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Developing Mongolia's Legal Framework: A Needs Analysis : The Judicial System

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Arbitration

Mongolia has one arbitration forum, the so-called Arbitration Court of the Mongolian Chamber of Commerce and Industry in Ulaanbaatar. It was established in the early 1960's and deals with disputes between Mongolian and foreign entities. Prior to 1991, disputes involving only Mongolian entities were dealt with by specialised arbitration courts attached to the ordinary courts. Those arbitration courts have been abolished, however, leaving the Arbitration Court as the sole remaining arbitration centre sanctionedby the government. While parties can choose to arbitrate informally through their own means, only awards of the Arbitration Court are enforceable through the Mongolian court system. As Mongolia recently acceded to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (adopted in 1958 and more commonly known as the New York Convention), arbitration awards made within Mongolia are also now enforceable in the 125 or so other states and territories that have ratified the convention.

The Arbitration Court hears approximately 15 cases a year. There is a panel of approximately 15 arbitrators appointed by the Chamber of Commerce and Industry, all of whom are lawyers. Cases take on average approximately two months from start to finish. Decisions are final with no right of judicial review by, or appeal to, the courts.

At present, arbitration is governed by regulations of the Arbitration Court but a draft Foreign Trade Arbitration Law based on the model law on international commercial arbitration adopted in 1985 by the United Nations Commission for International Trade Law (UNCITRAL) has been submitted to the Ikh Khural and is scheduled for debate in the autumn 1995 parliamentary session. The draft law would establish the Chamber of Commerce and Industry as the centre for foreign trade arbitration in Mongolia and regulate the appointment and powers of arbitrators, the rights of the parties submitting to arbitration, the procedural rules for the arbitration hearings and the enforcement of awards.

Mongolian arbitrators have increasing experience in dealing with the type of complex legal issues that are likely to arise in a commercial arbitration but would nevertheless still benefit from training, especially in market economy operations and private international law. The Arbitration Court hopes to expand its contacts with the Hong Kong International Arbitration Centre²⁹ and the International Chamber of Commerce in Paris, as these institutions run training courses for arbitrators. Training in languages would also be valuable, particularly English as the language in which many international contracts and other documents are written, although at present the non-Mongolian party at most arbitrations is either Chinese or Russian.

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