Cambodian Legal System PDF

# Law and its Sources Under Cambodian jurisdiction, law, in its generic sense, is a body of rules of action or conduct prescribed by controlling authorities, and having binding legal force. Law is in theory made up of four elements: - Formal legislation, including the Constitution, laws, and treat...

# Law and its Sources Under Cambodian jurisdiction, law, in its generic sense, is a body of rules of action or conduct prescribed by controlling authorities, and having binding legal force. Law is in theory made up of four elements: - Formal legislation, including the Constitution, laws, and treaties/conventions; - Rules of law announced by the courts in deciding cases (precedents set by high courts); - Customary practice well established in certain industry; and - Legal concepts (doctrine) which forms the basis of judicial interpretation and action. The study of law essentially concerns "rules of law." A rule of law is a statement that if certain facts exist, the courts will take action or refuse to take action at the request of someone involved. Facts create legal issues that are resolved by using rules of law. ## Overview of the Cambodian Legal System The current legal system of Cambodia is based on the 1993 Constitution (with numerous subsequent amendments) which adopted a free market economy model and a version of liberal democracy in which the King does not hold powers and basically holds ceremonial roles as the Head of State. Although Parliament consists of two houses-- the National Assembly and the Senate--it is the National Assembly that elects and dismisses the Prime Minister. Historically, Cambodia was under French colonial rules for almost a century beginning in 1863 when France became the Protectorate. A strong version of colonization started in 1884 and continued until late 1953 when the French colonization officially ended. Obviously, during those years, France would have introduced various regulations to modernize the state machinery. French influences are still present in many fundamental laws today. For instance, the 2007 Criminal Procedure Code and the 2009 Criminal Code were drafted with the assistance of French legal experts. Much earlier, the draft of the 1997 Labour Law was fully written in French language. Cambodia has been receiving legal assistance from many countries over the years. The 2006 Civil Procedure Code and the 2007 Civil Code were drafted by Japanese legal experts. Immediately after Cambodia had become a member to the World Trade Organization (WTO) in 2004, legal experts versed in American legal tradition hurriedly helped to finalize the 2005 Law on Commercial Enterprises. The current Rules applicable to the proceedings used at the Cambodian National Commercial Arbitration Center are a perfect representation of those used by the Singapore International Arbitration Centre. Thus, in a nutshell, the Cambodian legal system includes elements from the Civil Law tradition (where most legal rules are codified in advance) and the Common Law tradition (where judges can make many legal rules out of cases). ### Legal System in Transition Cambodia's legal system and legal institutions currently present a somewhat complex labyrinth. However, the situation has become less confusing following the accession of Cambodia to the World Trade Organization (WTO) and the passing of several key commercial laws. Cambodia's ongoing transformation into a democratic and capitalist free market system has resulted in many new laws and regulations being passed, new policies being implemented, and the modification of the judicial institutions. ## 1993 - Present: Constitutional Monarchy The Kingdom of Cambodia and the Royal Government of Cambodia came into being in 1993 in the form of a constitutional monarchy. The constitution, adopted on September 21, 1993 as the supreme law of the land, establishes a judiciary separate and independent from the executive and legislative branches of government. The executive branch, called the Royal Government of Cambodia, is comprised of a prime minister, the Council of Ministers, the ministries, provincial and municipal authorities, and various other government agencies. The legislative branch is comprised of a National Assembly and a Senate (created under 1999 amendments to the constitution). The judicial branch is composed of municipal and provincial courts, Courts of Appeal (three new Courts of Appeal have recently been established, in TbaungKhmum, Battambang and Sihanouk Ville, thereby bringing the total number of Courts ## Current Status of Legal Reform and Future Trends With the impetus of WTO accession, the government has been steadily preparing and submitting to the National Assembly various laws that have been transforming Cambodia's legislative and regulatory infrastructure. The new laws and regulations combine aspects of the pre-1975 French Civil Code system with legal principles from common law systems. Cambodia is particularly interested in ensuring that its legal system integrates successfully with those of the other members of the Association of Southeast Asian Nations (ASEAN). The current National Assembly has adopted over 550 laws (amendment laws included) since it was formed in 1993. Some significant examples include the Law on Commercial Enterprises (equivalent to a "companies law" or "corporations law" in other jurisdictions), as well as the Law on Negotiable Instruments and Payment Transactions, the Secured Transactions Law, the Civil Code, the Customs Law, the Law on Standards, the Insolvency Law, the Anti-Corruption Law, and the Law on Anti-Money Laundering and Combating the Financing of Terrorism. Other important laws have also been enacted recently, such as the Foreign Ownership Law, Expropriation Law, Financial Leasing Law, Trust Law, E-Commerce Law, Consumer Protection Law and Social Security Law. Further laws are expected soon, including the Notary Public Law and the new Commercial Contract Law, as well as many other laws touching on nearly all aspects of business activity, which are being drafted by various ministries with the technical assistance of several donor countries. The Law on Competition was adopted in 2021 and its enforcement mechanism is being put in place. ## Legal Hierarchy In the current legal system of Cambodia, the hierarchy of laws and regulations may be understood as shown in Table (below): **Table of Hierarchy of Legal Norms in Cambodia** 1. **The Constitution:** The Supreme Law of the Kingdom of Cambodia. 2. **Treaties and Conventions:** According to Article 26 of the Constitution, the King shall sign and ratify international treaties, both multilateral and bilateral, and conventions, following the approval of the National Assembly and Senate. After such ratification, international treaties and conventions shall become laws and may be used as the basis for judicial decisions. 3. **Laws (Chhbab):** Laws are adopted by the National Assembly and the Senate. The King then signs Preah Reach Kram to promulgate an enacted law. 4. **Royal Decree (Preah Reach Kret):** To be issued under the name of the King for executing his constitutional powers. Since the King does not govern (Constitution, Art.7), most Royal Decrees are indeed formulated by the Executive. 5. **Sub-Decree (Anu-Kret):** To be signed by the Prime Minister after adoption by the Council of Ministers. In case the sub-decree has not been adopted by the Council of Ministers (such cases are rare), countersignature by the Minister(s) in charge shall be required. The so-called Executive Power is most evidently expressed in Sub-Decrees (Anu-Kret). The Prime Minister also exercises his power via Decisions and Circulars ('circular' is to provide clarity on certain measures or give relevant instructions). 6. **Ministerial Order (Prakas):** To be issued by members of the government in exercising their own regulatory powers. Ministers also exercise their powers via Decisions and Circulars. 7. **Deika or Decisions:** At province and district levels, both Deika (normative) and Decisions (executive) are issued (Law in 2008). At commune level, Deika is used. Of all the three local levels, only communes are decentralized in the sense of 'local government' (Law in 2001) as understood in the west. ## Legislative Process The process of legislation-making at the National Assembly is shown in the flow chart below. After the adoption by the National Assembly, the Senate reviews the bill, if approved, followed by the Royal Kram of the King to promulgate the bill into Law. Often, a preliminary review of proposed law is undertaken by the Private Sector Working Group, the Judicial Council and the Economic, Social and Cultural Council before the draft law is sent to Council of Ministers (Cabinet) for examination.  ## Types of Law (or Classifications of Law) The overall body of laws can be overwhelming. To study it, one must break it down by classification. No single classification system can cover such as large mass of information; consequently, those systems that have been devised tend to overlap. Moreover, they are, of necessary, arbitrary in some aspects. A discussion of the best-known systems follows. ### Public Law and Private Law (a) **Public law** includes, to cite a few, constitutional law, administrative law, and criminal law. In public law the interests of society are represented by the state/government. (b) **Private law** involves those legal relationships which exist between private parties. Private law is divided into the law of contracts, the law of torts, the law of property, family law...etc. ### Substantive Law and Procedural Law (a) **Substantive law** includes all laws that define, describe, regulate, and create legal rights and obligations. For example, a rule stating that promises are enforced only when each party has received something of value from the other party is part of substantive law. So, too, is a rule stating that a person who has injured another through negligence must pay damages. (b) **Procedural law** deals with the means by which substantive law is made and administrated, notably procedural law establishes the methods of enforcing the rights established by substantive law. Questions about how a lawsuit should begin, what papers need to be filed, which court will hear the suit, which witnesses can be called, and so on are all questions of procedural law. Rules involving the process of conducting trials, appeals, and enforcement of judgments are examples of procedural law. For instances, recent adoptions of civil procedure code and criminal procedure code, Law on the Organization of the Courts, Law on the Statute of Judges and Prosecutors and Law on Organization and Functioning of the Supreme Council of the Magistracy are examples of procedural laws. **Illustration** In brief, substantive law tells us our rights; procedural law tells us how to exercise them. ## Civil Code and Criminal Code **Civil Code** (enacted in 2007, became effective in late 2011) is concerned with the duties that exist between persons or between citizens and their governments, excluding the duty not to commit crimes. Contract law, for example, is part of the civil code. **Criminal Code**, in contrast to civil code, is concerned with wrongs committed against the public as a whole. Criminal acts are prohibited by state/government. **Illustration** The term Civil Law, does not refer to civil as opposed to criminal law, but to a codified set of laws - an ordered grouping of legal principles enacted into law by a legislature. In a Civil Law tradition system, the statutory code is the primary sources of law, and case precedents are not automatically judicially binding as they are in a common law tradition system. This is not to say that precedents are unimportant in a civil law system. On the contrary, judges in such systems commonly refer to previous decisions as sources of legal guidance. The difference is that judges in a civil law system are not bound by precedent, the doctrine of stare decisis (Latin means "to stand on decided cases") does not apply. Note that the recent Law on Court Organization in 2014 in Cambodia makes interpretations by Supreme Court settling disputes over competence and legal interpretations binding upon all chambers of the Supreme Court and all other courts (Art 63), thereby potentially leading gradually toward the doctrine of stare decisis to some extent. **Illustration** In brief, Criminal law is always public law, whereas, civil law is sometimes public and sometimes private. In criminal case, the government seeks to impose a penalty on an allegedly guilty person. In a civil case, one party (sometimes the government) tries to make the other party comply with a duty or pay the damage caused by failure to so comply. ## The System of Courts The current Law on Court Organization was enacted in 2014. At present, the Cambodian judiciary consists of one Supreme Court, four Court of Appeals, twenty-five Provincial/Municipal Courts, notably a number of courts of first instance located in each province and municipality, and the Military Court as well as the specially created hybrid court which is known as the Extraordinary Chambers in the Courts of Cambodia (ECCC). ### Court of Appeals and the Supreme Court The Court of Appeal reviews both questions/matters of law (Ang Chbab) and fact (Ang Het), while the Supreme Court only hears questions/matters of law (Ang Chbab), with some exceptions in the case of a joint trial of the second grievance complaint the Supreme Court may render a final decision on both law and facts. As of June 2022, there are 4 Courts of Appeals (Phnom Penh, Battambang, Sihanouk Ville, and TbaungKhmum). ### Phnom Penh Municipal Court of First Instance The Phnom Penh Municipal Court of First Instance is the court most frequently used by commercial litigants. This court is generally regarded as being overburdened, and at times suffers from a lack of clerks, prosecutors, and magistrates with substantial knowledge and experience in adjudicating commercial matters. Other courts are similarly overburdened and understaffed. The lower courts preside over all types of legal matters, including civil, criminal, insolvency, and commercial disputes. A dissatisfied litigant may appeal a municipal court's decision to the Court of Appeals, which will review both questions of law and fact. A final appeal may be taken to the Supreme Court, but generally only on questions of law. The Supreme Court will review questions of both law and fact only in exceptional and rare circumstances. Such a rare circumstance may occur when the Supreme Court sends a case back to the Court of Appeals for further action, and the ensuing decision of the Court of Appeals is subsequently re-appealed to the Supreme Court. A significant development that has provided much greater certainty as to civil proceedings in the courts of Cambodia was the adoption of the Code of Civil Procedures on July 6, 2006. Among other things, the Code of Civil Procedures contains provisions for the recovery of certain legal costs incurred during litigation, and provides greater certainty on the rules of evidence including specific provisions relating to oral and documentary evidence, expert evidence, and the discovery of evidence prior to trial. Significantly, the Code of Civil Procedures also provides for legal recognition of sales in execution, enabling successful litigants to proceed against the assets of another party in settlement of the disputed claim. Furthermore, rules relating to appeals are more specifically addressed. The Code of Civil Procedures provides for appeals from judgments of the court of first instance (uttor appeal), appeals from decisions of a court of appeals (satuk appeal), and appeals from court rulings (chomtoah appeal). Court rulings are distinguished from judgments in that they are made by courts without reference to oral argument. The Code of Civil Procedures remains a relatively new body of legislation and the courts have yet to fully implement and interpret all of its provisions. Nonetheless, it represents a significant step forward in the development of Cambodia's civil litigation procedures. ### The Military Court The Military Court has jurisdiction only over military offenses. Military offenses are those involving military personnel, whether enlisted or conscripted, and which concern discipline within the armed forces or harm to military property. All ordinary offenses committed by military personnel are tried in ordinary courts (provincial/municipal courts). ### The Commercial Court and Labor Court The Commercial Court and Labor Court have not yet been established as separate bodies. However, at each court of first instance, the 2014 Law provides that there are specialized chambers in criminal, civil, labor and commercial matters. ### The Constitutional Council and Supreme Council of the Magistracy In addition to these courts, there is a Constitutional Council (CC), which is not part of the judiciary, established to decide on the constitutionality of laws and regulations. The CC was established in April 1998 under the Law on the Organization and Functioning of the Constitutional Council. The main responsibilities of the CC are to ensure respect for the constitution, interpret the constitution, determine whether laws and regulations comply with the constitution, review judicial rulings dealing with constitutional issues, and rule on specific election-related disputes. The CC has a duty to safeguard respect for the Constitution, interpret the Constitution and laws adopted by the National Assembly (and reviewed completely by the Senate), and has the right to receive and decide on disputes concerning the election of members of the National Assembly and election of members of the Senate. There is also a Supreme Council of the Magistracy, which was established in December 1994 under the Law on the Organization and Functioning of the Supreme Council of the Magistracy. This body is established to help guarantee the independence of the judiciary, to discipline bad judges, and to ensure the proper functioning of the court system. The Supreme Council of the Magistracy has a duty to decide and make proposals to the King on the appointment, transfer, leave of absence, delineation of duties, promotion and dismissal of judges and prosecutors at all courts and takes disciplinary action against delinquent judges. Despite having different responsibilities, Cambodian judges and public prosecutors are both categorized as Chaokrom (magistrates). Chaokrom in its general sense is a title in the Cambodian judicial system that refers not only to judges who sit at trial but also to those who hold the position of public prosecutors. A judge involved in a trial or investigation is called Chaokrom Angkuy (sitting judge). A judge holding a position in the prosecutor department (Ayakar) is called Chaokrom Chhor (standing judge). **Exam Guide** - The municipal and provincial courts hear all types of matter, civil, criminal, insolvency, etc. - The Phnom Penh Municipal Court of First Instance is the most frequently used court for hearing commercial disputes. ## Mediation and Commercial Arbitration in Cambodia Historically, the courts were the only judicial, or quasi-judicial, means available in Cambodia for the resolution of commercial disputes. Certain ministries will act as a mediator on a case-by-case basis, but such mediation lacks judicial, and therefore execution, authority, and becomes binding only if accepted contractually by the disputing parties. Even when a ministry has the legal authority to mediate a dispute - such as the Ministry of Labor and Vocational Training (MLVT) in individual employment disputes, or the Ministry of Land Management, Urban Planning, and Construction (MLMUPC) through different cadastral commissions in relation to unregistered land disputes a party dissatisfied with the result may bring the matter to court. Please refer to Chapter 11 - Dispute Resolution and Insolvency, for a thorough discussion on resolution of commercial disputes in Cambodia. ## Foreign Arbitration Cambodia is a signatory to the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention"). Under the New York Convention, generally, arbitral awards properly issued by reputable arbitral tribunals in jurisdictions which are also parties to the New York Convention, can be enforced in Cambodia. Prior to 2014, however, there had not been a successful attempt to enforce a foreign arbitral award in Cambodia. In 2014, the Supreme Court of Cambodia confirmed a decision of the Cambodian Court of Appeal which ruled in favor of recognition and enforcement of an arbitral award issued by the Korean Commercial Arbitration Board ("KCAB") of Seoul, South Korea, marking the first successful attempt to enforce a foreign arbitral award in Cambodia. ## Investor-State Arbitration under the ASEAN Comprehensive Investment Agreement Globally, under investment law, arbitration is often considered the primary option for foreign investors wishing to pursue claims against a host State. Provisions on investor-State dispute settlement mechanisms are incorporated within most international investment treaties and bilateral investment agreements. The ASEAN member states have adopted the ASEAN Comprehensive Investment Agreement (ACIA) as part of the region's ASEAN Economic Community (AEC), having a goal to transform ASEAN into a single market, highly competitive economic region and achieve regional economic integration by 2015. The ACIA offers a range of protections for entitled investments which are ensured by a number of obligations imposed on member states. These include the obligation to provide fair and equitable treatment, national and most-favored nation treatment, as well as full protection and security and the obligation to offer protection from expropriation. In order to benefit from the protections set out in the ACIA, an investment must be a "Covered Investment" as defined in Article 4 (a) of the ACIA. Specifically, a Covered Investment is an investment made by an investor of one member state in the territory of another member state which have been admitted to its laws, regulations, and national policies, and where applicable, specifically approved in writing by the competent authority of the member state. To qualify as a "Covered Investment", the investment must fall under the definition provided in Article 4 (c) of the ACIA which states: "every kind of asset, owned or controlled by an investor", including but not limited to: movable and immovable property, shares, stocks, intellectual property rights, claims of money, etc. ACIA benefits apply to investors from member states, including both natural and juridical persons, and extends its protection to investors from outside ASEAN who set up a juridical entity in any of the member states, provided, however, that such entity must carry out substantial business activities in the ASEAN member state. A juridical entity which is established in a member state, but does not carry out substantial business activities in that member state, can be denied the protections of the ACIA in the event that such juridical entity invests in another member state (Article 19 of the ACIA). Benefits of the ACIA can also be denied if the investor is a juridical person of a member state but is controlled by an investor of a non-member state. According to Article 19 (3) of the ACIA,"a juridical person is "controlled" by an investor if the investor has the power to name a majority of its directors or otherwise to legally direct its actions." These measures exist to deter the use of mere shell companies and to deter "Treaty Shopping" which consists of the use of a treaty contrary to its object or purpose. The ACIA requires parties to an investment dispute to try to resolve the dispute by consultation and negotiation, prior to initiating a claim whether under local courts or arbitration. If the dispute has not been resolved within 180 days of the receipt by the member state of a request for consultations, the investor may submit their claim under host state courts or under arbitration. Under the ACIA, an investor may submit a dispute against a member state to the International Center for Settlement of Investment Disputes Convention (ICSID Convention), or in accordance with the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, or with the Regional Center for Arbitration at Kuala Lumpur, or to any other arbitration institutions agreed to by the parties.