Dispute Resolutions in Cambodia

Cambodia has a court system as seen in most other countries. However, the Cambodian legal system is developing and with that comes inherent uncertainties in the enforcement of rights before Cambodian courts.
Under Cambodian law, contracts may be governed by foreign law. There is no restriction under the Civil Code of Cambodia regarding the choice of governing law in an agreement. However, the Cambodian court does not hear or apply foreign law, so if the parties decide to choose foreign law as the governing law of a contract, it will be necessary to use the foreign court or foreign arbitration as the competent jurisdiction for the resolution of the dispute. Nevertheless, a judgment of a foreign court is only enforceable in Cambodia if certain conditions are met, one of which is the requirement for such foreign country to also recognize Cambodian court judgments. Currently, there are no such reciprocal arrangements. Therefore, if foreign law is chosen, the only dispute resolution mechanism available is foreign commercial arbitration. As Cambodia is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, a foreign arbitral award can be enforced in Cambodia, provided that it has first been endorsed by the Cambodian appeal court.
Given the uncertainty of Cambodian courts, the lack of independence of the judiciary, and the inability to enforce foreign judgments in Cambodia, many foreign investors choose arbitration outside Cambodia as the preferred method of dispute resolution for contracts entered into in Cambodia. To settle any commercial disputes, most investors use the International Arbitration Centers in Singapore or Hong Kong, or the Paris International Chamber of Arbitration.