International Arbitration Law Syllabus
CHAPTER 1: OVERVIEW OF COMMERCIAL ARBITRATION
I. The definition and characteristics of commercial arbitration
The definition of arbitration
Arbitration is defined as "a dispute resolution mechanism by which a third party resolves disputes arising between two or more parties by exercising the jurisdictional power assigned by the disputing parties." This power is voluntarily conferred by the parties through an arbitration agreement, distinguishing it from the compulsory jurisdiction of state courts.
Key elements of arbitration include:
A dispute must exist, typically one that is arbitrable under relevant national laws and international conventions.
The dispute is brought before a third party, known as an arbitral tribunal, composed of one or more arbitrators.
The third party has discretionary power to independently and impartially resolve the dispute, applying chosen legal principles or terms of the contract.
In the context of Vietnamese law, “commercial arbitration” pertains specifically to disputes of a commercial nature, as defined by the Commercial Arbitration Law 2010. This typically includes disputes arising from commercial activities or investor-state disputes if the foreign investment law allows for arbitration.
Characteristics of arbitration
Based on agreement: Arbitration is fundamentally based on the mutual agreement of the parties (as outlined in the arbitration agreement or clause). In the absence of such an agreement, or if it is invalid, the arbitral tribunal has no jurisdiction to hear the dispute. This is often encapsulated by the principle of consent.
Selection of arbitrators: The arbitrators are appointed directly or indirectly by the disputing parties. This allows parties to choose arbitrators with specialized expertise in the subject matter of the dispute, enhancing the quality of the resolution. The process can involve direct nomination, selection from institutional lists, or appointment by a designated authority.
Final and binding: Arbitral awards are final and binding on the parties, much like a court judgment. Unlike court rulings, they are generally not subject to appeal on the grounds of merit. Challenges are limited to specific procedural grounds, as outlined in national arbitration laws, and are aimed at annulment rather than a review of factual or legal conclusions.
No state power: Arbitration is a contractual matter and does not confer state authority on arbitrators. Arbitrators do not possess the coercive powers of state courts (e.g., to compel attendance or enforce awards directly). Enforcement of an arbitral award typically requires an application to a court of law.
Confidentiality: Arbitration proceedings are generally confidential by default, unless the parties agree otherwise or a legal requirement dictates disclosure. This characteristic is often a significant reason parties choose arbitration, as it protects sensitive commercial information and reputations.
2.1 Distinction between arbitration and dispute resolution by state courts
Origin: Arbitration stems from the parties' agreement (contractual basis), while judges derive their power from law (statutory basis), granting them inherent state authority.
Procedural Differences: Arbitration follows procedures agreed upon by the parties or prescribed by the chosen arbitral institution, allowing for flexibility and customization. Courts, conversely, must strictly comply with rigid legal protocols and civil procedure codes.
Representation: Judges represent the state and exercise public judicial power; arbitrators, on the other hand, do not, instead acting based on the private mandate given by the disputing parties.
2.2 Distinction between arbitration and mediation
Mediation involves a neutral third-party mediator who facilitates negotiation between parties to reach a mutually acceptable settlement, but does not possess the authority to decide the outcome or impose a binding resolution.
Legal Framework: In Vietnam, mediation can be conducted under various statutes, including Decree No. 22/2017/ND-CP, which governs commercial mediation and promotes amicable dispute resolution.
Other Resolution Methods: There are various types of alternative dispute resolution (ADR) methods, such as conciliation, expert determination, and Dispute Adjudication Boards (DABs), which are commonly used in large construction projects to prevent disputes from escalating.
(*) What are the Dispute Adjudication Board (DAB) and the Dispute Board (DB)?
Dispute Adjudication Boards (DABs) and Dispute Boards (DBs) are forms of Alternative Dispute Resolution (ADR) commonly used in long-term contracts, particularly in the construction and infrastructure sectors, to prevent and resolve disputes on an ongoing basis during the project execution:
Dispute Board (DB): This is a standing body of one or three neutral individuals established at the outset of a project to assist the parties in avoiding and resolving disputes as they arise. DBs promote early resolution and can act in various capacities:
Dispute Review Board (DRB): The most common type, where the board provides non-binding recommendations or opinions on disputes. If neither party rejects the recommendation within a specified period, it becomes contractually binding.
Dispute Adjudication Board (DAB): This type issues decisions that are immediately binding on the parties, although they can be challenged later in arbitration or litigation. The purpose is to ensure that work continues without interruption, as funds might be withheld if a party does not comply with a DAB decision.
Combined Dispute Board: This form combines characteristics of both DRBs and DABs, offering flexibility in how disputes are handled.
Dispute Adjudication Board (DAB): As mentioned above, a DAB is a specific type of Dispute Board (DB) that provides binding decisions during the project lifecycle. This is particularly crucial in construction projects governed by FIDIC (Fédération Internationale des Ingénieurs-Conseils) contracts, where DABs are mandated to deliver timely decisions that allow project work to proceed, minimizing delays and cost overruns. Parties are obligated to comply with a DAB decision, even if they intend to challenge it in subsequent arbitration.
2.3. Distinction between arbitration and other ADR methods
The distinction between arbitration and other Alternative Dispute Resolution (ADR) methods is primarily understood through the classification of arbitration into various types, highlighting its structured and formalized nature compared to other methods:
By Stability and Operational Organization:
Permanent (Institutional) Arbitration: Conducted under the rules and administration of an established arbitration institution (e.g., VIAC, ICC, LCIA), which provides support and maintains arbitrator lists.
Ad Hoc Arbitration: Established by the parties for a specific dispute, requiring them to manage all procedural aspects, offering greater flexibility but demanding more party involvement.
By Origin:
Foreign Arbitration: Where the seat of arbitration is outside Vietnam or involves foreign parties.
Domestic Arbitration: Where the seat is within Vietnam, typically involving only Vietnamese parties.
By Dispute Type:
Commercial Arbitration: Specifically governed by the 2010 Commercial Arbitration Law in Vietnam, covering contracts, investments, and business-related matters.
Non-commercial Arbitration: Typically not subject to arbitration, such as family law or criminal matters.
By Basis of Dispute:
Arbitration ex aequo et bono (in equity): Decisions based purely on fairness.
Arbitration in law: In Vietnam, this is primarily recognized, meaning arbitrators decide disputes strictly in accordance with applicable legal rules and principles.
These classifications define the specific frameworks and approaches that characterize arbitration, setting it apart from other, less formally structured ADR mechanisms, such as conciliation or expert determination. This ensures that parties involved in arbitration can expect a more predictable and legally grounded resolution to their disputes.
Classification of types of arbitration
By Stability and Operational Organization:
Permanent (Institutional) Arbitration: This is arbitration conducted under the auspices and rules of an established arbitration institution (e.g., VIAC - Vietnam International Arbitration Centre, ICC, LCIA). The institution administers the case, provides administrative support, and often maintains lists of qualified arbitrators.
Ad Hoc Arbitration: The parties establish an arbitral tribunal at their specific request, without the ongoing administrative assistance of an institution. This type offers greater flexibility but requires the parties to manage all procedural aspects, including arbitrator appointment, evidence rules, and venue, which can sometimes lead to procedural challenges if not well-structured.
By Origin: Consists of foreign arbitration (where the seat of arbitration is outside Vietnam or involves foreign parties) and domestic arbitration (where the seat is within Vietnam and typically involves only Vietnamese parties).
By Dispute Type: Commercial vs. non-commercial arbitration. Commercial disputes are specifically governed by the 2010 Commercial Arbitration Law in Vietnam, which covers contracts, investments, and other business-related matters. Non-commercial disputes, such as family law or criminal matters, are typically not subject to arbitration.
By Basis of Dispute Resolution: Arbitration ex aequo et bono (in equity) vs. arbitration in law. Vietnam primarily recognizes arbitration in law, meaning that arbitrators must decide disputes strictly in accordance with the applicable legal rules and principles, rather than purely on notions of fairness or equity.
II. The history of the development of arbitration
Global History
The historical emergence of arbitration can be traced back to ancient practices, particularly among merchants along trade routes, who sought a quick and private resolution of disputes outside state courts. Significant developments occurred after 1914, marked by the rise of international trade and investment.
Key milestones in international arbitration include the Geneva Protocol (1923), the Geneva Convention (1927) on the Execution of Foreign Arbitral Awards, and, crucially, the New York Convention (1958) on the Recognition and Enforcement of Foreign Arbitral Awards, which standardized the enforcement of awards globally and is widely considered the cornerstone of international commercial arbitration.
Vietnamese History
Arbitration in Vietnam dates back to the colonial era, with early informal mechanisms in place. Modern arbitration legislation began to emerge after unification, transitioning through various legislative frameworks, including the Ordinance on Commercial Arbitration (1994) and subsequent amendments, culminating in the comprehensive Commercial Arbitration Law of 2010, which aligned Vietnamese law more closely with international best practices, such as the UNCITRAL Model Law.
III. The source of law governing arbitration
National Law Sources
The primary national law source is the Commercial Arbitration Law of 2010, which is applicable to commercial disputes in Vietnam. Additionally, procedures for handling arbitration-related matters in courts are outlined in the Code of Civil Procedure 2015 and further detailed in related judicial resolutions, such as Resolution No. 01/2014/NQ-HDTP from the Judicial Council of the Supreme People's Court, providing guidance on the application of the Commercial Arbitration Law.
International Law Sources
Relevant international treaties include the New York Convention (1958), to which Vietnam is a signatory, governing the recognition and enforcement of foreign arbitral awards. Other influential instruments include the European Convention on International Commercial Arbitration (1961) and the UNCITRAL Model Law on International Commercial Arbitration (often adopted or inspiring national laws), which promotes uniformity in international arbitration legislation.
(*) Tiếng Anh Pháp Lý :
VIAC - Vietnam International Arbitration Centre: Trung tâm Trọng tài Quốc tế Việt Nam
Trung tâm trọng tài lớn nhất và nổi bật nhất tại Việt Nam, giải quyết các tranh chấp thương mại trong nước và quốc tế có liên quan đến Việt Nam.
ICC - International Chamber of Commerce: Tòa Trọng tài Quốc tế/Phòng Thương mại Quốc tế
Một trong những tổ chức trọng tài hàng đầu thế giới, cung cấp các quy tắc trọng tài được kính trọng và dịch vụ quản lý vụ kiện cho các tranh chấp quốc tế phức tạp.
SIAC - Singapore International Arbitration Centre: Trung tâm Trọng tài Quốc tế Singapore
Một tổ chức trọng tài toàn cầu hàng đầu, trung lập và phi lợi nhuận tại châu Á, nổi tiếng về sự hiệu quả và các quy tắc hiện đại.
LCIA - London Court of International Arbitration: Tòa Trọng tài Quốc tế London
Một trong những tổ chức trọng tài quốc tế lâu đời và được kính trọng nhất trên thế giới, nổi tiếng với sự quản lý chặt chẽ và giám sát quy trình trọng tài.
DAB - Dispute Adjudication Board: Ban Phân xử Tranh chấp
Ban hành Quyết định có hiệu lực ràng buộc tạm thời (provisonally binding decisions) mà các bên phải tuân thủ ngay lập tức, trừ khi có bên gửi thông báo không hài lòng và đưa vụ việc lên Trọng tài hoặc Tòa án.
DB - Dispute Board: Ban Xử lý Tranh chấp
Là tên gọi chung cho các loại Hội đồng giải quyết/phòng tránh tranh chấp. Nó bao gồm cả DAB và DRB (Dispute Review Board - Ban Xem xét Tranh chấp, nơi ban hành khuyến nghị không ràng buộc). DB thường được thành lập ngay từ đầu dự án để theo dõi, phòng ngừa và giải quyết tranh chấp nhanh chóng.
DAAB - Dispute Avoidance/Adjudication Board: Ban Phòng ngừa/Phân xử Tranh chấp
Là thuật ngữ mới được sử dụng trong phiên bản FIDIC 2017, nhấn mạnh thêm vai trò phòng ngừa (Avoidance) tranh chấp, ngoài vai trò phân xử.
CHAPTER 2: THE ARBITRATION CLAUSE
I. Definition, Characteristic, and Meaning of the Arbitration Clause
Definition of an Arbitration Clause
An arbitration clause is fundamentally a consensual contractual stipulation, either embedded within a primary contract or existing as a separate agreement, through which parties agree to submit disputes to arbitration rather than traditional court litigation. As articulated in Article 3 of the Commercial Arbitration Law, it represents a mutual understanding between parties for the resolution, through arbitration, of conflicts that have arisen or may arise in the future from their legal relationship. This agreement serves as the foundational legal basis for vesting arbitral tribunals with jurisdiction.
The meaning of the Arbitration Clause
The primary significance of an arbitration clause lies in its jurisdictional effect. According to Article 6 of the Commercial Arbitration Law, a valid arbitration clause divests state courts of their jurisdiction over the disputes it covers, channeling them exclusively to the chosen arbitral forum. This establishes the parties' unequivocal intent to opt for a private dispute resolution mechanism, thereby ensuring finality and often greater speed and confidentiality compared to judicial processes. It is a critical precondition for the commencement of any arbitration proceedings.
Characteristics of Arbitration Clauses
Determinative Scope: The clause must clearly define the range of disputes it intends to cover. While often broadly drafted to encompass "any dispute arising out of or in connection with" a contract, the specific wording is crucial. Ambiguity can lead to challenges regarding the arbitrability of certain claims. The parties have the autonomy to delineate the scope, but an overly vague clause might impede its operational effectiveness and give rise to jurisdictional contests.
Principle of Separability (Autonomy): A cornerstone of international arbitration law, this principle holds that an arbitration clause is legally distinct and independent from the main contract in which it resides. Even if the primary contract is alleged to be invalid, terminated, or non-existent, the arbitration clause itself remains unaffected unless specifically challenged on grounds pertinent to the clause itself. This allows the arbitral tribunal to rule on its own jurisdiction, including challenges concerning the validity of the main contract, a doctrine known as Kompetenz-Kompetenz.
II. Classification of Arbitration Clauses
Based on when the dispute arose:
Clauses for Future Disputes: These are pre-dispute agreements, typically inserted into contracts at the time of their formation, stipulating that any disagreements that might arise during the contract's execution or due to its breach will be resolved through arbitration. They embody a proactive approach to dispute management.
Clauses for Existing Disputes (Ad Hoc Submission Agreements): These are agreements entered into after a dispute has already crystallized between the parties. They are specifically crafted to refer an already-identified conflict to arbitration. Such agreements are often more detailed regarding the specific issues to be arbitrated and the appointment of arbitrators.
Based on the form of support of Arbitration Clauses:
Incorporated Clauses: The most common form, where the arbitration agreement is a specific article or provision within a larger commercial contract (e.g., a sales contract, construction agreement, or investment treaty).
Standalone Agreements: Less frequent, these are discrete contracts that serve solely to establish an arbitration mechanism. They are often used for existing disputes or for complex, multi-party relationships where a separate overarching dispute resolution agreement is preferred. Regardless of form, they frequently include details such as the number of arbitrators, the seat of arbitration, and the language of the proceedings.
III. Governing Law of the Arbitration Clause
Determination of Applicable Law
The validity, interpretation, and effects of an arbitration clause are primarily governed by the law expressly chosen by the parties for the arbitration agreement itself. This choice is usually distinct from the law governing the substantive contract.
Default Rules for Lack of Choice:
In the absence of an explicit choice of law by the parties for the arbitration clause, courts and tribunals typically resort to conflict-of-laws rules to determine the applicable law. Common approaches include:
The law of the seat of arbitration (lex arbitri) also often governs the procedural aspects of the arbitration.
The law governing the main contract.
The law with which the arbitration agreement has the closest connection.
Consistency in the choice of law helps prevent issues of enforceability and interpretation.
IV. Conditions for Validity of the Arbitration Clause
Essential Elements for Enforceability:
For an arbitration clause to be legally valid and enforceable under Article 18 of the Commercial Arbitration Law (and generally under international arbitration principles), several conditions must be met, the absence of which can render the clause void or unenforceable:
Arbitrability of the Subject Matter: The dispute must be one that is capable of being resolved by arbitration under the applicable national laws (e.g., certain public law disputes, criminal matters, or specific consumer disputes might be deemed non-arbitrable).
Capacity of the Parties: All parties entering into the arbitration agreement must possess the legal capacity to do so (e.g., not minors, not legally incompetent, and duly authorized corporate representatives).
Adherence to Formal Requirements: Arbitration agreements typically must be in writing. This requirement can be fulfilled by a clause in a contract, an exchange of letters, faxes, emails, or other means of telecommunication providing a record of the agreement.
Absence of Vitiating Factors: The agreement must be free from elements that would render it invalid, such as coercion, fraud, misrepresentation, or undue influence in its formation.
No Legal Prohibition: The arbitration clause must not violate any mandatory provisions of law or public policy of the jurisdiction whose law governs the clause or where enforcement is sought. For instance, specific legislative acts might prohibit arbitration for certain types of disputes.
V. Execution of the Arbitration Clause
When the arbitration clause is legally established, it must be respected and executed by the parties. However, there are cases where it is unclear or not applicable.
Clarity of the arbitration agreement
According to paragraph 2 of Article 7 of Resolution 01/2014/NQ-HDTP, in the absence of clarity regarding the arbitration clause, the provisions of the Civil Code shall apply.
Paragraph 5 of Article 43 of the LAC provides that in cases where the parties have an arbitration agreement that does not specify the form of arbitration or does not determine a specific arbitration institution, in the event of a dispute, the parties must, once again, agree on the form or institution. If no agreement can be reached, the choice will be made at the applicant's request.
The inoperative arbitration clause
This occurs when the arbitration clause is valid but cannot be executed in reality. Under Article 4 of Resolution No. 01/2014/NQ−HDTP:
The chosen institution ceased operations without a successor, and the parties cannot agree on another center.
Force majeure or objective obstacles prevent the selected arbitrator from participating, and no replacement can be agreed upon.
An ad hoc arbitrator or the center refuses the appointment, and no replacement is agreed upon.
Parties agree on a center but choose rules of another center that do not allow their use, without agreement on alternative rules.
In consumer disputes under Article 1717 of the LAC, the consumer does not agree to settle the dispute via arbitration when it arises.
CHAPTER 3: ARBITRATION PROCEDURE
I. Petition, Counterclaim, Defense, and Limitation Period
Limitation Period
A 2-year limitation period generally applies to the submission of a petition to initiate arbitration, as stipulated by Article 33 of the Commercial Arbitration Law. This period typically begins from the date the claiming party knew or should have known that their legitimate rights and interests were violated.
The Petition
The petition is a vital document for initiating arbitration proceedings. It must include essential information: the date of submission, full names and addresses of the parties, a concise summary of the substance of the dispute, a clear statement of grounds with supporting evidence, specific requests for relief, and, if applicable, the proposed arbitrator(s). Completeness and accuracy are crucial for swift processing.
Counterclaim & Defense
Counterclaims, assertions made by the respondent against the claimant, must be submitted together with the defense statement within the specified timeframes. Article 35 also outlines details for the defense, including pleas regarding the arbitral tribunal's jurisdiction (e.g., challenging the validity of the arbitration agreement).
II. Constitution of the Arbitral Tribunal
Arbitrator Criteria
To serve as an arbitrator, an individual must possess full civil capacity, hold a university degree, and have a minimum of 5 years of relevant professional experience in fields such as law, economics, or engineering. Exceptions may apply for highly specialized experts approved by the arbitration center. Crucially, arbitrators must be impartial, independent, and free from conflicts of interest.
Rights and Obligations of Arbitrators
Rights: Include the right to collect fees for their services, participate in internal activities of the arbitration center, and decline an appointment under specific circumstances.
Obligations: Encompass acting impartially and independently, maintaining confidentiality of proceedings and awards, ensuring due process, and adhering to ethical standards to safeguard the integrity of the arbitral process.
III. Seat and Language for the Arbitration Proceedings
Seat of Arbitration
The seat of arbitration is a critically important legal concept, determining the supervisory court for challenges to the award (e.g., annulment) and often the procedural law governing the arbitration (lex arbitri). It is determined by party agreement or, in the absence of such agreement, by the decision of the arbitral tribunal.
Language
Generally, the language of the arbitration proceedings in Vietnam is Vietnamese. However, parties are free to agree otherwise, especially in disputes involving foreign elements, to use another language (e.g., English). If other languages are used, translation services for documents and oral testimonies may be required.
IV. Law Governing Arbitral Procedure
The national law of the seat of arbitration typically applies for procedural guidance (lex arbitri), regulating matters such as the composition of the tribunal, evidence rules, and the form of the award. In disputes involving foreign elements, aspects related to the merits of the case (substantive law or lex causae) may be governed by a foreign law chosen by the parties or determined by conflict-of-law rules.
V. Reconciliation and Mediation
Pre-Arbitration Mediation
Parties may include specific mediation clauses in their contracts, requiring them to attempt mediation before escalating to arbitration. Direct arbitration is permissible if a party fails to comply with these procedural requirements for mediation or if mediation is unsuccessful. Such clauses are often referred to as multi-tiered dispute resolution clauses.
Mediation During Arbitration
Mediation is permitted at any stage of arbitration proceedings, as per Article 38. If parties successfully resolve their dispute through mediation, the settlement agreement can be recorded as a consent award by the arbitral tribunal, which then has the same binding effect as a regular award.
VI. Arbitration Hearing
Preparation for Hearing
The date and venue for the arbitration hearing are determined by the parties' agreement or, failing that, by the arbitral tribunal. Arbitrators are typically required to summon parties within a specified timeframe (e.g., 30 days) before the hearing. Pre-hearing conferences or case management discussions are common to streamline the process.
Participants
Direct participation of the parties is allowed. Parties may also be represented by attorneys (local or foreign-qualified, depending on regulations) or invite witnesses and experts to provide testimony and evidence, ensuring proper legal representation and factual presentation.
Hearing Conduct
The hearing is governed by the chosen arbitration rules (institutional or ad hoc rules). Arbitrators have significant discretion in conducting the hearing, including managing evidence presentation and cross-examination, and can suspend hearings for valid reasons, such as the need for further evidence or settlement discussions.
VII. Arbitration Costs
Definition
Arbitration costs, as defined in Article 34, typically include the fees of arbitrators, administrative costs of the arbitration institution, expert fees, witness travel expenses, legal fees of the parties, and other expenses related to the proceedings (e.g., venue rental and translation services).
Cost Levels
Cost levels are primarily determined by the arbitration center or tribunal based on various factors. These factors include the financial value of the dispute, the complexity of the legal issues, the amount of time expended by the arbitrators, and the number of arbitrators involved.
Cost Responsibility
Generally, costs are borne by the losing party, adhering to the "cost follows the event" principle. However, variations are permissible based on the parties' agreements or the tribunal's discretion, which might allocate costs proportionally to each party's success on different claims.
VIII. Decision to Settle the Dispute
Termination Situations
The arbitration proceedings may terminate under specific enumerated conditions, such as the death of a party (if the dispute is not assignable), withdrawal of claims by the claimant, settlement reached by the parties, or when the object of the dispute no longer exists, as provided for in Article 59 of the Commercial Arbitration Law.
Consequences of Termination
Termination typically results in the issuance of an order or a consent award, and it generally prohibits the re-initiation of similar claims between the same parties under similar circumstances, ensuring finality.
CHAPTER 4: THE ARBITRAL AWARD
I. Definition and Content of an Arbitral Award
Definition
An arbitral award is defined as a decision that fully resolves the dispute, issued by the arbitral tribunal, as per Article 3 of the Commercial Arbitration Law. It constitutes the final determination of the parties' rights and obligations in relation to the dispute.
Content
An arbitral award must include specific details as per Article 61, such as: the full decision on the merits, identification of participating parties and their representatives, a summary of factual findings and legal reasoning, a clear allocation of arbitration costs, specified timeframes for compliance, and the signatures of all arbitrators. Dissenting opinions may also be appended.
II. Effect of the Arbitral Award
Final nature
Arbitral awards are generally final and binding on the parties from the date of issuance. They are not subject to appeal on the merits to a higher court, except in exceptional cases where the parties have agreed to an appellate arbitration mechanism (which is rare).
Appeals
Appeals against the substance of the award are generally prohibited by local arbitration laws and international conventions (e.g., the New York Convention), limiting avenues for challenge to annulment proceedings based on procedural irregularities or grounds that impugn the integrity of the arbitral process, rather than the correctness of the decision.
III. Rectification and Explanation of the Arbitral Award
Rectification
Rectification of an award is permitted solely for technical errors, such as computational mistakes, clerical errors, or typographical errors. A request for rectification must typically be submitted to the arbitral tribunal within a specific timeframe (e.g., 30 days) from the date of receipt of the award.
Completion and Explanation
Arbitrators can, upon request or on their own initiative, supplement an award regarding claims presented in the proceedings but omitted from the award. They can also provide explanations for specific points of the award. However, arbitrators are generally not bound to modify the substance of their decision outside these specific requests for clarification or completion.
IV. Registration of the Arbitral Award
Registration Requirement
Ad hoc arbitral awards, those not administered by an institution, must typically be registered with a competent court within a specified period (e.g., one year) to facilitate enforcement. Awards issued by permanent arbitration institutions do not usually require separate registration, as their institutional framework often provides for direct enforceability.
V. Annulment of the Arbitral Award
Grounds for Annulment
Specific grounds for annulling an arbitral award are outlined in Article 68 of the Commercial Arbitration Law and often align with those in the UNCITRAL Model Law. These grounds typically include: lack of jurisdiction of the tribunal, invalidity of the arbitration clause, a party's incapacity, serious procedural irregularities (e.g., denial of due process), fraud, non-arbitrability of the subject matter, or conflict with public policy.
Procedure for Annulment
Applications for annulment (setting aside) must be submitted to the appropriate national court (e.g., the court at the seat of arbitration) within a strict 30-day timeframe from the date of receipt of the award or from the date a rectifying/supplementary award was received.
Consequences of Annulment
Annulment results in the invalidation of both the arbitral award and, in some cases, the underlying arbitration agreement corresponding to the dispute. This means the award cannot be enforced, and depending on the ground for annulment, the parties may need to re-arbitrate or litigate the dispute in court.
VI. Enforcement of the Arbitral Award
An arbitral award, once final, is enforced as a ruling of law beginning on its issue date. Enforcement proceedings are typically handled by state courts. Enforcement can be suspended if an application for annulment has been filed and is pending before a competent court.
CHAPTER 5: ENFORCEMENT OF A FOREIGN ARBITRAL AWARD
I. Definition of a Foreign Arbitral Award
A foreign arbitral award is generally defined as an award rendered in the territory of a state other than the state where its recognition and enforcement are sought. Its classification is primarily based on criteria established by international conventions, most notably the New York Convention (1958), which emphasizes the territoriality of the award.
II. Legal Basis for Recognition and Enforcement
New York Convention Application
The New York Convention (1958) is the primary international legal instrument governing the recognition and enforcement of foreign arbitral awards globally, applicable only to commercial disputes between signatory states. Articles I and III of the Convention define its scope and the general obligation to enforce awards.
Civil Procedure Code Application
The Civil Procedure Code 2015 of Vietnam guides the enforcement for foreign awards in situations not covered by the New York Convention (e.g., if the award is from a non-signatory state with which Vietnam has bilateral treaties, or based on principles of reciprocity).
III. Meaning of Recognition and Enforcement
Recognition
Recognition refers to the state's official acknowledgment of a foreign arbitral award as valid and binding, giving it legal effect within its jurisdiction, usually as if it were a domestic judgment.
Enforcement
Enforcement refers to the actual execution of a recognized arbitral award through the state's judicial system, enabling the successful party to compel the losing party to fulfill the obligations stipulated in the award (e.g., payment of damages). This process requires prior recognition by the enforcing state.
IV. Conditions and Procedures for Recognition and Enforcement
Conditions
For a foreign arbitral award to be recognized and enforced, specific conditions must be met. These often include the requesting party's residence, the award's enforceability in its state of origin, and the capability for enforcement on Vietnamese territory, as outlined in Article 425 of Vietnam's Civil Procedure Code and the New York Convention.
Application Procedure
The application procedure involves submitting a formal request for recognition and enforcement to the competent court, along with the required documentation. This typically includes the original or a certified copy of the arbitration agreement, the arbitral award itself, and any necessary translations. Timelines and specific forms are prescribed by national law.
V. Grounds for Refusal of Recognition and Enforcement
Arbitration Clause Issues
Refusal may occur if there are issues with the arbitration clause itself, such as a party being under some incapacity, or if the arbitration agreement is invalid under the law to which the parties subjected it, or, failing any indication to the contrary, under the law of the country where the award was made.
Procedural Grounds
Refusal can also be based on procedural grounds, such as non-compliance with proper notification of the appointment of an arbitrator or of the arbitration proceedings, or inability of a party to present their case, thereby violating fundamental procedural rights as per the Civil Procedure Code and the New York Convention.
Excess of Power
Grounds for refusal include instances where the arbitral tribunal's decision extends beyond the scope of the arbitration agreement or addresses matters not submitted to arbitration.
Effect Issues
Enforcement may be denied if the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.
Inarbitrability Grounds
Awards may be refused enforcement if the subject matter of the dispute is considered non-arbitrable under the laws of the country where recognition and enforcement are sought (e.g., certain family law or criminal matters).
Policy Grounds
Enforcement can be refused if the recognition or enforcement of the award would be contrary to the public policy or fundamental legal principles of Vietnam, serving as a protective measure for basic legal standards.