Burmese parliamentarians have given support to a government plan to sign a key international arbitration agreement that could help settle international business disputes arising in the country, several MPs said on Wednesday. They said joining the agreement would boost foreign investment in Burma.
Last week, President Thein Sein asked Parliament to approve of the government’s plan to apply for membership of the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the 1958 New York Convention.
Kyi Myint, an independent Lower House member, said that during a parliamentary session on Tuesday both ruling party and opposition MPs voiced their support for the plan.
The UN convention requires courts in member states to recognize and enforce international arbitration that private parties have agreed to use in case of disputes.
International arbitration is an important dispute resolution mechanism in the international business world, as it allows companies from different countries to resolve disputes without the formalities of their respective legal systems.
Until now, Burma’s courts do not recognize or enforce decisions reached through international arbitration.
Kyi Myint said joining the UN convention was the next essential step in attracting foreign business, after Parliament approved the Foreign Direct Investment Law in November. He said the treaty would allow both local and foreign businesses to seek international arbitration in case of disputes.
“Foreign investment flowed in after we enacted the FDI Law and after the sanctions were eased,” he said. “Being a [convention] member country will also provide opportunities for the foreign investors to sue their partner at the international arbitration court if there are disputes.”
Kyi Myint said Burmese businessmen had thus far suffered from a lack of access to international arbitration, adding, “Many examples happened in the past. Burmese businessmen may win a trade dispute at the [local] court, but there was no guarantee for receiving compensation.”
Seven parliamentarians from Burma’s main opposition party, the National League for Democracy (NLD), also voiced their support to the government’s plan.
NLD chairperson Aung San Suu Kyi however, reminded Parliament and government that foreign investment would not come because of legislation alone—Burma will also have to convince outsiders that its political situation is stable.
“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,” said Suu Kyi.
The NLD leader also urged the government to strengthen Burma’s legal system and raise its standards, adding that legislators and legal experts should study the process of international arbitration so that it could be enforced in the country.
After decades of military rule and isolation, the so-called New York convention is just one of many laws and international treaties that the government will have to adopt in order to bring Burma in line with international legal standards required for foreign business.
Deputy Minister of National Planning and Economic Development Set Aung told Parliament that Burma needed more laws and policies in the field of trade, foreign investment and labor before its economy can flourish.
Some MPs said Burma should also began drafting laws regarding copyright right and intellectual property rates—all of which are not in place now.