Globalization in Vietnam’s market economy is now developing strongly. As trade activities increase, commercial disputes are inevitable. Currently, when commercial disputes occur, in addition to the traditional way of settling in court, the method of resolving serious disputes in trade seems more appropriate. So how Vietnamese law regulates dispute resolution by commercial arbitration will be the content of this article.

JURISDICTION OF COMMERCIAL ARBITRATION IN RESOLVING DISPUTES

Arcording to Article 3.1 – Commercial Law 2005, commercial activities are defined as activities for the purpose of generating profits, including: sale and purchase of goods, provision of services, investment, commercial promotion and other activities for the profit purpose.

The subjects of commercial activities called traders include economic organizations which are legally established (enterprises, cooperatives, etc.) and individuals who conduct commercial activities independently and regularly and make business registration.

 

Arcording to Article 2 – Commercial Abbitration Law 2010, arbitration’s jurisdiction to settle disputes includes the following:

CONDITIONS FOR DISPUTE SETTLEMENT BY ARBITRATION AND ARBITRATION AGREEMENT

Arcording to Article 5 – Commercial Abbitration Law 2010, A dispute shall be settled by arbitration if the parties have an arbitration agreement and this arbitration agreement may be made either before or after a dispute arises. Therefore, having an agreement and this agreement must remains valid is a mandatory condition to resolve a dispute by arbitration.

“Arbitration agreement means an agreement between the parties to settle by arbitration a dispute which may arise or has arisen.” – Article 3.2 – Commercial Abbitration Law 2010.

Arcording to Article 16 – Commercial Abbitration Law 2010, an arbitration agreement may be made in the form of an arbitral clause in a contract or in the form of a separate agreement, but the form must be established in writing.

INVALID ARBITRATION AGREEMENTS

Arcording to Article 18 – Commercial arbitration Law 2010, the invalid cases are specified as follows:

Therefore, in the above cases, the court will have jurisdiction to resolve disputes.

Please note that, arcording to Article 19 – Commercial arbitration Law 2010, arbitration agreement is entirely independent from the contract, so any modification, extension, cancellation, invalidation or nonperformance of the contract will not invalidate the arbitration agreement.

PRINCIPLES OF DISPUTE SETTLEMENT BY ARBITRATION

Similar to resolving disputes by court, resolving disputes by arbitration have principles to follow:

FORM OF DISPUTE SETTLEMENT BY ARBITRATION

In Commercial arbitration Law 2010, there are two forms of dispute settlement by arbitration:

• Institutional arbitration means a form of dispute settlement at an arbitration center under Commercial Abbitration Law 2010 and rules of that arbitration center. So each arbitration center sets its rules of proceedings to settle disputes.
• Ad hoc arbitration means a form of dispute settlement under this Law and the order and procedures agreed by the parties.

In fact, Institutional arbitration is widely used, more popular due to its convenience, saving time and being more feasible.

ARBITRAL AWARDS AND ENFORCEMETN OF ARBITRAL AWARDS

The arbitration council shall issue an arbitral award on the basis of majority vote. In case a majority vote cannot be obtained, an arbitral award shall be issued based on the opinion of the arbitration council’s chairman. An arbitral award is final, takes effect on the date of its signing and cannot be appealed.

The State encourages the parties to voluntarily comply with arbitral awards. Past the lime limit for complying with an arbitral award, if the party to comply with the award fails to voluntarily comply with it and docs not request cancellation of the award under Article 69 of this Law. The party in favor of whom/which the arbitral award is issued may request in writing the competent civil judgment enforcement agency to enforce the award.

For ad hoc arbitration’s awards, at the request of one disputing party or all disputing parties, an award of ad hoc arbitration shall be registered at the court in the place in which the arbitration council issued the award before requesting a competent civil judgment enforcement agency to organize enforcement of such award. The creditor may request in writing the competent civil judgment enforcement agency to enforce the award after it is registered.

APPLICABLE LAWS FOR SETTLEMENT

For a dispute involving no foreign element, the arbitration council shall apply Vietnamese law for settling the dispute.

For a dispute involving foreign elements, the arbitration council shall apply the law selected by the parties. If the parties have no agreement on the applicable law, the arbitration council shall decide to apply a law it sees the most appropriate.

When the Vietnamese law or law selected by the parties contains no specific provisions concerning the dispute, the arbitration council may apply international practices for settling the dispute, provided such application or consequence of such application does not contravene the fundamental principles of Vietnamese law.

CANCELLATION OF ARBITRAL AWARDS

The arbitral award is canceled only by the decision to cancel the arbitral award is reviewed and issued by the Court. Under Article 68 – Commercial arbitration Law 2010, grounds for cancellation of arbitral awards are specified as follows:

• The court shall consider the cancellation of an arbitral award at the request of one of the parties.
• An arbitral award shall be cancelled in any of the following cases:

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E: hung.bui@cnccounsel.com

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This newsletter has been prepared or used for the purpose of introducing or updating customers about issues and/or the development of legal positions in Vietnam. The information presented in this newsletter does not constitute advice of any kind and are subject to change without notice.