An overview of the law, the judicial system and enforcement of foreign judgements and arbitration in Papua New Guinea.

Papua New Guinea’s national emblem consists of a bird of paradise over a spear and a kundu (drum).

Laws of PNG

The Constitution of PNG provides that the laws of PNG consist of:

• The Constitution
• Organic Laws, which are passed by a special majority of Parliament and have quasi-constitutional status making them superior to Acts of Parliament
• Acts of Parliament, which are passed by the National Parliament
• Emergency Regulations, which are laws of limited duration made by the National Parliament in special circumstances where a state of emergency is declared by the National Executive Council
• Provincial Laws, which are passed by provincial legislatures and has effect only within the respective province
• Laws made under or adopted by the Constitution
• Underlying Law being the un-enacted law developed by the Courts where there is no legislation enacted by Parliament in place.

In developing the underlying law the Courts adopt custom (or customary law) subject to certain requirements, and the principles and rules of common law and equity in England at the time of independence (16 September 1975), which are also subject to similar exceptions as that of customary law.

Contract law in PNG is very similar to and applies in much the same way as in other common law countries such as England, Australia, Canada and New Zealand. It would, however, be fair to say that there is considerably less statutory regulation of the application and operation of contracts in PNG than in those other countries.

The Judicial System

The Constitution provides that the National Judicial System consists of the Supreme Court, the National Court and other courts established by Acts of Parliament.

The Supreme Court is the ultimate appeal court in PNG. It has original jurisdiction in matters of constitutional interpretation and enforcement and has appellate jurisdiction in appeals from the National Court, certain decisions of the Land Titles Commission and those of other regulatory entities as prescribed in their own Acts. The Supreme Court is convened as a bench of at least three Supreme Court judges.

The National Court also has original jurisdiction for certain 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 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 consulted.

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.

The adoption of the common law of England as part of the underlying law of PNG also enables the enforcement of foreign judgments.

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 rules governing arbitration to some extent depend on the arbitration clause or agreement. Therefore, it is important at 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 governs 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 Centre was officially opened on 4 September 2009 and facilitates 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.

This section was prepared by Dentons PNG for Business Advantage PNG.