07 experiences in dispute resolution at VIAC

This article of “07 experiences in dispute resolution at VIAC” is drawn from CNC’s practical experience with “battlefields” against hundreds of disputes. Naturally, each case would vary in circumstances and depend on different factors. However, with the policy of safeguarding the Client’s interests to the fullest extent, the services provided by CNC are not only based on the extensive professional knowledge but also the combination of practical experience and appropriate strategy.

Recently, CNC’s Team has successfully protected a Client’s request for arbitration with the claim amount of up to 32 billion dong. This is the proof as well as the deserved results for the Client’s faith in CNC’s ability and passion.

A portion of an arbitral award rendered by VIAC[1]

On this occasion, CNC wishes to consolidate the 07 precious experiences in dispute resolution at VIAC, thus providing Client, Internal legal advisors of enterprises, as well as Fellow Legal Practitioners a source of reference.

First, lessons in selection of team of Lawyers with comprehensive and in-depth knowledge on the concerned matter.

Second, lessons in transparent and effective dispute resolution

Third, lessons in keeping the strategy focused and avoiding delay and distraction

Fourth, lessons in clear delineation of roles during the dispute resolution process

Fifth, lessons in preparation for submissions and hearing.

Sixth, lessons in utilization of witness testimony in order to enhance the persuasiveness of arguments

Seventh, lessons in selection of appropriate and professional arbitrator.

Below, CNC shall go into the details of 7 practical experiences during dispute resolution at VIAC

First, selection of team of Lawyers with comprehensive and in-depth knowledge on the concerned matter.

Selection of team of Lawyers with comprehensive and in-depth knowledge on the concerned matter is the first crucial step in dispute resolution at VIAC. In fact, this selection plays a decisive factor in the success of the case.

So, why would Client require a team of lawyers with in-depth knowledge and extensive experience during the dispute resolution at VIAC?

Disputes in each different field would have its own characteristics. For example, in the construction field, dispute resolution does not simply involve the determination of the debt amount and interests, as it also involves the determination of rights and obligations of contractors and employer, extension of time, acceptance and maintenance, etc.

To efficiently address these issues, in addition to solid legal knowledge, the ability to analyze specialized technical documents, such as construction program, variation report, site minutes, contracts and relevant appendices.

A portion of the volume of documents in a dispute at VIAC

Furthermore, with only a brief glance at the enormous volume of documents in a case, which might even be able to fill up the transfer vehicles, Clients could have an idea of the scale of works and challenges that lawyers, especially those in the construction, have to face. To process this enormous volume of information, lawyers are required to not only possess comprehensive professional knowledge, but also extensive experience, which allow them to systematically process the data and extract the core information for fluent and persuasive arguments before the Arbitral Tribunal.

Against the above challenges, CNC also encounter significant difficulties during the initial phase. However, with previous experience of dispute resolution in VIAC and through utilization of honed skills, CNC was able to accurately analyze contract provisions, evaluate complex technical evidence, and put forward effective strategy for the proceedings in order to protect the Client’s interest to the fullest extent.

Therefore, the first lesson regarding dispute resolution at VIAC that CNC would like to share is the selection of a lawyer team with comprehensive and in-depth knowledge on the concerned field, especially construction disputes. The correct selection of lawyer during the initial stage is a fundamental factor that significantly increase the chance of success and allow the Client’s interest to be protected during the dispute resolution process.

Advantages offered by a professional and experienced lawyer team during dispute resolution at VIAC

Second, establishment of a transparent and effective procedural order

Another matter that CNC always put emphasis on during the dispute resolution at SIAC is the establishment of a transparent and effective procedural order. In a legal “battle”, a detailed “map” is the key to victory.

So, what is the importance of a transparent procedural order?

For complex disputes, the establishment of a procedural order is not merely a preparation, instead, it is the foundation that guide the parties to the ultimate objective.

A properly established procedural order ensures the compliance with all of the timeframe regulations, allow parties to manage their submissions so that they are made in an appropriate, timely, and proper manner. At the same time, it also helps reminding parties of any deadlines or opportunities to present their cases as well as prompting the opponent and the Arbitral Tribunal to comply with the specified milestones, thereby saving cost and time spent in the proceeding.

Submissions during the dispute resolution at VIAC | Source: VIART Center

Evidently, the establishment of a transparent and effective procedural order is a vital factor. In practice, CNC always utilizes the experience of dispute resolution at VIAC to set out detailed road map. As such, our Client are always given support on efficient dispute resolution, which helps avoiding delay and unnecessary expenses.

See more on Dispute Resolution at VIAC via the article: Vietnam International Arbitration Center – Dispute Resolution | CNC Vietnam Law Firm Co., Ltd

Third, keeping the strategy focused and avoiding delay and distraction

To achieve the most desirable result, one of the indispensable factors is to keep the strategy focused. After having established a transparent procedural order, maintaining a focused strategy throughout the proceeding also plays an important role in ensuring the efficiency and avoiding delay and distraction.

A focused strategy does not simply mean compliance with the established procedural order, as it also include proactive management of the dispute and a firm grasp of the core issues that would render “misleading” strategy employed by the opponent ineffective. In practice, it’s not uncommon for disputing parties to employ strategies that aim to prolong the proceeding, such as postponement of hearing, replacement of arbitrator, or claims not related to the core disputing issues.

CNC and our Client have encountered those delay tactics in multiple occasions. In one particular case, the opponent requested to consolidate two different disputes and replace arbitrator right before the hearings. With our experience, we were able to recognize that these are simply delay tactics employed by the opponent, as such, we immediately opposed to the request, maintained compliance with the procedural order, and follow the initial strategy.

To be specific, we have opposed these requests based on the laws and VIAC Rules. Pursuant to Article 17, Decree No. 01/2014/NQ-HDTP and Article 15, VIAC Rules, the consolidation of arbitral proceedings could only be performed based on the agreement of the parties. Therefore, even if one of the parties request the consolidation of cases and the arbitration rules allow for such consolidation, such requests remain unfounded if there the other party does not give it consent.

Mr. Le The Hung, the Managing Partner of CNC, shared his experience: “In dispute resolution, perseverance is both a virtue and a key strategy. Experience allows us to see through the strategy of the opponent, and perseverance allow us to stick to and preserve our established strategy until the end”

Mr. Le The Hung – Managing Partner of CNC Law Firm Vietnam Co., Ltd

Without a doubt, perseverance is a crucial factor that allow us to stick to the established strategy, thus avoiding delay and distractions caused by external factor. Only by keeping the strategy focused and unwavering, could we reach a definitive result. By then, whether the result is a win or a loss, the lawyers from both parties could greet other with a smile and offer to each other a handshake as a demonstration of professionalism and respect. After all, behind the is a long and arduous journey in which both parties have made all possible efforts. This is the proof of the importance in keeping the strategy focused and avoiding distraction.

Mr. Le The Hung and a fellow lawyer after an intense legal “battle”

Fourth, clear delineation of roles during the dispute resolution process

One of the crucial strategies that give CNC an advantageous edge in the proceedings, drawing from the experience of dispute resolution at VIAC, is the clear delineation of roles during the dispute resolution process. It should be noted that, this delineation should be made not only among the lawyer team, but also between the lawyers and their Clients.

Internal delineation of roles within the team in charge

After accepting the case, the delineation of roles and responsibilities of each member within the team in charge is a decisive factor that allow the work process to be smooth and efficient. While the number of members may vary depending on the scale and complexity of the case, fundamentally, the following roles are required for an efficient work process

Roles of members within the team in charge of dispute resolution

This clear delineation is particularly important in construction disputes due to the enormous volume of document and diverse and complex information. This allows CNC to avoid circumstances where documents are missing or loss, ensuring all aspects of the case are meticulously addressed, thus enhancing the quality and effectiveness of the proceeding.

Delineation of roles between lawyers and Clients

Aside from the team’s internal cooperation, the delineation of roles and responsibilities between the lawyers and Clients also play a crucial and decisive part in the success of the case.

On one hand, Clients are responsible for the adequate, accurate, and timely provision of documents and materials related to the case. This is the vital foundation that enable lawyers to have a firm grasp of the nature of the case, accurately determine the legal position, and conduct in-depth analysis of the conflicts in the contract, thereby establishing a solid basis to safeguard legitimate rights and interests.

On the other hand, lawyers are fully responsible for conducting in-depth research on the documents provided by the Client, thorough analysis of relevant laws, and recommendation of optimal dispute resolution strategies. Lawyers shall also represent the Clients in the hearings, negotiation sessions, and communication with competent authorities. The lack of tight, synchronized, and transparent coordination by the Client would significantly impede the lawyers in the preparation of sound arguments, thus impacting the performance and ultimate result of the proceeding.

In summary, in all disputes, especially complex ones such as construction disputes, the establishment of clear and detailed delineation of roles, covering both the internal coordination of lawyer team and the cooperation between lawyers and Clients, is an indispensable factor that contribute to the overall strength. The transparency in the roles would not only optimize the work performance but also ensure that all documents and information are processed in a proper manner, which offer a competitive edge and contribute to the success in the preservation of the Clients’ interests at VIAC.

Fifth, preparation for submissions and hearings

At first glance, this matter might sound simple, however, its significance in dispute resolution at VIAC is not to be underestimated. In any legal “battle”, documents and materials are the sharpest “weapons” available, as they are both the basis for preservation of the Client’s interest and the foundation for the Arbitral Tribunal to render a fair and unbiased award. Insufficient preparation would result in the Client lacking firm basis for their claims.

To expand upon the importance of this point, non-contractual damage compensation claims could be used as an example. For these claims to be accepted, Clients need to prove all three of the conditions specified in Article 584, Civil Code 2015 are satisfied, which include: (i) an act of violation of laws; (ii) actual damage has been incurred; and (iii) causality connection between the act of violation and the damage. It should be noted that, just by not satisfying one of these three conditions, the non-contractual damage compensation claim would be exposed to significant risks of being rejected.

For example, in the recent case, although we have successfully defended the main claim of the Client, with the value amounted to 32 billion dongs, however, the accompanying damage compensation claim is not accepted by VIAC. The main cause is because the Client fails to provide sufficient evidence on damage.

To be specific, our Client (Claimant) was successful in proving that the Respondent was liable for the delay in construction completion, which include the failure to provide doors per the required standards and failure to complete the construction on schedule. Such shortcomings were also specified by the Arbitral Tribunal in the award.

However, a crucial issue has caused the damage compensation claim of the Client being rejected. Namely, during the assessment of the costs claimed by the Claimant, while the Claimant has provided all invoices and request for payment, the Arbitral Tribunal reasoned that the Claimant “has failed to furnish proof of actual payment of the above sum… so the actual damage could not be proven”

Issues that need to be proven	Evaluation of the Arbitral Tribunal	Status of the proving
Act of violation of law	Respondent is liable for the delay in construction completion and failure to provide doors per the required standards	✓
Actual damage incurred	Claimant has yet to furnish proof of actual payment of the above sum		X
Causality connection
Non-contractual damage compensation claim	Claim rejected

Summary of the satisfaction of the conditions

As such, the lesson from this case is clear: Even if the Client has incurred actual damage and successful proved the act of violation, if there exist no direct proof of actual damage being incurred, the compensation request would still be rejected. Invoices and requests for payment are simply not adequate, and more concrete proof of damage such as Bank Statement, Payment Order, or other payment documents are required to prove that damage has indeed occurred and incurred by the Client.

This is also the reasons why CNC find the lesson in meticulous and adequate preparation for submissions and hearings during the dispute resolution at VIAC particularly valuable, even the smallest detail in the Client’s claims could have a significant impact. Therefore, all efforts should be made to present a solid case and ensure the claims are proven, as these are the keys to the recognition by the Arbitral Tribunal.

Sixth, utilization of witness testimony in order to enhance the persuasiveness of arguments

Another lesson in dispute resolution at VIAC that allow for all relevant details to be addressed is the proactive collection of testimony from witnesses. During the dispute resolution, the ultimate goal is to help the Arbitral Tribunal to have an objective and comprehensive view of the case. To achieve this, the testimonies given by the witness hold a significance so great that it could be dubbed as indispensable “fragments” for the whole picture to be completed.

First, witnesses help confirming the details and developments relevant to the dispute

Documents are not the only place where objective truth could be found, as testimony given by direct witness or those involved in the project implementation process could help consolidate the findings. In construction disputes, aside from the employer and contractors, there also exist other relevant parties such as the supervision consultants, subcontractors, etc. The testimonies given by these parties could help confirming important details and strengthening the arguments of the disputing parties.

In the recent case, the role of witnesses is especially emphasized. To be specific, we have utilized: (i) reports of consulting units and (ii) reports of the unit responsible for the implementation of Fire Fighting & Prevention Works. These reports are evidence for the contractor’s scope of work and agreed technical standards. Due to these analysis and evaluation, the Arbitral Tribunal has a sufficient basis to understand the nature of the dispute and was able to render an objective arbitral award.

Second, in many cases, expert witness could provide in-depth technical analysis, which help clarify unclear issues to the arbitral tribunal and the disputing parties.

On many occasions, disputes would involve complex technical issues on which neither the Arbitral Tribunal nor the parties have in-depth knowledge. In these cases, expert witnesses, people who have knowledge and extensive on the concerned field, shall provide independent analyses, which allow would help clarify issues such as causes of delay, quality of construction, or compliance with the technical standards.

Particularly, in construction disputes, reports from expert witnesses would not only support the arguments of the parties, but also serve as an important basis for the Arbitral Tribunal to give accurate and unbiased evaluation and award.

See more on witness expert in the article: Expert Witness in Dispute Resolution via Arbitration – CNC | CNC Vietnam Law Firm Co., Ltd

Seventh, selection of appropriate and professional arbitrator

Last but not least, another lesson that CNC always keep in mind during the dispute at VIAC is the selection of appropriate arbitrator who have extensive knowledge on the field of the dispute. Since arbitrator is the holder of the “key” to the success of an arbitration case. Therefore, parties should exercise caution during the selection of arbitrators in addition to consulting with experts well-versed in the matter for the most appropriate decision.

In arbitration, each arbitrator would have his own strength. On one hand, some arbitrators with legal knowledge as their “strong points” would have in-depth knowledge of legal regulations and experience in dealing with complex legal issues. On the other hand, arbitrators with knowledge of specialized fields as their “strong points” would have extensive knowledge on certain fields such as construction, finance, real estate, etc. The selection of arbitrator with “strong points” appropriate to the dispute is extremely important.

Comparison of pros and cons between the selection of arbitrators well-versed in law and arbitrators well-versed in specialized fields during the dispute resolution at VIAC

Depending on the circumstances of the dispute, CNC shall evaluate and provide Client with advice on the selection of the most appropriate arbitrators. Naturally, CNC could achieve this due to the ample experience in dispute resolution at VIAC, and clear understanding of the strength of each arbitrator in corresponding to the characteristics of each type of dispute. In the mentioned case, the determination of the disputes involves not only the issues of payment, but also the legal interpretation and legal application. Based on these, we have advised the Client on the selection of an arbitrator who is well-versed in laws and has experience of addressing similar disputes.

What are disputes on legal interpretation and legal application?

To illustrate, let’s examine the issue of determining the starting point for penalty and damage compensation in this particular case. In most cases, contractor is obligated to complete the work within a specific duration in accordance within the contract. Failure to comply would result in penalty and damage compensation clauses being applied immediately after the expiration of the duration

However, during the implementation process, if a force majeure event were to occur, parties might have to agree on extension of time for completion. This, however, lead to commonly-observed cases where the Employer determines the starting point for penalty and damage compensation based on initially agreed Schedule instead of the extended duration per the extension of time for completion granted to the contractor.

Example on the starting point for penalty and the deadline of the extended duration

This raises some important legal questions, namely (i) Which is the milestone for the determination of legal liabilities (the initial schedule or the extended schedule); (ii) Is the agreement on the starting point for penalty and damage compensation consistent with the current laws; (iii) Among the agreements of the parties, which document is prioritized for the determination of this milestone?

To clarify the above legal issues, a sell and purchase contract in which the Seller is obligated to deliver the goods on 05/02/2025 could be used as an example. Accordingly, on 05/02/2025, the seller could not deliver the goods in accordance with the agreement. This forces the Buyer to agree to give the Seller some additional times to deliver goods, and the new delivery time is determined to be 03/03/2025

With the above example, the date on which the Seller breach the delivery obligations is 06/02/2025 (06/02/2025 is the date of initial delivery delay). The Buyer’s consent to allowing the Seller to deliver goods on 03/03/2025 is merely one of rights of the Buyer to remedy or mitigate the consequences of the breach (delivery delay) in addition to rights to Contract termination, bond confiscation, payment suspension, etc. Therefore, the Buyer has no basis to interpret that only the failure to comply with the extended deadline of 03/03/2025 could be constituted as a breach of delivery obligations.

The difference between the date of obligation breach and the date of obligation completion would not only affect the legality (the Buyer’s right) of the penalty claim, but also the determination of damage arising out of the breach accrued from the date of obligation breach until the date of obligation completion (which is 03/03/2025 in this particular case).

Therefore, to make such an important determination, arbitrators are required to have an extensive knowledge regarding laws on contracts, regulations on the obligations and responsibilities of the contractors, as well as experience in interpretation of construction contract clauses. Fully aware of these matters, and in combination with the experience in dispute resolution at VIAC, CNC advised the Client on the arbitrator in whom trust could be placed.

In summary, parties should choose appropriate arbitrators depending on the nature of each case. If the dispute mainly revolves around legal issues, arbitrators well-versed in law would be the appropriate option. Conversely, if the dispute focuses on technical or specialized issues, arbitrators well-versed in specialized sectors should be prioritized.

Above is the 07 lessons in dispute resolution at VIAC that CNC has always keep in mind and put into application throughout the process of consulting and supporting our Clients.

The efforts of the lawyers, the in-depth understanding of the procedures at VIAC, and the “hard-earned” experience gained from hundreds of cases, are the main sources behind CNC’s strength. With years of experience in dispute resolution at VIAC, CNC is always ready to accompany Client in each step of their dispute resolution process, ensuring professionalism, efficiency, and transparency.

Contact

For more information, please contact:

CNC Vietnam Law Firm Co., Ltd

Address: The Sun Avenue, 28 Mai Chi Tho, Binh Trung Ward, Ho Chi Minh City, Vietnam

Phone: 02862769900

Hotline: 0916545618

Email: contact@cnccounsel.com

Website: cnccounsel

We would be pleased if you were to visit our office, where you can directly exchange with the most appropriate Construction Lawyer for your circumstances. Naturally, if you could not find the time for an in-person meeting, please feel free to contact contact@cnccounsle.com or call (+84-28) 6276 9900

It would be a great honor for Lawyers at CNC to be of service to you, ensuring success and sustainable development of your project.

Managed by

	Le The Hung | Managing Partner Điện thoại: (84) 901 334 192 Email: hung.le@cnccounsel.com
	Kieu Nu My Hao | Associate Phone: (84) 28 6276 9900 Email: hao.kieu@cnccounsel.com
	Nguyen Le Anh Thu | Legal Assistant Phone: (84) 932 705 676 Email: thu.nguyen@cnccounsel.com

 

Disclaimer:

This article was prepared to be used for the purpose of introducing or informing clients about issues and/or developments of legal perspectives in Vietnam. The information presented in this article does not constitute advice of any kind and may be subject to change without prior notice.

 

[1] The dispute related to (i) penalty claim; (ii) damage compensation claim; and (iii) return of the amount paid for works not meeting the requirements specified in the contracts.