Myanmar's decision to accede to the New York Convention is a positive sign for foreign investors and resources companies contemplating doing business in the State. Parties to arbitration agreements with entities in Myanmar will potentially be able to enforce any award obtained as if it were a judgment of a court in Myanmar. However, it is important to keep in mind that Myanmar's accession to the New York Convention is just the first step in providing a certain and consistent dispute resolution framework for foreign investors.
Myanmar is the most recent signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), having formally acceded on16 April 2013. The New York Convention facilitates the recognition and enforcement of foreign arbitral awards by requiring contracting states to enforce valid arbitration agreements and arbitral awards.
Myanmar is rich in gas, oil and minerals with approximately 50m barrels of proven oil reserves and 280 billion cubic metres of gas. Its decision to accede to the New York Convention is a positive sign for foreign investors and resources companies contemplating doing business in the State. It effectively means that a party to an arbitration agreement with an entity based in Myanmar will be able to enforce any award obtained as if it were a judgment of a court in Myanmar. Before the accession to the New York Convention a party with a claim against an entity incorporated in Myanmar, or with its assets located in Myanmar, would have been required to go through the local courts to seek a remedy.
However, it is important to keep in mind that Myanmar's accession to the New York Convention is just the first step in providing a certain and consistent dispute resolution framework for foreign companies entering the State. Necessary domestic legislation incorporating international best practice in relation to international arbitration will need to be enacted in Myanmar to facilitate its obligations under the New York Convention. Further, the local judiciary will require training on the interpretation and application of the legislation.
The New York Convention is scheduled to come into force in Myanmar on 15 July 2013. It remains to be seen whether Myanmar has agreed to be unreservedly bound by the Convention or whether conditions and reservations are attached. It is hoped Myanmar will adopt the UNCITRAL Model Law in its domestic legislation to implement international best practice. In terms of comfort for prospective investors – the devil will lie in the detail.
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