Court System
The court system in the Lao PDR consists of:
- The People’s Supreme Court;
- The People’s Courts of Appeal;
- The People’s Courts in Provincial and City Level;
- The People’s Courts in District and Municipal Level; and
- The Military Court.
The people’s courts shall consider and decide the case in three different levels, i.e. (1) the decision for first instance, (2) the decision for appeal, and (3) the decision for cassation. In this regard, the People’s Courts at the district and municipal levels shall have the rights and responsibilities to mediate the parties and decide the case of first instance under:
- civil cases, labour cases and family cases which have a value of claim not exceeding 300,000,000 kip;
- cases which has no value of claim, except commercial cases and juvenile cases; or
- other cases as specified by law.
Cases which do not fall under the scope of the People’s Courts at the district and municipal levels will be heard by the People’s Courts at the provincial and city levels which shall have the rights and responsibilities to decide cases of first instance. In addition, these courts shall also have the rights and responsibilities to decide appeals for the cases which have been decided by the People’s Courts at the district and municipal levels.
The People’s Court of Appeal shall have the rights and responsibilities to decide appeals for cases as well as cassations for cases which have been decided by the People’s Court of the provincial and city level.
The People’s Supreme Court shall have the rights and responsibilities to decide the cassation for cases which have been decided by the People’s Court of Appeal.
Currently, no other special court, other than military court, is established in the Lao PDR. The People’s Court therefore considers every type of case; including criminal cases, civil cases, commercial cases, family cases and juvenile cases. Nevertheless, even though there is no special court in the Lao PDR, the Civil Department, the Labour Department, the Commercial Department, the Family Department and the Juvenile Department havebeen established to consider and decide on cases relevant to their specific characteristics.
In order to reach a verdict, a court shall consider evidence while complying with the laws of the Lao PDR. In the case where issues of a dispute cannot be resolved by any specific law as the law is ambiguous or there is no law, the court shall consider the general principles and traditions of the court. In this regard, traditions of the court may originate from the decisions of the People’s Supreme Court in criminal cases, civil cases, commercial cases, family cases and juvenile cases.
It is worth noting that the Lao PDR is not a member of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (the Hague Convention 1971).
Therefore, decisions of foreign courts are not recognized by and are unable to be enforced in the Lao PDR.
Court fees comprise of:
- state taxes;
- expenses of court proceedings;
- expenses of persons invited to court proceedings; and
- expenses for documents and for the copying of various documents.
In this regard, the expenses of proceedings, the expenses of persons invited to court proceedings and the expenses for documents and for the copying of various documents shall be paid during the proceedings, while state taxes shall be paid during judgment enforcement. For civil cases, two percent of the value of the claim shall be deducted as state tax unless otherwise specified by law. For criminal cases, the parties are not subject to any state taxes. In addition, expenses of criminal proceedings, expenses of the persons invited to criminal proceedings, and expenses for documents and for the copying of documents shall be borne by the state in advance. If the defendant is convicted by the court, the defendant shall pay for the court fees that have been paid in advance by the state. On the contrary, in the event that the court decides that the defendant is not guilty or decides that the person is not in the position to pay the court fees, the state shall be responsible for such fees.
Mediation and Arbitration
The Lao PDR has set up the Organization of Economic Dispute Resolution (the “OEDR”) to manage and govern dispute resolution through an arbitration system. Arbitration proceedings in the Lao PDR are conducted in accordance with the Law on Resolution of Economic Disputes.
Disputes which may be arbitrated by the OEDR must be economic disputes. In this regard, economic disputes are conflicts between organizations and other organizations, organizations and individuals, and individuals and other individuals, both domestic and international, which arise from a breach of contract or business operations.
In order to submit a dispute to the OEDR, the following conditions must be met:
- The dispute is an economic dispute;
- The submission is specified in a contract between the parties;
- The parties mutually agree for submission;
- The dispute is not in the proceeding of the People’s Court or already has a final judgment rendered by the People’s Court; and
- The dispute does not concern national security or peace of the society and environment.
Upon submission of a dispute to the OEDR, the parties shall have the right to decide the form of settlement, i.e. mediation or arbitration.
Mediation is a dispute resolution by negotiation by the parties with one or more mediators acting as a neutral person. Mediation will come to an end upon the occurrence of the following circumstances:
- The parties are able to come to an agreement;
- The parties are unable to come to an agreement;
- One of the parties or both parties do not appear at the mediation without reasonable cause; or
- One of the parties dies without any successor.
In the event that the parties are unable to reach an agreement, the parties may decide to bring the dispute to the OEDR for arbitration. In this regard, a mediator who was involved in the mediation of a dispute cannot perform as arbitrator in the same dispute. On the other hand, if the parties do not wish to submit the dispute for arbitration, they may bring their dispute to the people’s court.
Arbitration is a dispute resolution by the arbitrators who will render an award. An arbitral award shall be rendered not later than fifteen days from the date of completion of collection of information and evidence. However, even after the arbitration panel has accepted the dispute of the parties, the parties still have the right to come to a settlement before an arbitral award is rendered. In addition, after the arbitral award is rendered, the parties may oppose the award to the people’s court within 45 days. However, arbitral awards which may be opposed to the people’s court are limited by law.
The results of the OEDR may be reached by:
- mediation settlement agreement,
- settlement agreement before the issuance of an arbitral award, or
- arbitral award.
In the event that the result of the OEDR has not been implemented, the party which is at a disadvantage has the right to request the people’s court to issue a final judgment for the implementation and enforcement of the result of the OEDR. In such event, the court shall consider and issue a judgment within 15 days after receiving a request. If the result is in compliance with the laws and regulations of the Lao PDR, international conventions which the Lao PDR is a party to, and not involved with the law relating to national security or peace and social order, the people’s court will render a judgment for the enforcement of such result of the OEDR. Such judgment is final and may not be appealed. On the contrary, if the court finds that the result of the OEDR does not conform to the law of the Lao PDR, the parties shall have the right to request the OEDR to re-examine the dispute or to file a complaint to the people’s court for adjudication.
Apart from this, the Lao PDR is a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention 1958) which was countersigned on the date of 17 June 1998 and was put into effect on 15 September 1998. In this regard, the Lao PDR shall recognize and implement an arbitral award of foreign or international economic dispute resolution organization when it meets three conditions as follows:
- The parties must have a nationality of the country which is a party to the New York Convention 1958;
- Such arbitral award is not contrary to the Constitution or any laws relating to the national security or peace and social order of the Lao PDR; and
- The party who has the obligation to pay the debt has assets, businesses, shares, deposits or other property in the Lao PDR.
After such arbitral award of foreign or international economic dispute resolution organization has been recognized by the people’s court of the Lao PDR, it shall be implemented according to the law on judgment enforcement.
The fees for the dispute resolution by the OEDR shall be collected according to the value of the claim which is ranked between 200,000 – 1,000,000 kip.
Mr. Rawat Chomsri, Partner
Email: rawat@siampremier.com
Ms. Natchar Leedae, Advisor
Email: natchar@laopremier.com
Ms. Salin Thewphaingam, Advisor
Email: salin@laopremier.com