Features of dispute resolution by arbitration in Vietnam

Among international commercial activities, disputes are inevitable when there are conflicts and disagreements over rights and obligations between parties in international trade relations. Both public international commercial disputes and private international commercial disputes can be resolved by arbitration. In this article, Viet An Law will represent some features of dispute resolution by arbitration in Vietnam.

Legal basis

• UNCITRAL Model Law;
• Vietnamese Law on Commercial Arbitration 2010.

Arbitration will only proceed with the agreement of the parties

This is the basic principle and the foundation for determining the authority of the arbitrator. This principle is reflected in international treaties on arbitration as well as in the legal system of each country.

According to Clause 1, Article 3 of the 2010 Commercial Arbitration Law:

“Commercial arbitration is a method of dispute settlement agreed upon by the parties and conducted in accordance with this Law.”

Because the arbitrator is a non-state power organization, without natural authority like the Court, only when the parties voluntarily and legally agree will the arbitrator have the arbitration’s jurisdiction in accordance with the provisions of the law.

This principle is also reflected in the fact that the arbitrator has the authority to issue an award only within the scope of the disputed issues agreed by the parties to arbitration.

Arbitration is confidential

• Confidentiality is one of the outstanding advantages and necessary attributes of arbitration, an important reason for disputing parties to choose the method of dispute resolution by arbitration. Confidentiality of arbitration has been stipulated in relevant legal documents and in most arbitration rules of domestic and international arbitration institutions.
• In Vietnam, Clause 4, Article 4 of the Law on Commercial Arbitration 2010 stipulates that dispute settlement by arbitration is conducted in a non-public manner, also in Clause 5, Article 21 requires the arbitrator to keep the content of the dispute confidential that we resolve, except in cases where information must be provided to competent state agencies.
• In arbitration proceedings, all facts and results are not disclosed to the public without the consent of the parties. Arbitration hearings are not public, so apart from the plaintiff and the defendant, the arbitrator only summons other parties when necessary. The arbitrator’s decision and the basis for the arbitrator’s decision will not be made public without the parties’ request.
• This characteristic stems from the need to strictly protect the professional secrets of business people, but the law does not require arbitration sessions to be conducted in public.

Arbitration has high flexibility

Arbitration mode ensures greater freedom of disposition of the parties than the court method, including the right to choose an arbitrator, the place of dispute resolution, the time of proceeding, procedural rules, and language. dispute resolution, applicable laws to resolve disputes,…

About the language used

• Article 22 of the UNCITRAL Model Law provides that the parties are free to agree on the language or languages used in arbitration.
• Article 10 of the Law on Commercial Arbitration 2010 distinguishes between disputes with foreign elements and disputes without foreign elements. For disputes without foreign elements, the language used in arbitration proceedings is Vietnamese; for disputes with foreign elements, disputes in which at least one party is a foreign-invested enterprise, the language used in arbitration proceedings is agreed upon by the parties. If the parties do not agree, the language used is for the Arbitral Tribunal to decide.

Regarding the location for dispute resolution

Dispute settlement shall be conducted at a place freely agreed upon by the parties. Pursuant to the UNCITRAL Model Law, the parties are free to agree on the place of arbitration. If no agreement is reached, the place of arbitration shall be decided by the Arbitral Tribunal on a case-by-case basis.

According to Article 11 of the Law on Commercial Arbitration 2010: “The parties have the right to agree on the location of dispute settlement; in case there is no agreement, the Arbitral Tribunal shall decide. The place of dispute settlement may be within or outside the Vietnamese territory”.

Regarding applicable law

Article 14 of the Law on Commercial Arbitration provides:

• For disputes without foreign elements, the Arbitral Tribunal shall apply Vietnamese law to settle the dispute.
• For disputes involving foreign elements, the Arbitral Tribunal shall apply the law chosen by the parties; if the parties do not agree on the applicable law, the arbitral tribunal shall decide to apply the law which it considers most appropriate.
• If the law of Vietnam or the law chosen by the parties does not have specific provisions relating to the content of the dispute, the Arbitral Tribunal may apply international practices to settle the dispute if the application or consequences. The result of such application is not contrary to the basic principles of Vietnamese law.

Arbitrators are experts with specialized knowledge in many different fields

Different countries have different minimum requirements for arbitrators. In Vietnam, Article 20 of the Law on Commercial Arbitration 2010 sets out general standards for arbitrators:

• Having full civil act capacity as prescribed by the Civil Code;
• Having a university degree and having worked in the field of study for 5 years or more;
• In special cases, experts with high professional qualifications and a lot of practical experience, although not meeting the above requirements, can also be chosen as arbitrators.

Arbitration centers have their standards for their own arbitrators according to the capacity, experience, and expertise of the arbitrators. The arbitrators on the list are proficient in at least one foreign language for international arbitration centers. In addition, arbitration centers can also invite foreign experts to act as arbitrators of their centers, thereby making it more convenient to resolve disputes of an international nature and the parties agree to apply foreign law.

Arbitral award is final and binding on the parties

• Finality is understood to mean that when an award is issued by the Arbitral Tribunal is not subject to review in terms of substantial, appeal or protest, and is enforceable by the parties.
• The arbitrator’s award is final. The final value of an arbitral award under the UNCITRAL Model Law is recognized as binding regardless of the country in which it is declared.
• Clause 5, Article 4 of the Law on Commercial Arbitration 2010 has defined the principles of dispute settlement by arbitration, which clearly stipulates that the arbitral award is final. If one of the parties fails to perform, the other party has the right to request the enforcement of the arbitral award in accordance with the law (Clause 5, Article 61, and Article 66 of the 2010 Law on Commercial Arbitration).

Clients who have difficulties and problems related to features of dispute resolution by arbitration in Vietnam, please contact Viet An Law Firm for advice on the fastest, most accurate, and most effective solution!