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30 January 2020
The new Arbitration Bill was approved in general terms by the Legislative Assembly on 6 June 2018 and voted into law on 5 November 2019 (for further details please see "Government drafts new arbitration bill"). The new regime will enter into force on 4 May 2020.
Although some changes were made to the bill approved in 2018, its essence remains the same: once the New Arbitration Law (19/2019) enters into force, Macau's dual arbitration system will cease to exist.
The New Arbitration Law combines the existing two sets of rules into a single law, which will apply to both international and domestic arbitration.
This new regime aims to promote Macau as a commercial arbitration centre between China and Portuguese-speaking countries and take full advantage of the high number of bilingual professionals in Macau and its cultural and legal similarities to Portuguese-speaking countries.
The new law sets out the framework applicable to all arbitrations that take place in the Macau Special Administrative Region (MSAR) and is still inspired by the United Nations Commission on International Trade Law Model Law, which now applies to both internal and external arbitration. Thus, the issue of conflicting situations resulting from the application of two sets of rules has been settled. Changes were also made to align the object of arbitration and the grounds for refusing the recognition or enforcement of arbitral awards with the Civil Procedure Code.
The general rule is that arbitration can be used in any dispute that may be decided through settlement, provided that no specific law requires the dispute to be submitted to a court. According to Macau law, parties cannot use arbitration to settle disputes relating to inalienable rights (eg, certain family matters) or unlawful business. All other scope of application requirements have been removed.
Designation of arbitrators
Some rules regarding the designation of arbitrators have been amended. As per Decree-Law 26/96/M, unless otherwise agreed by the parties, arbitral tribunals will comprise three arbitrators. However, with the New Arbitration Law, the number of arbitrators need not be odd (Decree-Law 26/96/M provides that the number of arbitrators must be odd). In the case of arbitration proceedings which involve an even number of arbitrators, if a simple majority cannot be obtained in decision making, the arbitral tribunal will notify the parties of the need to appoint an additional arbitrator in order to come to a decision.
One notable amendment concerns confidentiality. Under the current regime, ab initio no duty of confidentiality is imposed on any party involved in arbitration. If the arbitration agreement stipulates that the proceedings are confidential, all parties, arbitrators and institutions must adhere to this requirement. However, this will not be the general rule. Under the New Arbitration Law, arbitral proceedings, the participants and the contents thereof will be kept confidential, without prejudice to the cases in which such confidentiality may cease under the new law.
Arbitrators, the parties and those who, in the performance of their duties, have contact with the proceedings have an obligation of confidentiality in relation to all information obtained and documents made available to them in the course of the proceedings. This obligation ceases only by agreement between the parties, when prescribed by law or when necessary for the purposes of recording the award or exercising the rights of the parties in court. The duty of secrecy does not prevent arbitrators or institutions from publishing awards, provided that the elements identifying or making it possible to identify the parties are omitted, unless any of them opposes such publication.
Recognition and enforcement of foreign awards
The New Arbitration Law sets out a new regime for the recognition and enforcement of arbitration awards rendered outside the MSAR. Unless otherwise provided for in an international agreement which applies in the MSAR, a judicial cooperation agreement or a special law, arbitration awards rendered outside the MSAR will be effective only if they are recognised by the courts.
Parties seeking the recognition of an arbitration award made outside the MSAR must provide the original award or a certified copy (with a certified translation if the arbitration award is not in an official language of the MSAR). Once the request has been submitted to the Second-Instance Court for recognition along with the documents referred to above, the opposing party will be notified to contest within 15 days. The applicant may reply within 10 days of notification of the dispute's submission. Once the pleadings have been completed and the necessary steps have been taken, the process is made available to the public prosecutor. If the public prosecutor raises any matter, the parties may object within 10 days. The trial will be conducted according to the rules of ordinary appeal to the Second-Instance Court.
Once the New Arbitration Law takes effect, arbitral proceedings are expected to be smoother and faster. Further, the overall legislative cohesion is likely to encourage foreign investors and partners to choose Macau as their jurisdiction for disputes and strengthen its arbitration credentials internationally – particularly in Portuguese-speaking countries.
For further information on this topic please contact Pedro Cortés or Madalena Perestrello at Rato, Ling, Lei & Cortés Advogados by telephone (+853 2856 2322) or email (email@example.com or firstname.lastname@example.org). The Rato, Ling, Lei & Cortés Advogados website can be accessed at www.lektou.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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