Investment Treaty Arbitration

Investment Treaty Arbitration: Cambodia

Overview of investment treaty programme

1. What are the key features of the investment treaties to which this country is a party?

Cambodia

BIT Contracting Party or MIT

Substantive protections

Procedural rights

Fair and equitable treatment (FET)

Expropriation

Protection
and security

Most-favoured-nation (MFN)

Umbrella clause

Cooling-off period

Local courts 2

Arbitration

Austria (not in force)

Text not available.

Belarus (not in force)

Text not available.

China (1 February 2000)

Yes

Yes

Yes1

Yes

No

6 months

Yes

Expropriation only

Croatia (15 June 2002)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Cuba (not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Czech Republic (23 October 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

France (24 July 2002)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Germany (14 April 2002)

Yes

Yes

Yes

Yes

Yes

6 months

No

Yes

Hungary (not in force)

Text not available.

Indonesia (not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Japan (31 July 2008)

Yes

Yes

Yes

Yes

Yes

No

Yes

Yes

Korea, Democratic People’s Republic of (not in force)

Text not available.

Korea, Republic of (12 March 1997)

Yes

Yes

Yes

Yes

Yes

6 months

Yes2

Yes

Kuwait (not in force)

Text not available.

Lao People’s Democratic Republic (not in force)

Text not available.

Malaysia (not in force)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Netherlands (1 March 2006)

Yes

Yes

Yes

Yes

Yes

3 months

No

Yes

Pakistan (not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes 3

Philippines (not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Russia (not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Singapore (24 February 2000)

Yes

Yes

Yes

Yes

No

6 months

Expropriation only4

Yes

Switzerland (28 March 2000)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Thailand (16 April 1997)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Vietnam (not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

ASEAN Comprehensive Investment Agreement (ACIA) (29 March 2012)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

 

FTAs/EPAs

Substantive protections

Procedural rights

Fair and equitable treatment (FET)

Expropriation

Protection and security

Most-favoured-
nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

ASEAN-ANZ (1 January 2010)

Yes

Yes

Yes

No5

No

6 months

No (unless disputing party is Philippines or Vietnam)

Yes

ASEAN-China (15 February 20106 )

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

ASEAN-India7

No

No

No

No

No

No

No

No

ASEAN-Japan8

No

No

No

No

No

No

No

No

ASEAN-Korea (2 June 2009)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Qualifying criteria - any unique or distinguishing features?

2. What are the distinguishing features of the definition of “investor” in this country’s investment treaties?

Cambodia

Issue

Distinguishing features in relation to the definition of ‘investor’

Seat of the investor / place of business

Most Cambodian investment treaties provide that any national of a Contracting Party or legal person established in accordance the law of a Contracting Party (ie a country that is party to the treaty) is an investor.

The Croatia and Pakistan BITs provide that where an investor is a legal (as opposed to a natural) person, it must have its ‘seat’ and ‘perform real business activity’ in the territory of the Contracting Party where it is incorporated, constituted or otherwise duly organised. The Germany BIT applies the precondition that Cambodian investors have their ‘seat’ in the territory of Germany (but there is no equivalent requirement for German investors).

The France BIT provides that a corporate investor constituted in the territory of a Contracting Party must have a registered place of business (siège social) in the territory of the same Contracting Party, or be directly or indirectly controlled by nationals of one of the Contracting Parties, or by legal persons have their registered place of business in the territory of one of the Contracting Parties and are constituted according to the legislation of that Contracting Party.

Control by a non-national

The Netherlands BIT specifically protects legal persons not constituted under the law of a Contracting Party but who are controlled, directly or indirectly, by natural persons having the nationality of a Contracting Party or legal persons constituted under the law of a Contracting Party.

The Switzerland BIT specifically protects legal persons which are not constituted under the law of a Contracting Party but which are more than 50% owned by a natural or legal person having the nationality of a Contracting Party, or in respect of which a natural or legal person of a Contracting Party has the capacity to appoint a majority of directors or otherwise legally entitled to manage its operations.

The ACIA, Cambodia’s ASEAN FTAs and the Japan BIT provide the Contracting Parties with a discretion to deny protection to investors of the other Contracting Party if the investor is an enterprise which is owned or controlled by an investor of a non-Contracting Party and the enterprise has no substantial business activities in the other Contracting Party (ie a denial of benefits clause). While there are no publicly available decisions to offer guidance on what substantial business activities mean, it is reasonable to assume that denial of benefits will take into account: (i) existence of residential managers; (ii) tax payments; and (iii) substantial transactions in jurisdiction. These indicators of business activities have been recognised by tribunals constituted under the Energy Charter Treaty.

The Japan BIT also provides the Contracting Parties with a discretion to deny protection to investors where they are owned or controlled by an investor of a non-Contracting Party with whom the denying party does not maintain diplomatic relations (or where the denying party adopts or maintains measures with respect to the non-Contracting Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of the BIT were accorded to the enterprise or its investments).

Permanent residents

The term ‘investor’ is normally defined to include only citizens or nationals of a Contracting Party (and not permanent residents). However, the Malaysia BIT specifically includes permanent residents.

3. What are the distinguishing features of the definition of "investment" in this country’s investment treaties?

Cambodia

Issue

Distinguishing features in relation to the concept of ‘investment’

Assets which qualify for protection

Most Cambodian investment treaties define ‘investment’ to include ‘every kind of asset’ invested by investors of one Contracting Party, followed by a non-exhaustive list of examples of assets that qualify as investments.

Some of the Cambodian investment treaties expressly require that protected investments must be ‘invested in connection with economic activities’ (Czech Republic BIT, Pakistan BIT)

Indirect control of assets

Some Cambodia investment treaties expressly include in the definition of ‘investment’ assets controlled indirectly by a protected investor (eg Japan BIT)

Specific inclusions

In many of Cambodia’s investment treaties and Cambodia’s ASEAN FTAs, the definition of ‘investment’ specifically extends to intellectual property rights, which may include technical processes, goodwill and know-how (Indonesia, Japan, Republic of Korea, Malaysia, Netherlands, Philippines, Singapore, France, Thailand, Vietnam BITs).

Exclusion of certain assets

The ACIA and ASEAN-ANZ FTA expressly exclude from the definition of ‘investment’ claims to money that arise solely from commercial contracts for the sale of goods or services, or the extension of credit in connection with such commercial contracts.

The Pakistan BIT excludes from the definition of ‘investment’ certain types of asset such as contracts to provide a service and construction contracts. It also restricts protected investments to assets or money ‘in connection with economic activities connected with business by an investor (...) for setting up, establishment or control of Industry, undertaking or establishment engaged in the production, distribution or processing of any goods or the development and extraction of such mineral resources and products as may be specified in this behalf by the Contracting Party’.

Admission / approval of an investment

Many Cambodia investment treaties expressly require investments to have been made in accordance with the laws and regulations of the Contracting Party where the investment is made (China, Croatia, Cuba, Czech Republic, Indonesia and Vietnam BITs).

Some Cambodian investment treaties expressly require investments to have been ‘admitted’ by a Contracting Party in conformity with that Contracting Party’s laws and regulations (Philippines BIT). The ACIA requires that a ‘covered investment’ must be admitted according to the laws, regulations and national policies of an ASEAN Member State and, where applicable, specifically approved in writing by the competent authority of a Member State (the contact details of which are, according toe Annex 1 to the ACIA, to be notified by ASEAN Member States to the ASEAN Secretariat).

The Singapore BIT requires that for investment made in Singapore by Cambodian nationals, protection is only afforded where the investment has been specifically approved in writing by the competent authority designated by the Government of Singapore.

Substantive protections - any unique or distinguishing features?

4. What are the distinguishing features of the fair and equitable treatment standard in this country’s investment treaties?

Cambodia

Issue

Distinguishing features of the fair and equitable treatment standard

Illustrations of the FET standard

While most Cambodian investment treaties simply provide that each Contracting Party shall ensure fair and equitable treatment to investments, the ASEAN-ANZ, ASEAN-China and ASEAN-Korea FTAs and the ACIA are more prescriptive. These agreements provide that fair and equitable treatment requires ‘each Party not to deny justice in any legal or administrative proceedings’.

Customary International Law

At least five Cambodian investment treaties expressly equate the obligation to provide fair and equitable treatment with the concept of fair and equitable treatment under customary international law (Croatia BIT, Japan BIT, France BIT, ASEAN-ANZ FTA, ASEAN-Korea FTA)

5. What are the distinguishing features of the protection against expropriation standard in this country’s investment treaties?

Cambodia

Issue

Distinguishing features of the ‘expropriation’ standard

Right to regulate for a public purpose

While all Cambodian investment treaties provide protection against expropriation without adequate compensation, the right to compensation under the ASEAN-ANZ FTA and the ACIA is expressly excluded where the expropriation is a result of non-discriminatory actions that are ‘designed and applied to achieve legitimate public welfare objectives, such as the protection of public health, safety, and the environment. 9

Expropriation of land

The ASEAN-China FTA expressly provides that ‘any measure of expropriation relating to land shall be as defined in the expropriating Party’s existing domestic laws’. The ACIA contains an almost identical provision.

The ASEAN-ANZ FTA and ASEAN-Korea FTA provide that expropriation of land by ‘Singapore or Viet Nam (…) shall be for a purpose and upon payment of compensation made in accordance with’ existing domestic legislation.

Indirect expropriation

At least two Cambodian treaties expressly protect against indirect expropriation (ASEAN-ANZ FTA, ACIA)

Limited right to arbitration

Unlike Cambodia’s other investment treaties, the China BIT only provides a right to arbitration where the dispute ‘relates to the amount of compensation payable’ as a result of an expropriation of property. A number of tribunals have considered whether this merely affords investors a right to refer to arbitration disputes regarding the quantification of the value of any property that has been taken by the host state or whether the merits of the dispute (ie whether or not an expropriation has occurred) can also be referred to arbitration.

Expropriation in accordance with the ‘due process of law’

Most of Cambodia’s investment treaties require that any expropriation of an investment must occur under ‘due process of law’. However, the ASEAN-China FTA, China BIT and Singapore BIT merely require that the expropriation occur in accordance with the laws of the expropriating state. The Korea BIT requires that the expropriation be in accordance with ‘legal procedures’.

Right to prompt review of compensation

At least five of Cambodia’s BITs provide the investor whose investments are expropriated with the right to a prompt review of its case by a judicial or other competent authority of that Contracting Party (Croatia, Czech Republic, Pakistan, Japan and Korea BITs).

6. What are the distinguishing features of the national treatment/most-favoured-nation treatment standard in this country’s investment treaties?

Cambodia

Issue

Distinguishing features of the ‘national treatment’ and/or ‘most favoured nation’ standard

Common exceptions to MFN treatment

Most Cambodian treaties expressly provide that the provision of ‘most favoured nation’ and/or ‘national’ treatment to an investment does not extend to the benefits of membership of a customs union, monetary union or free trade area, nor to taxation agreements and/or taxation legislation.

The ACIA provides that MFN does not apply to the benefits of any treatment from any sub-regional arrangements between Member States and any existing agreement notified by Member States to the ASEAN Investment Area Council. It is important to note also that Article 6 of the ACIA on MFN treatment contains a footnote which provides that “this Article shall not apply to investor–state dispute settlement procedures that are available in other agreements to which Members States are party”. This “Maffezini” carve-out is one of a number of provisions in the ACIA that distinguishes it from Cambodia’s other investment treaties, particularly its more investor-friendly BITs.

The ASEAN-China FTA provides that MFN does not apply to the benefits of any treatment from any existing bilateral, regional or international agreements and any existing or future agreement or arrangements between ASEAN members.

The Singapore BIT provides that MFN does not apply to the benefits from any arrangement with a third State or States in the same geographical region designed to promote regional cooperation in the economic, social, labour, industrial or monetary fields within the framework of specific projects.

The Japan BIT includes a reservation allowing Japan to adopt or maintain measures relating to ‘investments in public law enforcement and correctional services, and in social services such as income security or insurance, social security or insurance, social welfare, primary and secondary education, public training, health and child care.’ National treatment and MFN also do not apply to measures adopted with respect to sectors or activities as set out in the Party’s Schedule.

Scope of MFN treatment

Generally, the MFN protection contained within Cambodia’s BITs applies to ‘investments’ and ‘returns on investments’.

The China BIT expressly extends protection to activities associated with investments.

The Croatia, Czech Republic, Pakistan, Republic of Korea and Thailand BITs extend the guarantee of MFN treatment to the ‘management, maintenance, enjoyment, use or disposal’ (or similar provisions) of the investment. The ACIA and the ASEAN-China FTA extend protection to ‘admission, establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments.’

National treatment only

The ASEAN-ANZ FTA does not guarantee investors MFN treatment. However, it does guarantee investors ‘national’ treatment in respect of investments. Investors considering the ACIA as a protection instrument should carefully consider any reservations exercised by ASEAN Member States under Article 9 of the ACIA.

Non-conforming measures

The ACIA and ASEAN-ANZ FTA provide that national treatment does not apply to any existing non-conforming measure that is maintained by a Party at a local level of government or as set out by that Party in its Schedule. The ASEAN-ANZ FTA also provides that national treatment does not apply to measures adopted with respect to sectors or activities as set out in the Party’s Schedule.

The ASEAN-China FTA and Japan BIT provide that both national treatment and MFN do not apply to any existing non-conforming measure that is maintained by a Party at a local level of government or as set out by that Party in its Schedule.

7. What are the distinguishing features of the obligation to provide protection and security to qualifying investments in this country’s investment treaties?

Cambodia

Issue

Distinguishing features of the ‘protection and security’ standard

Scope

The formulation of the standard varies in Cambodia’s investment treaties. Some provide for ‘full protection and security’ (eg, Czech Republic, Germany and Thailand BITs). Others merely require the ‘protection’ of investments (eg, China and Singapore BITs). In the ACIA, ASEAN-ANZ and China FTAs, the obligation is framed as pertaining to those measures which ‘may be reasonably necessary to ensure the protection and security of the… investments’. Whether or not these different formulations equate to different levels of protection is open to debate.

Customary international law on protection and security

The obligation to provide protection and security is limited in the ASEAN-ANZ and ASEAN-Korea FTAs to that required under customary international law.

8. What are the distinguishing features of the umbrella clauses contained within this country’s investment treaties?

Cambodia

Issue

Distinguishing features of any ‘umbrella clause’

Scope

The Netherlands, Germany, Japan, Croatia, Korea, Thailand BITs and ASEAN-China FTA contain umbrella clauses, to the effect that each Contracting Party shall observe any obligation it may have entered into with regard to investments of investors of the other Contracting Party. There are no particular distinguishing features.

9. What are the other most important substantive rights provided to qualifying investors in this country?

Cambodia

Issue

Other substantive protections

Free transfer of payments

All Cambodian investment treaties contain a provision which requires the Contracting Parties to permit investors to transfer investments and investment returns freely. This protection is often subject to the laws and policies of the host state, including those concerning bankruptcy. However, there is no such exception in the Netherlands, Germany, Singapore, Thailand and Republic of Korea BITs. Under some agreements, the host state can suspend the obligation should it suffer serious balance of payment difficulties (ASEAN-ANZ, ASEAN-China, ASEAN-Korea FTAs).

Non-impairment

At least 10 Cambodian BITs impose upon Contracting Parties an obligation not to impair the management, maintenance, use, enjoyment or disposal of investments (Croatia, Cuba, Germany, Indonesia, Pakistan, the Phillippines, Republic of Korea, the Netherlands, Thailand, Vietnam). No similar obligation is contained in any of Cambodia’s ASEAN FTAs, although it arguably falls within the obligation to provide fair and equitable treatment.

Armed conflict/civil unrest

All Cambodian investment treaties guarantee investors of Contracting Parties ‘most favoured nation’ treatment in regards to compensation paid to other investors of other states in the case of armed conflict or civil unrest.

At least 13 treaties also provide for ‘national’ treatment in such circumstances (ASEAN-ANZ FTA, ASEAN-China FTA, Croatia, Czech Republic, Germany, Japan, Republic of Korea, the Netherlands, Thailand, Cuba, Pakistan, the Philippines and Vietnam BITs).

Transparency

The ASEAN-ANZ provides that each Party shall ‘promptly’ publish any measure that it proposes to adopt and provide interested persons of the other Party with an opportunity to comment on such proposed measures. Under the ASEAN-China FTA the obligation is to ‘promptly and at least annually notify the other Parties of the introduction of any new law or any changes to its existing laws.’ The ASEAN-Korea FTA requires that any new laws be ‘promptly’ made publically available.

General exceptions

Some Cambodian treaties include General Exception clauses which provide that nothing in the relevant treaty prevents a party from adopting or enforcing any measure that complies with the General Exception clause (Singapore BIT, ACIA, ASEAN-ANZ 10 , ASEAN-China and ASEAN-Korea FTAs). The types of measures falling within the General Exception clause vary from treaty to treaty. The ASEAN multilateral agreements have almost identical General Exception clauses while the Singapore BIT provides for a narrower range of regulatory action.

Procedural rights in this country’s investment treaties

10. Are there any relevant issues related to procedural rights in this country’s investment treaties?

Cambodia

Issue

Procedural rights

Fork-in-the-road

Some Cambodian investment treaties contain so-called fork-in-the-road provisions (ACIA ASEAN-ANZ, ASEAN-China, ASEAN-Korea FTAs). That is, investors must elect either to pursue their claim through the local courts or by international arbitration. They cannot do both. However, these treaties expressly provide that the election to submit a dispute to arbitration may not preclude an investor commencing proceedings in local courts to obtain certain types of interim relief.

Under the ASEAN-China FTA, a dispute may be submitted to international dispute settlement after the case has been withdrawn from the domestic courts. However, in the case of the Indonesia, Philippines, Thailand and Vietnam BITs, once the investor has submitted the dispute to a court or tribunal, the choice of dispute settlement procedure is final.

Waiver of local remedies

Some treaties condition the right to commence arbitration on an investor having waived its right to pursue any cause of action arising from the same circumstances giving rise to the alleged breach of the treaty in the Contracting Party’s courts or tribunals (ACIA and ASEAN-ANZ FTA).

Exhaustion of local remedies

None of Cambodia’s investment treaties require the exhaustion of local remedies before the commencement of arbitration.

ICSID or ad-hoc arbitration

Most Cambodian investment treaties provide a right of recourse to ICSID. Some treaties also allow investors to pursue an arbitration claim through: (a) an ad hoc tribunal constituted in accordance with the UNCITRAL rules (eg, ACIA, ASEAN-ANZ FTA, Singapore, the Netherlands and Thailand BITs); and/or (b) any other tribunal acting in accordance with any other arbitration rules as is mutually agreed by the parties (eg, ASEAN-China FTA, ASEAN-Korea FTA, Japan BIT).

Time limits

At least five Cambodian investment treaties require that a claim be commenced within three years of the investor having first acquired knowledge of the facts giving rise to the alleged breach (ACIA, ASEAN-ANZ FTA, ASEAN-China FTA, ASEAN-Korea, Japan BIT).

Use of MFN to expand procedural rights

Some Cambodian investment treaties expressly provide that MFN treatment does not encompass investor-State dispute settlement procedures or mechanisms (eg, ACIA and ASEAN-China FTA).

Applicable law

Some Cambodian investment treaties provide certain guidance as to what law or laws are to govern the parties’ dispute. The Croatia and Japan BITs provide that the arbitral tribunal shall reach its decision in accordance with the treaty and applicable rules of international law. Some treaties provide that the arbitral tribunal must have regard to the treaty, any other applicable agreements between the Parties, any relevant rules of international law and, where applicable, any relevant domestic law (ACIA, ASEAN-ANZ FTA, Czech Republic BIT).

The China BIT provides that the tribunal shall adjudicate ‘in accordance with the law of the Contracting Party to the dispute accepting the investment including its rules on the conflict of laws, the provisions of [the treaty] as well as the generally recognized principles of international law accepted by both Contracting Parties’.

Preliminary issues

The ACIA and ASEAN-ANZ FTA provide that objections to jurisdiction or a submission that a claim is manifestly without merit must be heard and determined by the tribunal as a preliminary issue.

Confidentiality

The majority of Cambodia’s investment treaties are silent on the issue of confidentiality. However, the ASEAN-ANZ FTA provides that the parties’ submissions can be made public in certain circumstances. The ACIA provides that the disputing Member State may make all decisions and awards of the arbitral tribunal publically available.

11. What is the status of this country’s investment treaties?

Cambodia

Most of Cambodia’s BITs can be unilaterally terminated by a Contracting Party at any time after the end of the initial term of the treaty (either 10 or 15 years) by giving one year’s written notice of termination. For some BITs notice must be given 6 months or one year before the expiration of the initial or any subsequent term. All of Cambodia’s BITs incorporate a ‘survival’ or ‘sunset’ clause which extends a treaty’s application in relation to existing investments for a further period (either 10, 15 or 20 years) from the date of termination.

The Cambodian government has not made any announcements which would give reason to believe that it will not renew existing treaties.

Practicalities of commencing an investment treaty claim against this country

12. To which governmental entity should notice of a dispute against this country under an investment treaty be sent? Is there a particular person or office to whom a dispute notice against this country should be addressed?

Cambodia

Government entity to which claim notices are sent

Cambodia’s BITs do not stipulate upon whom a dispute notice is to be served.

13. Which government department or departments manage investment treaty arbitrations on behalf of this country?

Cambodia

Government department which manages investment treaty arbitrations

In the one ICSID claim brought thus far against Cambodia (albeit not an investment treaty claim), the Ministry of Industry, Mines and Energy managed the claim on behalf of the government of Cambodia.

14. Are internal or external counsel used, or expected to be used, by the state in investment treaty arbitrations? If external counsel are used, does the state normally go through a formal public procurement process when hiring them?

Cambodia

Internal/external counsel

In the one ICSID claim brought thus far against Cambodia (albeit not an investment treaty claim), external counsel were retained to represent the government of Cambodia.

Practicalities of enforcing an investment treaty claim against this country

15. Has the country signed and ratified the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965)? Please identify any legislation implementing the Washington Convention.

Cambodia

Washington Convention implementing legislation

Cambodia signed the ICSID Convention on 5 November 1993. It deposited the ratification instrument on 20 December 2004. The treaty entered into force in Cambodia on 19 January 2005 with no special reservations.

16. Has the country signed and ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention)? Please identify any legislation implementing the New York Convention.

Cambodia

New York Convention implementing legislation

Cambodia acceded to the New York Convention on 5 January 1960. As implementing legislation, Cambodia has passed the Law on the Recognition and Enforcement of Foreign Arbitral Awards, 2001, the Law on Commercial Arbitration, 2006 and the Code on Civil Procedure, 2007.

17. Does the country have legislation governing non-ICSID investment arbitrations seated within its territory?

Cambodia

Legislation governing non-ICSID arbitrations

The Law on Commercial Arbitration enacted in March 2006 is based on the UNCITRAL Model Law.

18. Does the state have a history of voluntary compliance with adverse investment treaty awards; or have additional proceedings been necessary to enforce these against the state?

Cambodia

Compliance with adverse awards

There have not yet been any claims brought against Cambodia under an investment treaty.

In 2009, a US$300 ICSID claim was brought against Cambodia by Cambodia Power Company (subsidiary of US-based Beacon Hill Associates Inc.) pursuant to a contractual dispute resolution provision (ICSID Case No. ARB/09/18), in a dispute against the government and a state-owned power company (EDC) in relation to a power plant in Phnom Penh. The ICSID tribunal found that it had no jurisdiction over the dispute with EDC and, in its final award rendered on 22 April 2013 dismissed all claims against Cambodia. The Cambodian government actively engaged and defended itself in the arbitration process.

19. Describe the national government’s attitude towards investment treaty arbitration

Cambodia

Attitude of government towards investment treaty arbitration

There have not yet been any claims brought against Cambodia under an investment treaty.

20. To what extent have local courts been supportive and respectful of investment treaty arbitration, including the enforcement of awards?

Cambodia

Attitude of local courts towards investment treaty arbitration

There has not yet been any investment treaty award against Cambodia.

Arbitration is still a relatively new feature of the legal landscape in Cambodia. In the realm of commercial arbitration, Cambodia launched the National Commercial Arbitration Centre (NCAC, formerly the NAC) in March 2013, with a view to boosting local and international investor confidence and the NCAC announced that it was ready to accept its first cases in September 2014. However, it is still too early to assess properly the judicial attitude towards arbitration (whether commercial or investment treaty) in Cambodia.

National legislation protecting inward investments

21. Is there any national legislation that protects inward foreign investment enacted in this country? Describe the content.

Cambodia

National legislation

Substantive protections

Procedural rights

FET

Expropriation

Other

Local courts

Arbitration

1994 Law on Investment of the Kingdom of Cambodia; 2003 Law on the Amendment to the Law on Investment of the Kingdom of Cambodia

No.

Yes.

Article 9 provides that ‘The government shall not undertake a nationalisation policy, which shall adversely affect private properties of investors in the Kingdom of Cambodia.’

Article 8 provides that ‘A foreign investor shall not be treated in any discriminatory way by reason only of the investor being a foreign investor, except in respect of ownership of land, as set forth in the Land Law.’

Yes.

No. Arbitration is only available ‘as agreed by both parties’.

National legislation protecting outgoing foreign investment

22. Does the country have an investment guarantee scheme or offer political risk insurance that protects local investors when investing abroad? If so, what are the qualifying criteria, substantive protections provided and the means by which an investor can invoke the protections?

Cambodia

Relevant guarantee scheme

Qualifying criteria, substantive protections provided and practical considerations

 

Cambodia became a member country of the Multilateral Investment Guarantee Agency (MIGA) on 1 December 1999. MIGA insures cross-border investments made by investors in any MIGA member country into a developing member country.

Awards

23. Please provide a list of any available arbitration awards or cases initiated involving this country’s investment treaties.

Cambodia

None

Reading List

24. Please provide a list of any articles or books that discuss this country’s investment treaties.

Cambodia

Article/Book

Dr. Chester Brown, Commentaries on Selected Model Investment Treatie s (Oxford University Press, 2013)

ASEAN Secretariat, ‘ASEAN Comprehensive Investment Agreement - A Guidebook for Businesses and Investors’ (2013). Available at: www.asean.org/images/2013/news/ACIA/ACIA%20Guidebook2012%20(14.3.13).pdf

Leon E. Trakman and Nicola W. Ranieri, Regionalism in International Investment Law (Oxford University Press, 2013)

Masayuki Nakayama, ‘Features of the Japan-Cambodia Bilateral Investment Treaty and Japan’s Investment Treaties’ (Institute for International Studies and Training, 2007). Available at www.iist.or.jp/wf/magazine/0557/0557_E.html

New Zealand Ministry of Foreign Affairs and Trade, ‘AANZFTA Publicity Booklet’ (2009). Available at: www.asean.fta.govt.nz/assets/AANZFTA-booklet3.pdf

Vivienne Bath and Luke Nottage, ‘The ASEAN Comprehensive Investment Agreement and ‘ASEAN Plus’ – The Australia-New Zealand Free Trade Area (AANZFTA) and the PRC-ASEAN Investment Agreement’ (2013). Available at http://ssrn.com/abstract=2331714

Alex Larkin and Ly Sambo, ‘Recent Developments in Commercial Arbitration in Cambodia’, Asian Dispute Review (January 2015) (LexisNexis)

Kim Rooney and Vicheka Lay, ‘Arbitration in Cambodia’, International Commercial Arbitration in Asia (3rd edn.)

Notes

* With thanks to Kenneth Tay for his valuable assistance.

1 Protected investments are afforded ‘protection’ in the territory of the other Contracting Party, article 3(1).

2 Article 8(2) of the Korea BIT provides that ‘local remedies’ are available to investors.

3 Disputes submitted to national courts cannot be referred to before an arbitral tribunal.

4 Article 6(2) of the Singapore BIT provides that any measure of expropriation may be reviewed by a judicial authority of the Contracting Party taking the measures in the manner prescribed by its laws.

5 While no MFN clause was agreed in the ASEAN-ANZ FTA, the parties to the agreement have undertaken to enter into discussions with a view to agreeing the application of MFN treatment to the treaty. Note that article 4 of chapter 11 requires national treatment of qualifying investments.

6 Date of implementation of the Agreement on Investment of the Framework Agreement on Comprehensive Economic Co-operation between China and ASEAN.

7 The ASEAN-India Trade In Goods (TIG) Agreement was signed on 13 August 2009. As of August 2011, India, Singapore, Malaysia, Thailand, Vietnam, Brunei, Indonesia, Philippines and Myanmar have implemented the Agreement.

8 The Framework Agreement for Comprehensive Economic Partnership (CEP) between ASEAN and Japan was signed on 8 October 2003. Subsequently, the ASEAN Japan Comprehension Economic Partnership (AJCEP) was signed after 11 rounds of negotiation over a period of four years. Ministers of ASEAN Member States and Japan then completed the signing of the AJCEP Agreement on 14 April 2008.

9 See Annex 2 of the ACIA on “Expropriation and Compensation”.

10 The ASEAN-ANZ FTA does not have a General Exception clause but incorporates Art. XIV of the General Agreement on Trade in Services (GATS) and adds provisions regarding national treasures and the creative arts.

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