Recognition and Enforcement of Foreign Judgments in Asia

Recognition and Enforcement of Foreign Judgments in Cambodia (ព្រះរាជាណាចក្រកម្ពុជា)

Last updated: 1 December 2017

Reporter and translator: Youdy Bun, Partner, Bun & Associates (ប៊ុន និង​សហការី)

 

Recognition and Enforcement of Foreign Judgments in Cambodia
   This report was first published by Mr Youdy BUN published in Recognition and Enforcement of Foreign Judgments in Asia (Adeline Chong ed, 2017, Asian Business Law Institute) at pp.37–48.

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A. INTRODUCTION

Cambodia is a civil law country which has seen many recent developments in its legal framework and dispute resolution mechanisms. The Civil Code of Cambodia entered into force in December 2011. Cambodia’s Civil Procedure Code is slightly older, having been adopted in 2006. Together, the Civil Code and Civil Procedure Code set out the basic legal framework in Cambodia for civil disputes and the procedures to bring them before the Cambodian courts.

Along with these laws, Cambodia’s judicial system is still in the development phase. In 2015, a new batch of judges and prosecutors were sworn in to increase the capacity of the courts and allow for the creation of more specialised courts, such as courts for commercial matters, and for regional appellate courts, as currently there is only one appellate court located in the capital, Phnom Penh.

Cambodia’s first treaty related to the enforcement and recognition of foreign judicial awards was entered into in 2013 with Vietnam.1 This bilateral treaty created the necessary guarantee of reciprocity between Cambodia and Vietnam required under Cambodian law in order for Cambodian courts to consider enforcing judgments from Vietnamese courts.

It is in this context of recent legal developments and the addition of new judges to the Cambodian judiciary that Cambodia is to deal with any attempt by a party seeking recognition and enforcement of a foreign judgment related to a civil or commercial matter in Cambodia. In the coming years, we expect to see further developments in this area and to gain a better understanding of how Cambodian courts will deal with attempts to have foreign judgments related to civil and commercial matters recognised and enforced in Cambodia.

B. THRESHOLD REQUIREMENTS FOR RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS IN CAMBODIA

While there is a legal framework which would allow a Cambodian court to recognise and enforce a foreign judgment, to date, we are unaware of any foreign judgment that has been recognised and enforced, or refused to be recognised and enforced by the Cambodian courts. Therefore, there is some challenge in understanding exactly how the courts will interpret various aspects of the applicable laws.

If a party is seeking the recognition and enforcement of a foreign judgment in Cambodia, then an execution judgment must be obtained from a Cambodian court.2 To do so, a party must file a motion for recognition and enforcement of the foreign judgment with the Cambodian courts and the party filing such motion will bear the burden of proof.

The Civil Procedure Code is the primary law in Cambodia governing the recognition and enforcement of a foreign judgment. The Cambodian court will first look to the four threshold requirements under Article 199 of the Civil Procedure Code when determining whether to issue an execution judgment. However, these are not the only considerations that a court must take into account.

The four threshold requirements which must be met in order for a final foreign judgment to be deemed valid in Cambodia are as follows:3

  1. jurisdiction is properly conferred on the foreign court by law or by treaty;
  2. the losing defendant received service of summons or any other order necessary to commence the action, or responded without receiving such summons or order;
  3. the contents of the judgment and the procedures followed in the action do not violate the public order or morals of Cambodia; and
  4. there is a guarantee of reciprocity between Cambodia and the foreign country in which the court is based.

The first threshold requirement seeks to ensure that the foreign court which issued the judgment had proper jurisdiction. Cambodian law or a treaty to which Cambodia is a party must recognise that the foreign court which issued the judgment had proper jurisdiction4 over the parties and subject-matter resolved in the judgment. Cambodian courts may also look at any dispute resolution agreement between the parties to consider whether there is proper jurisdiction in light of such agreement.5

It is possible that a Cambodian court would refuse to recognise and enforce a foreign judgment if it was rendered in breach of a choice of court agreement. Article 199(a) of the Civil Procedure Code requires that jurisdiction be properly conferred by law or by treaty. If there was a valid dispute resolution agreement which included a choice of court provision and a foreign judgment was rendered in breach of it, it is possible that the Cambodian courts could determine that there was no proper jurisdiction conferred by the law or treaty. Further, under Article 199(c) of the Civil Procedure Code, the judgment and procedures followed in the action must not violate the public order or morals of Cambodia.

Under the Civil Code of Cambodia, parties generally enjoy the freedom of contract, so long as the terms do not violate any mandatory provision of law or public order and good customs.6 Therefore, it may also be possible that a Cambodian court may find that a judgment rendered in breach of a choice of court agreement would fail to meet the requirements under Article 199(c) of the Civil Procedure Code as to do so would be to recognise a judgment made in breach of the valid agreement of the parties to the agreement.

The second threshold requirement seeks to ensure that due process was followed in terms of proper notification of the defendant of any action commenced against such defendant. Cambodian courts must not recognise and enforce a foreign judgment when the losing defendant did not receive service of summons or any other order necessary to commence the action and the defendant also did not respond while not receiving such summons or order. Further, other breaches of due process may also prevent enforcement if such breaches of due process are considered by a Cambodian court as violating the public order or morals of Cambodia.7 Cambodian courts recognise the principle of la contradiction8 and will look to see if all parties were summoned and had the opportunity to be present together to directly counter-argue the dispute.

The third threshold requirement is to ensure that the enforcement of any judgment or the procedures which led to such judgment do not contradict the public order and morals of Cambodia. The terms “public order” and “morals” are not defined under the law and we are unaware of any court decision interpreting the specific meaning of these terms. Interpretation of these terms would be up to the Cambodian courts in respect to the specific case being considered.

Any issues related to a judgment fraudulently obtained would raise the question of whether this third threshold requirement is met. If a Cambodian court were to find that a foreign judgment was procured by fraud, the court could determine that the enforcement and recognition of such a judgment would contradict the public order or morals of Cambodia and the court would therefore be unable to recognise and enforce such judgment. It is possible that a Cambodian court may also look at any violation of due process beyond those related to proper service of summons, such as the losing defendant not being given a reasonable opportunity to present his case, as preventing this third threshold requirement from being met. The principle of la contradiction is also relevant here.

The fourth threshold requirement, a guarantee of reciprocity, is to date the most difficult of the four requirements to meet. Cambodia has only entered into one bilateral treaty related to the recognition and enforcement of a foreign judgment on civil matters. On 21 January 2013, Cambodia and Vietnam entered into the Agreement on Mutual Judicial Assistance in Civil Matters between the Kingdom of Cambodia and the Socialist Republic of Vietnam (Cambodia–Vietnam Judicial Assistance Treaty). Cambodia then passed the Law Approving the Agreement on Mutual Judicial Assistance in Civil Matters between the Kingdom of Cambodia and the Socialist Republic of Vietnam, dated 17 July 2014, in order to ratify this agreement. The details of this treaty are further discussed below.9

Without the threshold requirement of a guarantee of reciprocity, such as is found in the Cambodia–Vietnam Judicial Assistance Treaty, Cambodian courts will not recognise and enforce a foreign judgment in Cambodia. A guarantee of reciprocity does not expressly need to be found in a treaty, however.

As Article 199(d) of the Civil Procedure Code requires a guarantee of reciprocity between Cambodia and the foreign country in which the court that issued the judgment is based, in order for Cambodia to be able to recognise a foreign judgment, the relevant foreign country would have to have some mechanism to guarantee recognition of a judgment of a Cambodian court in that foreign country. However, we are not aware of any mechanism used by a foreign country other than a treaty that may be deemed to give Cambodia such a guarantee of reciprocity. Further, we are not aware of any current intention of the Cambodian government to become a party to the Hague Convention of 30 June 2005 on Choice of Court Agreements.

C. FURTHER CONSIDERATIONS RELATED TO RECOGNITION AND ENFORCEMENT OF A FOREIGN JUDGMENT

As the Cambodia–Vietnam Judicial Assistance Treaty and any other future treaty related to enforcement and recognition of a foreign judgment to which Cambodia is a party would contain specific further requirements for and limitations on recognition and enforcement, the discussion that follows will be limited to only common considerations based on Cambodian law and regulations and will not cover any specific requirements under any specific treaty. Please note that recognition and enforcement sought under any specific treaty will include further analysis for determining whether such foreign judgment would be recognised and enforced. Further considerations for the Cambodia–Vietnam Judicial Assistance Treaty are covered below.10

There are two steps in order to have a foreign judgment recognised and enforced in Cambodia. First, an execution judgment must be obtained from a Cambodian court. Then, after the execution judgment is obtained, a request for enforcement of the execution judgment must be made.

As this is a new area of law in Cambodia, it may also be difficult to predict exactly how Cambodian courts will interpret the Civil Procedure Code and other laws and regulations which pertain to the enforcement and recognition of a foreign judgment. The Civil Procedure Code does include a commentary that helps provide some insight into how particular articles of that law should be interpreted, including how the four threshold requirements under Article 199 of the Civil Procedure Code would be interpreted.11

Assuming that the four threshold requirements under Article 199 of the Civil Procedure Code are met, a Cambodian court must still refuse to recognise and enforce a foreign judgment if such judgment is not proven to be final and binding.12 There is no definition of the term “final and binding” under the Civil Procedure Code. In this regard, the term “final and binding” shall be interpreted in accordance with the laws of the foreign judgment and, in order to enforce such foreign judgment, there must be sufficient proof that such foreign judgment is final and binding. The burden of proof that a foreign judgment is final and binding will rest with the party seeking the recognition and enforcement of such award.

As any foreign judgment would need to be final and binding to be recognised and enforced, it does not appear possible under the current legal framework to have a Cambodian court recognise and enforce an interlocutory judgment or an order to freeze an asset, as neither is likely to be deemed a final and binding judgment.

While a Cambodian court would need to determine the finality of a foreign judgment, it would not look into the actual merits of the case. A Cambodian court is not permitted to review the substantive merits of the judgment of the foreign court.13 Therefore, the courts of Cambodia must not use the grounds that the foreign court made an error of fact, an error of law, or both to refuse to recognise and enforce a foreign judgment.

Cambodian courts may also have to consider issues of res judicata when considering recognition and enforcement of a foreign award. Cambodian courts may refuse to recognise and enforce a foreign judgment because it conflicts with a judgment involving the same parties and same subject matter that is rendered by a Cambodian court.14 There is no express provision in the Civil Procedure Code on how Cambodian courts are to deal with two foreign judgments from two separate foreign courts regarding the same dispute between the same parties.

D. CAMBODIA–VIETNAM JUDICIAL ASSISTANCE TREATY

The Cambodia–Vietnam Judicial Assistance Treaty covers a variety of issues related to judicial assistance in civil matters, including the service of judicial documents, transferring evidence, summoning of witnesses, and the recognition and enforcement of certain court judgments and decisions as provided in the treaty. The Cambodia– Vietnam Judicial Assistance Treaty defines civil matters to include civil, marriage and family, business, commercial and labour matters15 and, among other things, lays out the framework for which each state will recognise and enforce, if necessary, a civil court judgment of the other state, including limitations on the ability to have a civil court judgment of the other state enforced.16

Under Article 22, there are five conditions which must be met in order for a court judgment or decision (as stipulated under Article 21) to be recognised and enforced under the Cambodia–Vietnam Judicial Assistance Treaty:17

  1. The case does not fall into the exclusive jurisdiction of the courts of the Requested Party under the national laws of the Requested Party;
  2. The litigants or their legal representatives have been duly summoned or declared absent in accordance with the national laws of the Requesting Party;
  3. The court judgments or decisions have entered into legal effect and the statutes of limitation for execution of such judgments or decisions have not expired under the national law of the Requesting Party;
  4. There has not been a legally effective civil court judgment or decision on the same case that has been made by the court of the Requested Party or there is no judgment or decisions by the court of a third country, which has been recognised for enforcement by the court of the Requested Party, or at the time of recognition of that judgment or decision, the court of the Requested Party has not registered or heard the same case;
  5. The recognition and enforcement of the court judgments or decisions and consequences of the recognition and enforcement of such judgments or decisions shall not contradict the fundamental principles of law and public order of the Requested Party.

These five requirements are in addition to the requirements under Articles 199 and 352 of the Civil Procedure Code for recognition and enforcement, though there is overlap between the requirements under this treaty and the Civil Procedure Code. Both the treaty and the Civil Procedure Code are concerned with proper jurisdiction, proper service of summons, the final and binding nature of the judgment, and that the recognition and enforcement of a judgment does not violate public order.18

E. ENFORCEMENT OF A FOREIGN JUDGMENT 19

If the four threshold requirements are met and a foreign judgment is found to be final and binding, it is then that a Cambodian court would issue the execution judgment. The Civil Procedure Code provides for different types of executions of judgments.20

Book Six of the Civil Procedure Code covers executions of judgments, including execution judgments issued for foreign judgments and foreign arbitration awards.

Chapter Two of Book Six of the Civil Procedure Code provides for the following types of executions of claims having the object of monetary payment:

  1. executions against movables;
  2. executions against claims and other property rights;
  3. execution against immovable; and
  4. execution against vessels.

Chapter Three of Book Six of the Civil Code also provides specific additional rules for execution of an enforcement of security interests against movables, against claims and other property rights, against immovable, and against vessels.

Chapter Four of Book Six of the Civil Code provides for the execution of claim rights of which the subject-matter is not money.

Therefore, under the Civil Procedure Code, there is potential to enforce both foreign money judgments21 and foreign non-money judgments.

There is no provision in the Civil Procedure Code which restricts the enforcement of an in rem judgment. Therefore, an in rem judgment is potentially subject to recognition and enforcement by the Cambodian courts. However, Article 199(c) of the Civil Procedure Code requires that the judgment and procedures followed in the action must not violate the public order or morals of Cambodia. There is no definition of “public order” or “morals” provided under the laws. Therefore, these terms will be interpreted by the court. Whilst there is potential to have an in rem judgment recognised and enforced in Cambodia based on the current legal framework, the Cambodian courts would need to ensure that any such recognition and enforcement does not violate the public order and morals.

Further, Article 15 (Exception in case of statutory exclusive jurisdiction) of the Civil Procedure Code states that “the provision of Article 13 (Jurisdiction by agreement) and 14 (Jurisdiction as a result of failure to raise objection) shall not apply to actions regarding which exclusive jurisdiction is conferred by law”. Therefore, it may be possible that a Cambodia court may find that an in rem judgment rendered in violation of the exclusive jurisdiction of the courts of Cambodia22 is a failure to comply with Article 199(c) of the Civil Procedure Code.

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References

  1. Agreement on Mutual Judicial Assistance in Civil Matters between the Kingdom of Cambodia and the Socialist Republic of Vietnam, Cambodia–Vietnam (21 January 2013). 

  2. Civil Procedure Code (2006) Art 352(1).  

  3. Civil Procedure Code (2006) Arts 199(a)–199(d).  

  4. This reporter is unaware of any guidance to determine the proper jurisdiction of the foreign court. 

  5. Civil Procedure Code (2006) Art 13. 

  6. Civil Code of Cambodia (2007) Art 354.  

  7. Civil Procedure Code (2006) Art 199(c).  

  8. Article 3 of the Civil Procedure Code (2006) states that:  

    (1) No party shall be tried without being heard or summoned.

    (2) The court shall, in all cases, preserve the principle of la contradiction.

    In the explanation on the complaint procedure issued by the Ministry of Justice, the principle of la contradiction is explained as follows:

    In order to effectively guarantee the right to be heard, the trial shall be made via the summons of all parties in order to appear at the same date and it shall also allow the parties to directly counter-argue. If it allows the court to summon only one party and hear the argument of such party without the presence of another party, it could affect party’s confidence on the justice of the trial. In this regard, the provision provides that in principle, the court shall try the case with respect to the principle of la contradiction, ie, it shall summon all the parties and let the parties argue and counter-argue to [sic] each other (Paragraph 2 of Article 3). There are also some exceptions (Article 200, Article 201, Paragraph 1 of Article 323 etc) to this principle of la contradiction. (On the other hand, please read paragraph 4 of Article 548.)

    [translation by this reporter]

  9. See D. CAMBODIA–VIETNAM JUDICIAL ASSISTANCE TREATY

  10. See D. CAMBODIA–VIETNAM JUDICIAL ASSISTANCE TREATY.  

  11. The relevant section of the commentary states:  

    (1) Normally, a State is not obliged to recognise a foreign judicial order or judgment. However, this article recognises the effect of a foreign judicial order or judgment by fulfilling certain criteria due to the fact that a case may have been already decided and if the court accepts the case to try again, it would be time-consuming and it is also to avoid any inconsistent judicial decision and to ensure the stability of international trade.

    (2) For the compulsory execution of foreign judicial order or judgment, the creditor in execution shall have an execution judgment.

    (3) For the party who loses the case under the final and binding foreign judicial judgment, [Art 199(b)] requires the foreign court to respect the defense right of such party in respect to the principle of “la contradiction”. If not, it is the abuse of right of such party in self-defense before the court.

    (4) If the foreign judicial order or judgment infringes the public order or good customs of the Kingdom of Cambodia, such foreign judicial order or judgment shall not be effective.

    (5) [Art 199(c)] is the international principle that allows two States to reciprocally respect each other in the purpose of interest protection of the two States or private interest of the citizen of the two States.

    [translation by this reporter]

  12. Civil Procedure Code (2006) Art 352(3).  

  13. Civil Procedure Code (2006) Art 352(4).  

  14. There is no specific provision related to res judicata when considering a foreign award. However, the reporter considers that it is likely that this would fall under Article 199(c) of the Civil Procedure Code (2006) as a violation of public order or morals of Cambodia. 

  15. This would mean that a foreign judgment on a public dispute matter, such as a judgment on a foreign penal, revenue or other public law, is not enforceable via this treaty. 

  16. Agreement on Mutual Judicial Assistance in Civil Matters between the Kingdom of Cambodia and the Socialist Republic of Vietnam (21 January 2013) Arts 1 and 20–25. 

  17. Article 21 of the Agreement on Mutual Judicial Assistance in Civil Matters between the Kingdom of Cambodia and the Socialist Republic of Vietnam (21 January 2013). 

  18. See Articles 199(a), 199(b) and 199(c) of the Civil Procedure Code (2006) and Articles 21(2), 21(3) and 21(5) of the Agreement on Mutual Judicial Assistance in Civil Matters between the Kingdom of Cambodia and the Socialist Republic of Vietnam (21 January 2013). 

  19. This section (paras 28–35) also covers the rules for the execution of a judgment falling within the scope of the Cambodia–Vietnam Judicial Assistance Treaty. 

  20. Civil Procedure Code (2006) Book Six. 

  21. If the foreign judgment includes interest as part of the decision, presumably the interest should be recognisable and enforceable as part of the judgment. 

  22. In accordance with the commentary on Article 15 of Civil Procedure Code (2006), the exclusive jurisdiction conferred by law are (a) Retrial court; (b) motion seeking issuance of demand ruling; (c) exclusive jurisdiction (compulsory execution); and (d) exclusive jurisdiction (preservative relief). 

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