PNG’S LEGAL SYSTEM AND LAWS FOR FOREIGN INVESTORS
constitutional matters and has unlimited original jurisdiction for criminal and civil matters. Despite its unlimited civil jurisdiction, few matters involving amounts of less than K10,000 are brought in the National Court. This is because certain District Courts have jurisdiction in civil actions of up to K10,000 and legal costs associated with National Court proceedings can be substantial. The National Court has jurisdiction under the Land Act in proceedings involving land in PNG other than customary land. The National Court also has jurisdiction in appeals from Local and District Courts and from certain administrative tribunals. In addition to the courts mentioned above, there is also a system of Village Courts established under the Constitution and the Village Courts Act. Matters involving customary law claims are likely to arise at the Village Court level. However, as the Constitution adopts custom as part of the underlying law, there is no reason why customary law arguments cannot be raised in the appropriate circumstances in other courts in PNG. There is no jury system in PNG. Lawyers operating in PNG are governed by the PNG Law Society and only lawyers registered with the Society should be used.
3.2.3 Enforcement of foreign judgments Under the Reciprocal Enforcement of Judgments Act, certain judgments of certain foreign courts are recognised and are able to be enforced in PNG by a process of registration. The Act establishes a system of reciprocity of recognition and enforcement of foreign judgments of designated courts within prescribed countries including Australia, the United States of America, the United Kingdom and New Zealand. Even if a foreign money judgment is not from a designated court, it may still be recognised and enforced in PNG by commencing a separate action in the National Court to sue on the judgment under the local rules of private international law.
3.2.4 Arbitration As an alternative to litigation, if a contract so provides or the parties agree, disputes may be referred to an independent third party for arbitration. In PNG, the Arbitration Act regulates the submission of a matter to arbitration either by agreement between the parties or by order of a court. Submitting a dispute to arbitration has a number of advantages including confidentiality, possible savings in time and money and use of the arbitrator’s expertise. The arbitrator may be chosen on the basis of his or her particular experience and qualifications relating to the subject matter of the dispute.
the pre-contractual stage for the parties to determine which matters they consider to be important to the conduct of arbitration. The Arbitration Act contains a set of rules which govern an arbitration under that Act. Those rules will only apply if the parties have not determined their own rules. An arbitral award will be given the status of a judgment of the National Court. PNG is a party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, under which the International Centre for Settlement of International Disputes (ICSID) was established. In agreements with foreign developers, the government generally adopts the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). The National Court Act (the Act) was amended in 2008 to provide procedures for alternative dispute resolution (ADR) through mediation and other related methods. The Act provides for the powers of the Court in certain circumstances to order or direct part of a proceeding or proceedings to be resolved by way of mediation. The court may make orders or directions for mediation with or without the consent of the parties. Mediation (both private and court-directed) The Alternative Dispute Resolution Courts were officially opened on 4 September 2009 and facilitate this cost and time effective method of dispute resolution. Many Government departments utilise mediations for conflict resolution as a matter of course and it is prescribed by a number of statutes. Further, in 2010, the National Court made ‘Rules Relating to the Accreditation, Regulation, and Conduct of Mediators’. Mediation is now a compulsory step in National Court civil proceedings, unless the Court can be convinced to dispense with the process. Hundreds of mediations have already been completed, saving parties millions of kina in legal costs, avoiding the long delays of litigation and freeing resources up to get on with business. Persons to conduct the mediation Mediation has been enthusiastically embraced in PNG. There is a growing body of accredited mediators. A judge of the Court may, with the consent of the parties, conduct the mediation; or with the parties’ consent, appoint a mediator of their choice to conduct the mediation. If the parties fail to consent to the court conducting the mediation or fail to consent to a mediator of their choice, the court will appoint a mediator from the Court’s list of accredited mediators, maintained under the Act.
The rules governing arbitration to some extent depend on the arbitration clause or agreement. Therefore, it is important at
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THE PNG INVESTORS’ MANUAL - SECOND EDITION