Myanmar votes to join New York Convention countries, but implementation unclear says expert

State-run media reported that the country agreed to accede to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 6 March 2013, according to the Myanmar Times. Once in force, arbitral awards made in the country will be enforceable in all 148 countries that are signatories to the Convention, while awards made in signatory countries will be enforceable in Myanmar.

Arbitration expert Nicholas Brown of Pinsent Masons, the law firm behind Out-Law.com, said that the move was "dramatic and to be encouraged". However, he warned that the impact of the announcement for foreign arbitral bodies remained uncertain as it was not yet clear how Myanmar would implement the provisions of the Convention into domestic legislation.

"There are at least three knowable qualifications to any foreign rejoicing," he said. "First, the details and timescale for implementing these plans remain unclear, particularly in respect of any reservations that Myanmar may wish to make, such as the reciprocity and commerciality reservations. Second, following accession, the Convention's provisions will need to be implemented through domestic legislation. As we have seen in other parts of the Mekong, the process inevitably attracts a risk of adverse departures from the key terms of Articles III [recognition and enforcement of awards] and V [grounds on which recognition and enforcement may be refused]."

"Third, there are real question marks over the ability of the Myanmese judiciary to apply the principles of the New York Convention in line with a pro-arbitration spirit, particularly if the state, or state-run parties, are involved. This is more pronounced given the present uncertainty surrounding the reservations to accession. All that said, like for so much of the landscape in Myanmar, any progress is dramatic and to be encouraged," Brown said.

According to the Myanmar Times, Aung San Suu Kyi and other MPs pushed through the signing of the Convention by the Myanmar Parliament, stating that it was a "prerequisite" to attracting foreign investment to the country. Myanmar passed a new Foreign Investment Law in November 2012; however the Myanmar Times said that foreign companies had so far been "reluctant" to invest in the country because of its lack of dispute resolution mechanisms.

"To make the economy a success, it all depends on trust," said Suu Kyi during the parliamentary session. "No matter what legislation is enacted and no matter what agreement is signed, no potential investor would make an investment unless they have confidence in [the political] landscape of the country."

The New York Convention dates back to 1958. It is open for signature by any member state of the United Nations, any other state which is a member of any specialised agency of the United Nations or a state that it a party to the Statute of the International Court of Justice.

The aim of the Convention is to prevent signatories from discriminating against foreign and non-domestic arbitral awards. Parties to the Convention must ensure that foreign awards are recognised and generally capable of enforcement in their jurisdiction in the same way as domestic awards. At the same time, courts located within the jurisdiction of parties to the Convention are prevented from hearing cases if the parties in dispute are bound under contract to refer the matter to an arbitral tribunal.