Government of Timor-Leste

The Minister of the Presidency of the Council of Ministers, Fidelis  Manuel Leite Magalhães, The Minister of Justice, Manuel Cárceres da Costa and the Vice Minister of Foreign Affairs and Cooperation, Julião da Silva, participated, on January 20^th, 2021, in the hearings with the National Parliament’s Committee on Constitutional Affairs and Justice (Committee A) and the Committee on Foreign Affairs, Defense and Security (Committee B), on the Timor-Leste's accession to the 1958 New York’s Convention.

The Members of the Government clarified the issues raised by Members of the Parliamentary Committees and defended the importance of Timor-Leste's accession to this Convention, as it is an important incentive to intensify trade relations with abroad and a factor in promoting foreign investment. The Convention has already been ratified by more than 160 countries and is considered the most important multilateral agreement under international arbitration law.

The New York Convention applies to the recognition and enforcement of arbitral awards delivered in the territory of a State other than the one where the recognition and enforcement of judgments are requested and resulting from disputes between natural or legal persons. It also applies to arbitral awards which are not considered national awards in the State in which their recognition and enforcement are requested.

Arbitration is an alternative method for resolving conflicts between the parties vis-à-vis the regular judicial system. The parties in conflict agree the dispute to be resolved by arbitrators appointed by them and the final decision is binding on the parties and has the executive force of the courts’ decisions.

One of the main advantages of arbitration is the cases’ resolution speed and the competence of the persons who decide the dispute, given the complexity and specificity of some of the topics under consideration. Following a set of international rules, enabling greater speed in conflict resolution and being decision-binding, foster the confidence of external partners and mitigates possible barriers to their investment in the country.

Also being examined by the National Parliament are two legislative initiatives delivered by the Government, on the Legal Regime of Voluntary Arbitration and on the Legislative Authorisation to amend the Code of Civil Procedure, which also have as main objectives the improvement of the business environment and the strengthening of legal certainty of commercial transactions and compliance with contracts.

Timor-Leste's accession to this Convention, together with these two Law Proposals, framed in improving the provision of justice and in the Public Administration Reform Program, aim to create out-of-court solutions for the resolution of contractual conflicts between private individuals, but also between private individuals and the State, in terms of private contracts, giving greater simplification and greater agility in the judicial resolution of commercial conflicts.