is “the rule against bias”. This principle said that Arbitrators must be free from bias. It is enshrined in our Arbitration Law 2016 at section 14(a) (b) and 14 (c) (1).
Myanmar Arbitration Centre
In Myanmar, contracts entered with foreign parties have arbitration clauses and they usually refer to foreign arbitration. But there was a time when the Arbitration Act 1944 of Myanmar was mentioned in Arbitration Clauses particularly in contracts entered by Myanmar Government Departments and foreign parties. Since the dawn of democracy in 1989 when our country revisited market economy the Arbitration Clauses especially in private contracts refer again to foreign arbitration.
We have difficulties in going for foreign arbitration. We do not simply have knowledge of laws of those foreign arbitrations and have to hire expensive lawyers. We have to put deposits in the region of 10% of the disputed amount. We have to travel to and fro between Myanmar and the seat of arbitration to give testimonies etc. These will incur expenses and become a financial burden. Language might also be a barrier for us. Time is also of essence.
Because of the abovementioned factors we normally could not afford foreign arbitration. We are on the losing edge when it comes to disputes and then eventually we have to be generous or patient or forgiven.
In view of this and because of the existing Arbitration Law of 2016 which encourages to settle disputes by Arbitration, the idea was born to set up Myanmar Arbitration Centre (MAC) under the auspices of UMFCCI.
In setting up MAC, three pillars need to be erected. The first pillar is drafting of a set of procedures to be used in Arbitration Tribunals. It is now ready for use after 11 months of repeated reviews and amendments.
It is in line with section 22(a) & (b) of the Arbitration Law 2016.
The second pillar is to set up an organization which will be the Secretariat of Arbitration Tribunals under the umbrella of UMFCCI.
That organization will see everything from training and certification of Arbitrators, purvey seat for Arbitration, acting as office for Arbitration Tribunals etc. That organization by the title of Myanmar Arbitration Centre Co. Ltd. has been formed as a limited company by guarantee, may be first of its kind, with 12 directors, a constitution and a mandate of UMFCCI.
The third pillar is the selection and training of would be Arbitrators. MAC under UMFCCI will run Arbitrator training for selected industry veterans and will award Proficiency Certificate to those who pass the test after completion of the training. They will be trained in Arbitration Law and procedure together with related legal knowledge.
The whole process of MAC has now almost been completed and UMFCCI will officially open MAC in this year of its centenary. We will see in a very near future the historic Myanmar Arbitration Centre to fill up the large gap in the development of Myanmar Industry and Trade.
References I-Black’s Law Dictionary, Fifth Pocket Edition 2- Halsbury’s Laws of Singapore, Vol 2, Butterworths, 1998, P. 33- Law, Practice and procedure of Arbitration- Sundra Rajoo, second edition 4- Bernstein and Wood’s Handbook of Arbitration, 2nd edition, 1993 5- Arbitration Practice and Procedure, Mustill, L J 2nd Edition, 1997 6- Historical Background of Commercial Arbitration, Earl S. Wolaver, University of Pennsylvania Law Review, December 1934, P.143, https:// retrolarship .law.upenn.edu 7- The Arbitration Law (2016, Pyidaungsu Hluttaw Law No. 5) 8- - Arbitration in Malaysia, A Practical Guide, Sweet & Maxwell, First Reprint, February 2017, P.2 About the Author The former Deputy Minister of Finance Dr. Maung Maung Thein [Ph. D. (International Economic Law), LL.M. (International Law and Maritime Law), LL.B., B.A. (Law), Associate of ANZIIF, Pg. Dip in Applied Psychology] is a consultant of UMFCCI and working as Executive Chairman in Zico Law Firm Myanmar. He is also the Chairman of the Secretariat Conservation Group. He studies law, economics and finance.
By Dr. Maung Maung Thein
