Resolving Securities-Related Disputes through Mediation
The Securities and Exchange Regulator of Cambodia (“SERC”) is the authority that supervises the Cambodian securities sector. The SERC also provides securities dispute resolution under the framework of mediation under its legal affairs department operating as the Securities Dispute Resolution Center (“SDRC”). The SDRC was established in 2017; however, it only started to be well-known to the public when securities disputes began to arise in recent times.
The following aims to provide critical insights regarding the legal mechanism through the mediation procedures under the SDRC.
How mediation differs from other dispute resolution methods?
Mediation is a type of alternative dispute resolution (“ADR”) that differs from traditional judicial and arbitral methods such as court litigation or arbitration (another ADR type). The mediator, as opposed to the judge or arbitrator, does not have the power to decide the dispute. Rather, the mediator only acts to facilitate the parties reaching a “meeting of the minds” or agreement, usually by getting both sides to find some middle ground through compromise.
Mediation, then, is a party-centered dispute resolution method, a structured, interactive process where the mediator as an impartial third party assists disputing parties in resolving conflict using specialised communication and negotiation techniques. The parties in a mediation are encouraged to actively participate, and the mediator uses a wide variety of techniques to guide the process in a constructive direction helping the parties find their optimal solution.
Which disputes can be brought before the SDRC for mediation?
A dispute in the securities sector refers to all claims, disputes, or controversies involving securities or services in the sector. Such disputes may arise between a securities company and its investor client, or between a securities issuer and an investor. Securities companies and clients, issuers and investors may each turn to the SDRC should they have a securities-related claim.
Mediation’s procedural flow before the SDRC
Disputing securities sector parties may file their complaint with the SERC for mediation. A complaint would be dismissed if:
- it is not related to the securities sector;
- it contains insufficient or improper information;
- the plaintiff is incompetent or has no interest;
- it is related to a criminal case;
- it has been settled or is being settled by an arbitration tribunal or court; or
- it has been made when a right to sue limitation period has expired.
If the complaint complies with the requirements included in the regulations, the disputing parties shall sign a mediation agreement as prescribed by SERC’s Director-General. The parties must pay administration and mediator fees and a deposit to cover other costs which may arise during the mediation process.
Once payment has been made, the mediator shall set a date and a place for the parties to attend the meeting and invite the parties. If either party is unable to attend the mediation meeting as scheduled, the mediator shall set a second and subsequent time for the meeting. If a party is absent from two consecutive meetings without proper reason, the dispute shall be deemed to be not settled.
The mediation process shall be concluded within 90 days from the mediator’s appointment date. Mediation may be settled or remain unsettled. Any agreement by disputing parties reached in the presence of mediator(s) will be effective for execution. Any unresolved issues shall result in mediation being deemed unsettled. The mediator shall then make an unsettled mediation record that sets forth the disagreed issue(s), its reasons, and other essential relevant information.
This alert is for general information purposes only and is not a substitute for legal advice.