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AUSTRALIA | CAMBODIA | INDONESIA | LAOS | MALAYSIA | MYANMAR | SINGAPORE | THAILAND | VIETNAM. Managing Risk (Cambodia) Structuring and Disputes Matthew Rendall SokSiphana&associates (a member of ZICOlaw ) 19 February 2014.

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Managing Risk (Cambodia)

Structuring and Disputes

Matthew RendallSokSiphana&associates(a member of ZICOlaw)

19 February 2014

AUSTRALIA | CAMBODIA | INDONESIA | MALAYSIA | MYANMAR | SINGAPORE | THAILAND | VIETNAM

acquisition structuring to lessen risk
Acquisition structuring to lessen risk
  • Establishing a Co.
    • 100% foreign ownership is permitted
  • Target Co
    • DD very important but somewhat difficult due to current practices of government institutions
    • So, wherever possible establish a New Co
  • QIP Co.
    • Projects registered with CDC for investment privileges.
    • Incoming buyer is made liable for all past and present obligations of the outgoing owners
      • Transfer project rather than buy the company.
continued
..continued
  • JV Partner Co.
    • Not required by law (except with regard to land ownership)
      • if land is required either
        • Long term lease
        • Land holding company (with different class shares and forward lease to separate 100% owned operating company)
        • Use of nominees
    • No advantage at law
      • Where local knowledge is required then hire rather than JV
dispute resolution
Dispute Resolution

Three venues

  • Courts
    • Poor capacity of judges
      • Lack of training/understanding of complex issues
    • Corruption issues
      • Political
      • Financial
  • National Arbitration Center
    • Not yet established
    • Lack of foreign arbitrators
    • Arbitrators all inexperienced.
  • LaborArbitrationcouncil
    • Only labor disputes
foreign arbitration
Foreign Arbitration
  • Permitted under Cambodian law
    • Signatory to the New York Convention
    • Recognized under Cambodian Civil Code
    • Preferred choice of foreign investors
    • Although Government tends not to allow foreign dispute resolution clauses in its contracts / licenses
  • Enforcement
    • Requires Cambodian court
    • Largely untested
      • Limited experience indicates that courts may revisit issues
      • not unconditionally issue enforcement orders
      • refuse to recognize foreign arbitration clause in contracts
      • Caltex case
most importantly don t avoid the rules
Most importantly…don‘t avoid the rules..
  • Despite conventional wisdom Cambodia is a country of laws
  • Laws will be enforced against foreign investors
  • Avoid following advice of local agents/consultants who suggest to 'cut corners’ or ignore certain requirements (on the basis that local investors do so or certain laws are not implemented)
  • This is the PRIMARY reason for investments failing or running into problems
contact details
Contact Details

Matthew Rendall

Partner

Tel : +855 23 999 878

Email : matthew.rendall@zicolaw.com

SokSiphana&associates

a member of ZICOlaw

No 45 Street 355z

First Floor

SangkatBoeungKak 1

Khan TuolKork

Phnom Penh

12151 Kingdom of Cambodia.

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www.zicolaw.com

AUSTRALIA | CAMBODIA | INDONEIA | LAOS | MALAYSIA | MYANMAR |SINGAPORE | THAILAND | VIETNAM