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Myanmar: The Road to the New York Convention

In truth, a trip to Myanmar is time travel.

The streets of Yangon are essentially the same as when Britain hauled down the Union Jack at the astrologically chosen time of 4:20 am on 4 January 1948.  Fine old colonial buildings stand side by side next to enormous banyan trees standing as silent sentinels of the British interlude in the Ayeyarwady delta.  Electricity sockets and door locks in the hotels are all of the same vintage as Clement Atlee, petrol rationing, and the NHS.

And so are Myanmar’s laws on international arbitration.

Myanmar never acceded to the New York Convention during its turbulent post-independence era.  Instead, its common law system remains resplendent in fabulous arcana like the Contract Act of 1872 and the Geneva Convention of 1927, the predecessor of the New York Convention. 

The Geneva Convention provides for an unsatisfactory and clumsy process for the enforcement of arbitral awards among the handful of countries where it is still applicable.  It is thought that Myanmar’s courts would first require judicial confirmation of an award in the originating country before following this up with their own review of the award in a process that reflects a by-gone era uneasy with alternative dispute resolution forums.

To add to the uncertainty, publicly available sources suggest that Myanmar courts have never enforced a foreign arbitral award.

Myanmar has embarked upon the path of modernization of its laws, but it will take a long time.  In March, the Union Assembly of Myanmar approved a resolution in support of the country’s accession to the New York Convention.  This has been under discussion for more than a year and no deadline is set for an accession date.

In the meantime, how should pioneering businesses tackle the question of dispute resolution?  The answer is essentially a choice of the “least bad” option. 

Where a foreign contract party enjoys leverage, it is possible to insist upon a foreign governing law provision along with arbitration outside Myanmar in accordance with for example, UNCITRAL or ICC rules.  This does not solve the problem of enforcement in Myanmar if the foreign contract party prevails, but at least it provides a chance to obtain a well-considered decision from international arbitrators free from political bias.
Lawyers-as-frontiersmen may also wish to consider “creatively-drafted” arbitration clauses where the parties agree in the alternative to submit disputes to an arbitral forum in a New York Convention country after Myanmar’s accession. While it is unknown if Myanmar courts will enforce such terms, they will give a foreign party a basis to seek a modern forum to resolve its disputes. 

Only time will tell, and hopefully Myanmar will catch up with lost time.

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