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Consequences of Non-binding Award by the Arbitration Council 

CLEC - 2010-10-28

The Cambodian Labor law sets out two types of labor dispute resolution mechanism. They are individual and collective dispute. Those who are in individual disputes might first lodge their complaint at labor dispute office or department seeking reconciliation, and then directly lodge their complaint at court. Those who are in collective dispute shall lodge their complaint at provincial office or department of labor dispute or at labor inspector. Then a conciliator can be appointed by the Minister in charge of labor after receiving a complaint/being aware of this collective dispute.

In case the reconciliation failed, the collective dispute shall refer to the Arbitration Council who shall deal with it according to procedures set out in labor law by holding a hearing and making decision which known as Award (Binding or Non-binding Award) which is very often chosen by the disputed party. The Binding Award shall be executed immediately by both parties. The Non-binding Award has no immediate execution.

What shall the party act toward the Non-binding Award?

Article 313, paragraph 2 of labor law says that ... The party has the right to appeal this arbitral decision by informing the Minister [in charge of labor] by registered mail or by any other reliable method within eight calendar days from the date of receiving the notification.

The proclamation (Prakas) Number 099/04, dated 21 April 2004, Article 40 says: each party can reject the Arbitral Award issued by the Arbitration Council within eight calendar days after they receive the Award. If one of the parties has filed their complaint within the days, the Award cannot be executed. In this case, if it is a right dispute concerning enforcement of law or regulation... the disputed party might lodge a complaint on this case at jurisdiction court for final resolution.

Basing on the above provision, the party who has already rejected in written the Non-binding Award has the rights to file their complaint to the court seeking final resolution on dispute or the demand in the Non-binding Award. This is only for right dispute concerning enforcement of law or regulation (for example labor law, collective bargaining agreement, or Arbitral Award which come into force in proportional to the collective bargaining agreement) except interest dispute.

Besides, both the dispute over the rights and dispute of interest, the party might take other actions in forcing the other party to follow or to make solution for their demand, for example by strike or lock-out in according to the legal processes.

We observe that most of the decision made by the Arbitration Council is the Non-binding Award which is often chosen by the party. Then the party has an objection which causes the party to have no obligation in following the decision even though their act does not properly comply with the legal provision and the Arbitration Council order the party to follow the law.

Article 314, paragraph 1 of the labor law says: ... the final arbitral decision, if not appealed by either party, shall be implemented immediately.

Article 46 of the Proclamation (Prakas) Number 099/04 says: if the allowed time for rejection is over and one of the parties refuses to follow the arbitral decision, the other party might ask the jurisdiction court to recognize and implement the award.

Article 47 of the Proclamation Number 099/04 says: one party might ignore the recognition and enforcement of the final and binding award in which case the party shall provide the court with evidence that the Arbitration Council's Award is not right, because:

  1. The disputed party did not properly participate in choosing an arbitrator,
  2. There is no compliance with the procedures set out in the labor law, and
  3. The Arbitration Council issued an award, which is beyond their authority being allowed for them by the labor law.

Article 353 of the Procedure of Civil Code: execution of arbitration awards

The procedure of civil code provides the party the right to file complaint to the jurisdiction court asking for an execution of the arbitration council's final award which is rejected by the party. On the contrary, regarding the Non-compliance award, the disputed party cannot ask for an execution or force other party to execute the award by filing their complaint to the court asking them to issue a verdict of recognition or support or execute the final non-binding award. This is against laws and regulations and the rights of other party.

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