Civil and commercial litigation

Since 1993, the Royal Government of Cambodia (RGC) has been working to reform the country’s legal framework, and in particular the application of justice, to provide a clear and fixed procedural system to ensure respect for individual rights and equality before the courts.1 In theory, to be settled by a judge, both civil and commercial disputes must be presented to the court according to rules defined by law.

Civil litigation

A civil litigation is a judicial procedure before a civil court that allows a person to settle a dispute or claim their rights against another person or a company regarding every matter except criminal.2 For instance, a civil dispute may concern:

  • Individual property (such as a right of passage over one’s land, a debt or a contract)
  • A family-related situation situation (such as a divorce or an application for child support)
  • Physical injury (such as injury from a fall on a sidewalk or a bite from a neighbour’s pet).

In a civil case, the plaintiff is the one who seeks the court’s endorsement of a right they want to exercise against the defendant, who opposes it.

Civil rights and obligations are mainly provided for by proceedings in the Code of Civil Procedure, which was promulgated on 6 July 2006.

Covers of the Code of Civil and the Code of Civil Procedure of the Kingdom of Cambodia. Photo by the Open Development Cambodia (ODC). Licensed under CC BY-SA 4.0.

This code specifies all procedures related to civil actions. The code is divided into 9 books with 588 articles in total.

The nine books are: 

  • Book 1 provides general provisions of civil procedures include the purpose and fundamental principles of civil procedures, the courts, parties, litigation cost and security under litigation
  • Book 2 stipulates proceedings at the court of first instance which explains a suit, oral argument and preparation, evidence, an interruption and suspension of litigation, judgment, conclusion of action not based on judgment, special provisions regarding small claim matters; date, term and services; and viewing of case record
  • Book 3 covers appeals to the higher courts including general rules of appeal, Uttor Appeal, Satuk Appeal and Chumtoah Appeal;
  • Books 4 and 5 have a single chapter related to Retrial and Demand Procedures respectively.
  • Book 6 establishes compulsory execution procedures including general provisions of compulsory execution, execution of claims having the object of monetary payment, specific rules governing enforcement of security interests, and execution of claim rights of which the subject matter is not money
  • Book 7 deals with preservative relief which is comprised of general provisions of preservative relief, ruling on preservative relief and execution of preservative relief
  • Book 8 explains transitional provisions
  • Book 9 explains the entry into force of the code.

The Code of Civil Procedure provides three main types of procedure: litigation proceedings, compulsory execution procedures and procedures of preservative relief. Learn more about the Code of Civil Procedure and the Code of Civil Procedure through the “Law Dissemination Program” of the Ministry of Justice.

Litigation proceeding is a civil lawsuit or civil action aiming to determine the existence or nonexistence of rights and obligations or legal relationships founded on the laws.3 That procedure is the common proceeding at the courts of the first instance, namely the Phnom Penh Capital Court and other provincial or municipal courts. This procedure begins with filing of a lawsuit and ends with final judgment. First, the plaintiff files a lawsuit,4 then both parties prepare for oral argument and finally oral arguments are heard in court before the judgement. Compulsory execution procedures aims at achieving a final decision on claim rights of a private individual.5 While procedures of preservative relief, as mentioned in Article 530 of the Code of Civil Procedures “If there is an apprehension that execution will become impossible or extremely difficult by reason of alteration of the state of the property of the debtor in execution, or that significant damage or imminent risk will arise affecting the status of one of the parties in respect of the right in issue, a person wishing to preserve his/her rights may apply for preservative relief pursuant to the provisions of this Book”.6 During all the procedure, the judge must encourage the parties to seek a compromise, to opt for an alternative dispute resolution.7

A party dissatisfied with the judgement can file an appeal to the higher courts (Appeal Court and Supreme Court). It starts a procedure for the trial and ruling on appeal of the parties to dismiss or change the previous judgement rendered by a lower court before the decision becomes definitive.

The Code of Civil Procedure provides three types of appeals:

  • Appeal to the Appellate Court, which is called an Uttor Appeal or second trial.8 It is the appeal against the judgement of the court of the first instance that is not yet final. Uttor Appeal can be filed by the losing party (unless the parties agreed to not file an Uttor Appeal but only a Satuk appeal) within one month from the first judgement date and if the amount of the claim at stake does not exceed 5,000,000 riels.9
  • Appeal to the Supreme Court, which is called a Satuk Appeal,10 which is the appeal made against a judgement of the Uttor Appellate Court. It is also called the final trial. The Satuk Appeal only settles cases with respect to the application of the law and not the facts.
  • Appeal to the higher courts against the courts’ rulings (made without references to the oral arguments) which is called a Chomtoah Appeal.11

Commercial litigation

Since the 1995 Law on Commercial Rules and Register was implemented, commercial courts have been due for introduction.12 However, these courts have not yet been established (as of early 2021). This law states during the period in which the Kingdom of Cambodia has no Commercial Court, ordinary courts are competent in all commercial matters. Thus, the Civil Court of the court of the first instance adjudicates all commercial cases.

The courts of first instance have the competence to hear all commercial cases including insolvency cases in accordance with the provisions in commercial procedures.13 The Phnom Penh Municipal Court is the court most frequently used by commercial litigants. However, this court is seen by practitioners as overburdened and lacking expert and experienced judicial professionals in adjudicating commercial matters.14

Commercial proceedings follow the same set of rules as civil proceedings, except in the composition of the judging panel of the court: there are three judges and two advisors, who are businessmen or who have knowledge in commercial laws, where the subject matter is equal to or over 1.000.000.000 (one billion) riels. When the amount at stake is between 100.000.000 (one hundred million) and 1.000.000.000 (one billion) riels, the panel consists of only one judge and two advisors.15

The commercial advisors do not carry out their duties permanently in the court of first instance. Commercial advisors carry out their functions at the invitation of the president of commercial court of the court of first instance16

In the current situation, the average cost of resolving a dispute is estimated at 103.4% of the value of the claim.17 Most companies therefore have greater confidence in alternative dispute resolution methods, such as mediation and especially arbitration, which developed with the 2006 Law on Commercial Arbitration and the launch of the National Commercial Arbitration Centre (NCAC) in 2013.18

Related to Civil and commercial litigation

References

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