Following the adoption of the new Constitution in 1993, Cambodia applied free market economy and free trade agreements began flourishing since then. Business transactions may not always be smooth and differences usually happened. This would result in disputes. Most common dispute settlement method is litigation where litigants requested courts to make decisions. Over the years, the Parliament and the Royal Government of Cambodia (RGC) had enacted several laws and regulations governing dispute settlements.

Currently, the commercial and civil litigations follow the same Civil Procedure Code applicable at the civil courts. RGC commits to have the long-awaiting Commercial Court and rules governing commercial litigations operated and running in the near future. At the meantime, businessmen can opt for alternate, efficient and cost-saving mechanism which can solve commercial disputes out of court using the mediation and arbitration. Cambodia enacted the Law on Commercial Arbitration in 2006. This law established the National Commercial Arbitration Centre (NCAC) which was fully operated in 2013 . Within ten-year period, NCAC received approximately 40 cases with total dispute amounts worth a hundred millions of US dollars. (For more about ADR, see ADR in Cambodia post)

Commercial and civil litigations begin at the filing of complaints at the First Instance Court (For court structure see Criminal Justice in Cambodia post). Generally, the court where the defendant resided (including the juridical person / legal entity) has the jurisdiction. After reviewing the conformity and formality of the complaint, the court will send the complaint to the defendant. Within thirty days after filing the complaint, the court conducts preparatory proceedings for oral argument where all parties are invited to attend. The main purposes of the preparatory proceedings for oral argument is to prepare list of issues in the case and evidence pertaining to those issues. The issues will be the central points for next phase of proceedings which is the oral argument hearing. Once the hearing completed, the judge will enter the judgement either ruling against or in favor of the plaintiff. The losing party has the right of appeal to the Court of Appeals and ultimately to the Supreme Court.

The final judgement (title of execution) may be the subject to compulsory execution that generally is a jurisdiction of an execution court (for movable property, it is the jurisdiction of Bailiff) situated at the same First Instance Court where the initial dispute took place. The execution court will issue execution order which may be subject to a motion of objection by the parties (debtor or creditor in execution). Third party who has the ownership of the attached property that is the subject to execution may file third party objection suit. Once the execution order is final, the attached property will be subject to a forced sale either through auction or tender.

It should be noted that during the litigation proceedings, the parties may apply for preservative relief (injunction) if the parties have reason to believe that the execution will become impossible or extremely difficult due to the alteration of the state of the property of the debtor in execution, or significant damage or imminent risk will arise affecting the status of one of the parties. There are several types of preservative relief that the execution court (or bailiff) may rule upon the request by parties.

Any question about the proceedings relative to either commercial or civil litigations can be inquired to the SP Khmer Legal Law Office (Contact Us).

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by : Mosseny