On July 17 2019, Papua New Guinea (PNG) acceded to the United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention). The New York Convention is the document credited with being responsible for making international arbitral awards enforceable. It means that PNG, subject to enacting some additional domestic legislation, has now agreed to recognise arbitration decisions made in country and overseas that need to be enforced against parties/assets in PNG.

It has significant importance for entities doing business in PNG particularly on cross-border transactions. Parties to a dispute no longer have to resort to PNG courts to seek a remedy on commercial matters. Some disputes regarding real property and/or local securities etc, will presumably still be deemed subject to national sovereignty, however, other claims can be arbitrated to avoid the ‘pitfalls’ of litigating in PNG.  

As a consequence, contracts used in PNG should refer disputes to arbitration subject to institutional rules such as ICC, SIAC, ACICA, LCIA, etc.

Please contact GRT Lawyers if you need assistance in drafting and/or updating your contracts to have appropriate arbitration clauses.