Month: July 2018

Notarisation of Security Agreement in Lao PDR

[:en]All contracts in Lao PDR are required to be notarised and registered with the relevant authorities to ensure their legal compliance and validity under the Law on Notary. Additionally, security agreements are subject to registration requirements under the Law on Secured Transactions, and the Decree on the Implementation of the Law on Secured Transactions (the “Decree”).

Notarised agreements will have greater legal value as evidence in the event of a dispute arising over the contents or implementation of such agreements as the Lao courts, as well as mediation and arbitration authorities, will consider the enforceability and legality of notarised agreements already established.

Only Lao language agreements may be notarised.

Under the Law on Secured Transaction and the Decree, agreements in which one party acquires a security interest in the immoveable property of another, such as loan agreements, pledge and mortgage agreements, etc. must be notarised and registered with the Ministry of Finance (“MOF”) and the Land Management office of the Ministry of National Resources and Environment in order to have preferential rights of priority. Typically, security agreements over moveable assets must only be registered at the State Assets Management Department of the MOF.

As a result of increased economic activity and a rise in the levels of secured transactions in Lao PDR, and as such to facilitate greater registration of security interests, the minister of the MOF issued the Regulation on the Management of the Electronic Registration over Moveable Assets (the “Regulation”) in 2013. The Regulation allows both individuals and legal entities to record their security interest in moveable assets such as vehicles, inventory, accounts receivable, crops, etc. at the Moveable Property Registry (“MPR”) office.  The MPR is a centralized digital registry of security interests from across the country. For example, if a car has been pledged as collateral to a lending institution its security interest in the car may be registered in the MPR. The registry office provides a database where all security interests in moveable property can be registered and searched.

Under the Regulation, a creditor is entitled to check whether or not a moveable asset used as collateral under a loan agreement has prior registered security interests over it and who will have priority over that secured asset. A creditor can check registered interests by searching the following key information in the MPR:

  • the MPR registration number of the debtor (if known);
  • identification information of the debtor (such as Lao ID or passport number);
  • the Enterprise Registration Certificate number of the debtor (if a Lao-registered legal entity);
  • the Vehicle Identification Number of a secured vehicle.

The process of notarisation and registration of security agreements in Lao PDR is fairly straightforward but does generally require attendance at a notary office.

If you would like more information or assistance with respect to notarisation and registration of security agreements in Lao PDR , please contact the Arion Legal team at[:]

Out of Court Dispute Resolution

[:en]The number of investors expressing an interest in starting businesses in Lao PDR has been increasing in recent years as the government of Lao PDR has continuously focused on providing regulatory changes in favor of both domestic and foreign investments. These investment policies have created many opportunities for new investors and competitors as well as increasing employment in Lao PDR. As a result of higher levels of employment, the government of Lao PDR has adopted the Prime Minister’s Decree on Labour Dispute Resolution No.76 dated 28 February 2018 (the “Decree”) to simplify out-of-court methods of resolving labour disputes under the Labour Law with the aim of protecting the rights and interests of both employees and employers and making issues arising out of, or relating to, employment efficiently resolvable.

The Decree expands the descriptions of the two categories of labour disputes, namely those constituting a ‘Regulatory Dispute’ and an ‘Interest Dispute’, which in each case may be an ‘individual’ or ‘collective’ dispute.

Regulatory Disputes are disputes resulting from either an employer or employee who fails to comply with the labour law, the internal regulations of a labour unit, the individual or collective employment contracts pertaining to the employer and other labour related legislation. This may include breaches such as overtime work exceeding that provided for by law or payment of wages lower than the minimum wage as determined by the government.

An Interest Dispute is a dispute arising from either party having not responded to a request for new rights and/or interests by the other party, for example, working hours, wages or labour welfare arrangements.

The Decree also provides more clarification on the following out-of-court labour dispute resolution methods: ‘Compromise’, ‘Administrative Resolution’ and ‘Resolution by the Committee for Labour Dispute Resolution’.

It is required under the Decree that a procedure for compromise is provided for in the internal regulations of a labour unit. A resolution via compromise shall be reached within fifteen (15) days from the date of receipt of a written request by either disputing party for an individual dispute, and within thirty (30) days for a collective dispute. Compromise also covers a ‘collective negotiation’ process of which a potential outcome is the production of a collective employment agreement. If the disputing parties are unable to come to agreement by compromise, either party may bring the dispute for resolution by Administrative Resolution.

Administrative Resolution proceedings are decentralized to the offices of Labour and Social Welfare from the local to ministerial level. The authority of the relevant office depends on amount of employees of the relevant employer. In cases in which compromise and Administrative Resolution have failed in the lower levels (e.g. village level), for instance, the dispute will be referred upwards to the District Offices of Labour and Social Welfare to conduct additional Administrative Resolution proceedings.

A mediator is appointed by each office for Administrative Resolution proceedings. The timeframe of each level of Administrative Resolution proceedings shall not exceed fifteen (15) days from the date of receipt of a written request by either disputing party.

Resolution of labour disputes by the Committee for Labour Dispute Resolution is specific for resolution of Interest Disputes. The Committee for Labour Dispute Resolution is set up at central and provincial level with appointed members being representatives from the Labour Management Authority, the Employee Representative Organization and the Employer Representative Organization.

The Decree became effective on 29 March 2018.

If you would like more information or our assistance with respect to out-of-court labour dispute resolution proceedings in Lao PDR, please contact the Arion Legal team at[:]

The Changing Landscape of Doing Business in Lao PDR

[:en]The latest developments in the ease of doing business in Lao PDR.[:]



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