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COMMERCIAL ARBITRATION

OUTLINE:

GENERAL PROVISION

ARBITRATION AGREEMENT

PROCESS OF INSITUTING PROCEEDING

SETTING ASIDE ARBITRAL ARWARDS


I. GENERAL PROVISION

1. Concept and characteristics

2. Competence to resolve disputes

3. Principle and condition for disputes resolution

4.Language and applicable law


1. CONCEPT AND CHARACTERISTICS

 A) COMMERCIAL ARBITRATION’S CONCEPT


Commercial arbitration = dispute resolution
method agreed by the parties and conducted in
accordance with the provisions of this Law
( LOCA part 3)
1. CONCEPT AND CHARACTERISTICS

 B) CHARACTERISTICS
1. CONCEPT AND CHARACTERISTICS

 B) CHARACTERISTICS
1) A type of non-governmental organization:
 The one who shares government’s task in removing social
disputes, specifically in commercial disputes
1. CONCEPT AND CHARACTERISTICS

 B) CHARACTERISTICS
2) An arbitral award shall be final:
The parties can not appeal to any dispute resolution entities

 Arbitration takes advantage of


resolving disputes easily.
1. CONCEPT AND CHARACTERISTICS
 B) CHARACTERISTICS
3) Ensuring each parties self- determination will be
respected:
For example, each parties have the right to choose:

Arbitrator

Place for dispute resolution

Rule and legislations applied to


commercial disputes
ARBITRATORS

 Qualification: Article20
 Having full legal capacity; university qualification and at least 5 years’ work
experience
 Expert with highly specialized qualification and considerable practice experience
 Cant be judge, prosecutor, investigator... Or person under criminal charge
 Arbitration center
 Have function of organizing and co -ordinating activities of dispute resolution
institutional arbitration
2. COMPETENCE TO RESOLVE DISPUTES
2. COMPETENCE TO RESOLVE DISPUTES

1.Disputes between parties arising from commercial


activities.
2.Disputes arising between parties at least one of whom is
engaged in commercial activities.
3.Other disputes between parties which the law stipulates
shall or may be resolved by arbitration.
(Art 2 – LOCA)
2. COMPETENCE TO RESOLVE DISPUTES

1. Commercial activities ?
 = activities for the purpose of generate profit
including:

Sales and
purchases of
goods

Provides
service
Commercial promotion and other
activities for the profit purposes
Investment
2. COMPETENCE TO RESOLVE DISPUTES

2. At least one engaged in commercial activities:


Example: A sign a contract with company B to buy a house,
after that, they have some disputes:
 Company B: having commercial activities
 This person A: just buy house for living
 Not encounter commercial activities

 This dispute can be brought in to commercial


arbitration
2. COMPETENCE TO RESOLVE DISPUTES

3. Other stipulates shall or may be resolved by arbitration


1. Disputed shall resolved by arbitration if the parties have an
arbitration agreement
2. Arbitration agreement may be make either before or after
a disputes arises
(Art 5 – LOCA)

 It depends on the contract they signed.


3. PRINCIPLE AND CONDITION FOR DISPUTES
RESOLUTION

Principle for resolving dispute


Art 4 - LOCA
 Arbitrator must:
 Respect agreement of parties
 parties negotiate with each other to reach
agreement to solve the disputes.

 Independent, objective, comply with the provisions of law.


nobody can intervene arbitration’s work, arbitral award
based on majority vote (Art 60)
3. PRINCIPLE AND CONDITION FOR DISPUTES
RESOLUTION
3. Parties in dispute shall have equal right and obligations.
Arbitration tribunals are responsible to facilitate the parties to
exercise their right and discharge their obligation .

4. Resolution should be conducted in private, unless otherwise


agree by parties.
Arbitrator must keep the secrets ( everything related to dispute )

5. An arbitral award shall be final.


 Parties must follow (voluntary carrying out or be enforced – Art
65,66) (excluded case: arbitral award be set aside – Art 68)
3. PRINCIPLE AND CONDITION FOR DISPUTES
RESOLUTION

Condition for dispute resolution Art 5 - LOCA


1. Exist arbitration agreement  dispute can be brought to
arbitration.

2. If one of the parties dies or loses legal act capacity 


arbitration agreement remains against the heir or legal
representative, unless otherwise agreed by the parties

3. If one of the parties is organization – not exist anymore 


arbitration agreement remains against organization which
succeeds to the right and obligation of such former
organization, unless otherwise agreed by the parties.
4.LANGUAGE AND APPLICABLE LAW

Language (Art 10 – LOCA)


-Vietnamese
Dispute -If a party cannot use
without Vietnamese, then it will use
foreign an interpreter to translate
element into Vietnamese

Dispute - Agreed by parties


with
foreign -No agreement of parties
element  Decided by arbitration
tribunal
4.LANGUAGE AND APPLICABLE LAW

Applicable law (Art 14 – LOCA)

DISPUTES WITHOUT A DISPUTES WITH A LAW OF VN/ CHOSEN LAW


FOREIGN ELEMENT FOREIGN ELEMENT DOES NOT CONTAIN
SPECIFIC PROVISION

• Law chosen by parties


• Law of Vietnam • Parties do not have an • International custom
agreement: the most
appropriate law
II. ARBITRATION AGREEMENT
1. Form of Arbitration Agreement

2. Right of consumers to select dispute


resolution method

3. Void arbitration agreement

4. Independence of arbitration agreement


II. ARBITRATION AGREEMENT
1.Form of Arbitration Agreement
 An abitration agreement may be in the form of an
arbitration clause in a contract or it may be in the
form of a separate agreement.
(Art.16)
II. ARBITRATION AGREEMENT

1.Form of Arbitration A greement


 Must be IN WRITING:
a) An agreement established via an exchange between the parties by
telegram, fax, telex, email or other form prescribed by the laws;
b) An agreement established via the exchange of information in
writing between the parties;
c) An agreement prepared in writing by a lawyer, notary or competent
organization at the request of the parties;
d) Reference by the parties during the course of a transaction to a
document such as a contract, source document, company charter or
other similar documents which contain an Arbitration Agreement;
e) Exchange of a statement of claim and a statement of defense which
express the existence of an agreement proposed by one party and
not denied by the other party.
 (Art 16 )
II. ARBITRATION AGREEMENT
2. Right of consumers to select dispute resolution
method
Good/ Service provider:
Consumers: Only have the right to
Right to select institude arbitration
arbitration or a court proceedings if the consumer
so consents ( Art 17)
II. ARBITRATION AGREEMENT
3. Void arbitration agreement

 The dispute arises in a sector outside the competence of


arbitration prescribed in article 2 of this Law.
 The person who entered into the arbitration agreement
lacked authority as stipulated by law.

 The person who entered into the arbitration agreement


lacked civil legal capacity pursuant to the Civil Code.
 - The form of the arbitration agreement does not comply
with article 16 of this Law.
( Art 18)
II. ARBITRATION AGREEMENT
3. Void arbitration agreement
One of the parties was deceived, threatened or
coerced during the process of formulation of the
arbitration agreement and requests a declaration
that the arbitration agreement is void.
The arbitration agreement breaches a prohibition
prescribed by law.
 Art 18
II. ARBITRATION AGREEMENT

4. Independence of arbitration agreement


 An arbitration agreement shall exist totally independently
of the contract. Any modification, extension or rescission
of the contract, or invalidity or unenforceability of the
contract shall not result in the invalidity of the arbitration
agreement.
 ( Art 19)
III. PROCESS OF INSTITUTING
PROCEEDING
III. PROCESS OF INSTITUTING PROCEEDING

1. Instituting Proceedings and Counterclaim

2. Establishment of Arbitration Tribunal

3. Preparations

4. Mediation

5. Dispute Resolution Sessions

6. Arbitral Awards
III. PROCESS OF INSTITUTING PROCEEDING

1.Claim and defense statement:

Plaintiff Claim

Defense and counterclaim Defendant


III. PROCESS OF INSTITUTING PROCEEDING

 Instituting proceedings and counterclaim:


o Commenced with a statement of claim from the Plaintiff +
other documents + fees + appoints its arbitrator. (LOCA Art.30)
o The limitation period for initiating proceedings for dispute
resolution by arbitration shall be 2 years from the date of
infringement of legal rights and interests, unless otherwise
stipulated by specialized law. (LOCA Art.33)
o Within 30 days the Defendant must submit a statement of
defense and appoints its arbitrator. ( LOCA Art.35)
o A statement of counterclaim (if any) must be submitted at the
same time. (LOCA Art.36)
III. PROCESS OF INSTITUTING PROCEEDING

2. Tribunal formation
Arbitrator of plaintiff
Arbitrator of defendant OR
Appointed chairman

Establishment of Arbitration Tribunal:


•composition: 1 or more arbitrators. Depends on the agreement?
Without agreement?
• The 2 representing arbitrators elect the chairman of the Tribunal. ( Art.40-41
LOCA 2010)
• In any cases of failure to elect any arbitrators, the chairman of the
arbitration center shall appoint the required arbitrators. ( Art.40-41 LOCA
2010)
III. PROCESS OF INSTITUTING PROCEEDING

 Replacement of an arbitrator (Art 43)


An arbitrator must refuse to resolve a dispute, and the parties shall have the right to
request replacement of an arbitrator resolving the dispute in the following
circumstances:
(a) The arbitrator is a relative or representative of a party;
(b) The arbitrator has an interest related to the dispute;
(c) There are clear grounds demonstrating that the arbitrator is not impartial or
objective;
(d) The arbitrator was a mediator, representative or lawyer for either of the parties
prior to the
dispute being brought to arbitration for resolution, unless the parties provide written
consent
III. PROCESS OF INSTITUTING PROCEEDING
3. Preparation research:
 Preparations:
o The tribunal prepare research on the case; collecting and confirming
proofs, studying the dispute.
o The tribunal has the right to call a meeting with the plaintiff or
defendant to collect opinions .
o Parties have rights and obligations to provide evidence
o Arbitration tribunal shall have rights to request witnesses to provide
evidence, information relevant to the dispute.
o The arbitration tribunal shall have the right, on its own initiative or at the
request of one or both
o parties, to seek expert advice.
o (Art.45,46 LOCA2010 )
III. PROCESS OF INSTITUTING PROCEEDING

Jurisdiction of arbitration t ribunal to summon witnesses (Ar t 47)


 The arbitration tribunal shall have rights at request of both par ties to request witnesses attend
the dispute resolution
 Witness fees: paid by the par ty requesting or shall be as allocated by the arbitration tribunal.
 If a witness fail to attend the session without a legitimate reason, and the absence of such
witness constitutes an obstacle to resolution of the dispute, then the arbitration tribunal may
send a written request to the competent cour t to issue a decision summoning such witness to
attend a session of the arbitration tribunal.
 The chief judge of the competent cour t shall, within seven (7) business days from the date of
receipt of a written request from the arbitration tribunal to summon a witness, assign a judge to
hear and resolve such request. The judge must, within five (5) business days from the date of
being assigned, issue a decision summoning The decision summoning the witness must specify
the name of the arbitration tribunal which
The cour t must immediately send the decision to the arbitration tribunal, to the witness, and also
to the same level procuracy in order for the latter to implement its functions and duties in
accordance with law.
 A witness shall be obliged to strictly implement the decision of the cour t.
 Witness fees shall be paid as stipulated in clause 1 of this ar ticle
III. PROCESS OF INSTITUTING PROCEEDING

Absence Parties (Art 56)


 A claimant who was validly summoned to attend a dispute resolution session but
fails to attend without a legitimate reason or who leaves a session without the
consent of the arbitration tribunal, shall be deemed to have withdrawn its statement
of claim. In such case the arbitration tribunal shall continue the dispute resolution
if the respondent so requests or if there is a counterclaim.
 If a respondent was validly summoned to attend a dispute resolution session but
fails to attend without a legitimate reason or leaves a session without the consent
of the arbitration tribunal, the arbitration tribunal shall continue the dispute
resolution based on currently available materials and evidence.
 The arbitration tribunal may, at the request of the parties, rely on the file to conduct
a dispute resolution session without requiring the presence of the parties .
III. PROCESS OF INSTITUTING PROCEEDING
4. Mediation:
 Article 58 Mediation and recognition of successful mediation.
Request of the parties Conduct a mediation
Reach an agreement
III. PROCESS OF INSTITUTING PROCEEDING
5. Dispute Resolution Sessions:
Arbitration tribunal will decide times and dates, unless
other wise agreed by parties. Summons form will be
forward to the parties 30 days in advance (Art 54)
 Article 55 Composition of and procedures for dispute
resolution sessions
+Shall be conducted in private (otherwise agreed by the
parties)

oAn Arbitration Tribunal


oThe parties in dispute
oThe lawful representatives of the parties, or the
witnesses
III. PROCESS OF INSTITUTING PROCEEDING
5. Dispute Resolution Sessions:
 Article 11 Location for dispute resolution by arbitration
Parties the dispute resolution location (location
may be inside or outside the territory of Vietnam).

 Article 10 Language
oWithout a foreign element: Vietnamese
oWith a foreign element: Language shall be agreed by the
parties
III. PROCESS OF INSTITUTING PROCEEDING
6. Arbitral Awards:
Article 3 Interpretation of terms
oArbitral decision a decision of the arbitration
tribunal during the dispute resolution process.
oArbitral award the decision of the arbitration
tribunal resolving the entire dispute and
terminating the arbitration proceedings.

Article 3 (3.9 & 3.10)


SETTING ASIDE ARBITRAL AWARDS

 Principles for Issuance Arbitral Awards

 Arbitral Awards May be Set Aside


PRINCIPAL FOR ISSUANCE
ARBITRAL AWARD

 Based on its majority vote.

 the opinion of the chairman of the


arbitration tribunal.
SETTING ASIDE ABITRAL AWARDS

 Five cases mentioned in (Art 68.2 LCA 2010)

 Lodging a petition with the competent court within 30 days (Art 69.1
LCA 2010)


CASE IN WHICH ARBITRATION AWARD WILL BE SET
ASIDE
a) There was no arbitration agreement or the arbitration agreement is void;
(b) The composition of the arbitration tribunal was [or] the arbitration proceedings
were inconsistent with the agreement of the parties or contrary to the provisions of
this Law;
(c) The dispute was not within the jurisdiction of the arbitration tribunal; where an
award contains an item which falls outside the jurisdiction of the arbitration tribunal,
such item shall be set aside;
(d) The evidence supplied by the parties on which the arbitration tribunal relied to
issue the award was forged; [or] an arbitrator received money, assets or some other
material benefit from one of the parties in dispute which af fected the objectivity and
impartiality of the arbitral award;
(dd) The arbitral award is contrary to the fundamental principles of the law of
Vietnam.
Art 68. 2
RIGHT TO PETITION FOR ARBITRAL AWARD TO BE SET
ASIDE
1 . A party with suf ficient evidence proving that the arbitration tribunal issued the
arbitral award in any of the cases prescribed in article 68.2 on this Law shall have the
right, within thirty (30) days from the date of receipt of such award, to lodge a
petition with the competent court to set aside the arbitral award. A petition
requesting an arbitral award be set aside must be accompanied by materials and
evidence proving that such petition has [suf ficient] grounds and is lawful.
2. If a petition is lodged out of time due to an event of force majeure, then the
duration of such event shall not be included when calculating the time-limit for
requesting the arbitral award be set aside

Art 69
HEARING BY COURT OF PETITION REQUESTING
ARBITRAL AWARD BE SET ASIDE
 Adjourning a petition for up to 60 days => correcting any errors in the arbitration
proceedings to remove the grounds for setting aside the award (Art 71.7 LCA
2010)

  The decision of the court shall be final and shall be valid for enforcement. (Art
71.10 LCA 2010)
COURT FEES (ART 72)

 Fees for requests to a court to appoint an arbitrator, to order interim relief, to set
aside arbitral awards, to register arbitral awards and any other fees shall be
implemented in accordance with the law on legal and court fees.