Enforcement of Contracts in Laos

“Certified” Translations of Documents

Here in Laos there is a system of ‘notarising’ and ‘registering’ various documents that are used in everyday life and for business purposes.  A “certified translation” is sometimes required by embassies and the Lao Ministry of Foreign Affairs, for example for visa applications and official documentation.  A certified translation of a document can be obtained from a company registered to provide translations.  In Laos, when applying to register a company, the government requires details of the proposed business.  Therefore companies intending to provide translation services must indicate this in their company registration application.  If the company registration application is approved, that company is then licenced to provide translations and can then provide “certified translations”.

Notarisation

A “notary” is generally defined as a person with legal training (but not a law degree necessarily) who is licensed by the state to perform acts in legal affairs, in particular witnessing signatures on documents.  Each legal system has its own rules for notaries.

In Laos, the Notary Law (Amended) No. 11/NA, 26 November 2009 provides for notaries and Notary Offices in Laos.  Notary Offices are only established within justice divisions at each province or prefecture.  There are no independent notaries operating outside of those established Notary Offices.

The law requires notaries to review the correctness of the documents and events in detail before certifying them.  This is actually very onerous and is a much more onerous obligation than is imposed in other jurisdictions for the witnessing of signatures or certifying true copies of documents.

Notarising a document means that the Ministry of Justice then has a copy of that document, and this fact is used in the event of there being a dispute over the existence or contents of that document.

Documents in Laos

In Laos, many contractual documents are required to be notarised and registered in some way to ensure recognition of their legal validity.  This is especially important if there is a dispute about the enforcement of a contract.  The most common kinds of contracts are lease agreements, sale of land agreements, loan and mortgage documents and project documents.  Lao law also requires that contracts are entered into in the Lao language.

For the purposes of notarisation and registration, a Lao language version must be produced.  There are some exceptions to this, for example big project documents entered into with the Government will sometimes explicitly state that they will only be in the English language, but this is an exception to the rule.  As a matter of practice, but not actually required by the law, the Notary Office requires both parties to sign the document in front of Notary Office officials.  This is not always practical, especially if a contract is signed in counterparts.  The Notary Office will accept a representative of the absent party with a power of attorney attesting to the validity of the document.

Leases must be notarised at the Notary Office and registered at the District Office and the District Land Management Authority.

Bank documents such as loan agreements and mortgages must be notarised at the Notary Office and registered at the Vientiane Land Management Authority.

Project documentation must be notarised at the Notary Office and registered at the State Property Management Department of the Ministry of Finance.

Enforcement of Contracts in Laos

The legal system in Laos is evolving rapidly, but it is still not as robust as other jurisdictions.  In the meantime, the enforcement of contractual obligations requires the translation, notarisation and registration of the contracts themselves before courts will be willing to accept submissions in relation to them.  This is different to most other jurisdictions.

This article has been provided by Arion Legal, an Australian law firm, with an office in Vientiane that has been offering international standard legal advice and documentation for foreign investors operating in, or looking to invest in, Laos since 2008.