Myanmar accedes to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards

The ratification took place on 16 April and is tabled to come into effect on 15 July 2013.

This is a significant decision for the former pariah state, as it means that arbitration awards made in Myanmar may soon be enforceable in any of the 148 countries which are signatories to the Convention. Equally, the accession will facilitate the enforceability in Myanmar of awards made outside the country, from any of the member states.*

The decision was propelled by the country’s desire to stimulate foreign investment, and has been largely applauded by the international community. It is likely that foreign entities investing in the country also known as Burma will look to cities which have neutral arbitration centres, like Hong Kong and Singapore to resolve disputes and enforce awards. And as a consequence, it is thought that confidence in Myanmar’s legal landscape will grow, and it will be perceived as a jurisdiction in which disputes can be dealt with expediently and fairly.

Despite a move in the right direction, certain impediments to its enforceability in practice remain however: the main hindrance being the implementation of the Convention into domestic legislation. Skeptics believe that there may be a significant derogation from the fundamental provisions of the Convention which specifically relate to the grounds for enforceability and recognition. If exceptions to the enforceability of the Convention are made, this will create reservations as to reciprocity and will impact upon the spirit of the Convention, as originally intended.

* On the heels of the accession, is the recent announcement made by the European Council that many of the sanctions imposed upon Myanmar have now been lifted. The relaxation of certain restrictive measures on 22 April, which were in place previously, signals a recognition of the progress being made in Myanmar and the increasing opening up of the market there.