6 April, 2013


Legal News & Analysis – Asia Pacific – Myanmar


On 6 March 2013, Myanmar’s parliament approved plans to sign the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the Convention). This is one of many economic and political reforms Myanmar is pursuing to encourage foreign investment into Myanmar.


Myanmar is a signatory to the Geneva Protocol on Arbitration Clauses 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards 1927. These are of limited use to foreign investors as there are fewer than 35 signatory countries and they only recognise the enforcement of arbitration awards made in a “reciprocating territory”. There are only 15 countries recognised by Myanmar as reciprocating territories, including England and France, but not Singapore or Hong Kong. When one also considers the difficulties in dealing with the courts in Myanmar, it is not surprising that, to the best of our knowledge, there has been no modern experience of a foreign arbitration award being enforced in Myanmar.


Signing and ratifying the Convention would mean that arbitral awards made in Myanmar would be enforceable in the 148 countries that are already party to the New York Convention, and more importantly, would mean that awards passed in all signatory countries would (theoretically) be enforceable in Myanmar. Acceding to the Convention would therefore be a welcome step forward and provide comfort to foreign investors.


However, there are several hurdles to be crossed before foreign investors can truly celebrate. First, the statement of intent made by Myanmar’s parliament contained no strict deadlines or timeframes within which they would seek to accede to the Convention. A proposal to accede to the Convention was first approved in Parliament almost exactly one year earlier, on 8 March 2012. Second, Myanmar may choose to sign up to the Convention with certain reservations, such as on reciprocity, thereby again potentially limiting the number of countries which would be reciprocal nations for the purposes of enforcement. Third, subsequent to signing the Convention, Myanmar’s parliament would need to ensure that the provisions of the Convention are implemented in domestic legislation – which could take a while and would depend on the efficacy of statutory drafting. Finally, while accession to the Convention would boost investor confidence, it is also equally if not more important to educate and train the local judiciary to ensure that the Convention and the implementing law are applied as per international practice. As noted by Aun San Suu Kyi, in her speech at the World Economic Forum in Bangkok in June last year, the best laws “would be of no use whatsoever if there are no courts that are clean enough and independent enough to be able to administer those laws justly“.


Nonetheless, it cannot be denied that this is a positive step forward for Myanmar and is hugely encouraging for foreign investors. The international reaction has been uniformly supportive.


For further information, please contact:

Peter Godwin, Managing Partner, Herbert Smith Freehills
Paula Hodges, Partner, Herbert Smith Freehills

[email protected]


Charles Kaplan, Partner, Herbert Smith Freehills

[email protected]





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