Court Boosts Lao PDR Banks
ADB Review [ May 2005 ]
Establishing a commercial court division in the Lao People’s Democratic Republic (Lao PDR) has been an essential element of the Asian Development Bank (ADB)’s ongoing technical assistance (TA) to help reform the country’s banking sector.
Extensive groundwork by ADB preceded the opening of the Commercial Division of the Vientiane Capital Court in September 2004, with its three appointed judges.
The commercial division provides a credible threat to loan defaulters, and an additional tool for state-owned commercial banks whose nonperforming loan portfolios are extensive.
The country’s legislative framework had to be enhanced to support the new court division, resulting in amendments to the Law on Civil Procedures and the Law on Enforcement of Civil Judgments. Rules and procedures also had to be prepared for use by commercial court judges and court registry staff.
Training for judges and trainers was undertaken in three phases to allow participants sufficient time to absorb the training material. Court registry and enforcement staff were also trained in the operation of the new court division, including setting up monitoring systems to record case developments.
Commercial division judges, prosecutors, and members of the Lao Bar Association subsequently attended a workshop funded under an ADB TA
project to enhance commercial laws, streamline commercial regulations, and develop a supporting regulatory framework to foster the growth of Lao PDR enterprises. The legal reform work includes developing model bank-loan documentation for state-owned commercial banks, and training staff to litigate commercial cases.
While the TA has strengthened the role of the judiciary in the Lao PDR, it is recognized that more needs to be done.
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