AN ARBITRATION AGREEMENT IS VOID IN VIETNAM

When is an arbitration agreement voided? This is one of the questions and confusions of many people in dispute issues resolved by an Arbitration. In some cases, an arbitration agreement will be voided because of its forms and contents. The following essay will help the Client understand more clearly the cases regarding a void arbitration agreement.

I. Understanding a void arbitration agreement

Pursuant to Clause 2, Article 3 of the Law on Commercial Arbitration 2010, an arbitration agreement is an agreement between the parties related to resolving disputes that can arise or have arisen through an Arbitration. This is a dispute resolution method according to the voluntary.

According to Clause 1, Article 5 of the Law on Commercial Arbitration 2010, the parties can agree to the Arbitration before or after arising disputes. 

II. In what cases is the arbitration agreement voided?

Cases of a voided arbitration agreement are cases that disputes arising by the Arbitration cannot be resolved, and such an arbitration agreement isn’t valid. Those cases are stipulated in Article 18 of the Law on Commercial Arbitration 2010, as follows:

• Disputes don’t belong to the competence of the Arbitration;
• Persons establishing the arbitration agreement don’t have the competence;
• Persons establishing the arbitration agreement don’t have civil act capacity(1*);
• There are breaches of agreement forms;
• One of the parties has breaching behaviors.

III. Regulations for the void arbitration agreement

1. Legal basis:

• The Law on Commercial Arbitration 2010;
• The Civil Code 2015;
• Resolution 01/2014/NQ-HDTP guiding the implementation of regulations of the Law on Commercial Arbitration promulgated by the Judicial Panel (2*) of the Supreme People’s Court of Vietnam.

2. Conditions for the arbitration agreement aren’t voided

If the arbitration agreement is established by an incompetent person, however during the processes of establishment, implementation, or arbitration proceedings, a competent person has accepted or has known without opposing, such the arbitration agreement isn’t void.    

IV. Some questions and answers regarding the void arbitration agreement

1. When the parties have agreed upon the arbitration agreement, can they sue in the Court?

For disputes regarding commercial contracts, if the parties of commercial contracts had the arbitration agreement, they could be sued at the Court, except for otherwise provided cases.

2. How are cases of non implementation of arbitration agreements considered?

Cases of arbitration agreements considered non implementable are stipulated, as follows:

• The parties have agreed upon dispute resolution at a particular Arbitration Center (3*), however, such an Arbitration Center has terminated operation without heritance and the parties haven’t agreed upon choosing another Arbitration Center to resolve disputes;
• The parties had a particular agreement on choosing Arbitrators, however, due to any force majeure or objective obstacle, such Arbitrators cannot participate in resolving disputes, or an Arbitration Center or the Court cannot seek Arbitrators according to the parties’ agreement, and the parties haven’t agreed upon choosing another Arbitration Center to resolve disputes;
• The parties had agreement on dispute resolution at a particular Arbitration Center, but they have agreed to apply proceeding rules of another Arbitration Center that are different from those of an agreed Arbitration Center without being allowed to apply by such an agreed Arbitration Center, and the parties haven’t agreed upon choosing replaceable proceeding rules .

3. What does the Client need to perform if the arbitration agreement is voided?

The Client needs to seek out prestigious law firms to receive consultation and support for resolving issues related to void arbitration agreements. This will help the Client avoid obstacles during dispute resolution by the Arbitration. 

These are all information relating to AN ARBITRATION AGREEMENT IS VOID as prescribed by Vietnamese Law. Please don’t hesitate to contact us, if the clients have any further questions.

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Civil act capacity (1*): Civil act capacity is an ability of a subject that is presented by behaviors of such a subject to self-establish and implement the civil rights and obligations as defined by the Law. (resource: Legal English of NPLaw)

Judicial Panel (2*): Judicial Panel is an organization of the Supreme People’s Court of Vietnam that implements positions as the highest trial agency, and simultaneously is an agency that guides Courts to accurately and unitedly apply the Law. ( resource: Legal English of NPLaw)

Arbitration Center (3*): Arbitration Center is an organization that has the function of organizing and coordinating dispute resolution activities through Arbitration.  (resource: Legal English of NPLaw)