Legal regulations related to dispute resolution through arbitration

In the context where business and commercial relationships are becoming increasingly diverse and complex, dispute resolution through arbitration has become a preferred mechanism for many enterprises due to its flexibility, confidentiality, and efficiency.

I. Introduction to issues related to dispute resolution through arbitration

Within the system of dispute resolution mechanisms currently available, dispute resolution through arbitration is regarded as an alternative mechanism outside the court system with numerous advantages, particularly suitable for disputes arising in the sectors of cooperate, trade, and investment. Arbitration not only ensures the parties’ freedom of agreement but also emphasizes flexibility, efficiency, and confidentiality throughout the dispute resolution process.

However, in practice, the selection and application of arbitration still encounter various difficulties, ranging from the validity of arbitration agreements and jurisdictional issues to arbitral procedures, as well as the legal value and enforceability of arbitral awards. Therefore, identifying and clarifying the legal issues related to dispute resolution through arbitration constitutes an important foundation that enables parties to effectively utilize this mechanism while minimizing risks when disputes arise.

II. Understanding dispute resolution through arbitration

To effectively choose and apply dispute resolution through arbitration, parties must clearly understand the legal nature, scope of application, and operational mechanisms of arbitration.

1. What is dispute resolution through arbitration and what is its significance?

Dispute resolution through arbitration is a dispute resolution method based on the agreement of the parties, whereby the dispute is submitted to an arbitral tribunal for settlement instead of being brought before a court. The resolution is conducted on the basis of the arbitration agreement and in accordance with arbitral procedures prescribed by law.

Such a mechanism plays a significant role in ensuring the parties’ freedom of agreement, shortening the duration of dispute resolution, maintaining confidentiality, and enhancing professional expertise in handling complex disputes. Accordingly, arbitration is increasingly regarded as an effective legal instrument in the modern business environment.

2. What types of disputes may be resolved through arbitration?

Pursuant to Article 2 of the Law on Commercial Arbitration 2010, dispute resolution through arbitration applies to:

• Disputes arising between parties from commercial activities;
• Disputes arising between parties in which at least one party engages in commercial activities;
• Other disputes between parties where the law provides that such disputes may be resolved by arbitration.

Thus, the scope of disputes that may be resolved by arbitration is relatively broad. However, the prerequisite condition is the existence of a valid arbitration agreement. Correctly determining the type of dispute and the applicable legal basis will assist the parties in selecting the appropriate dispute resolution mechanism.

3. Who supervises and makes decisions in the process of dispute resolution through arbitration?

Pursuant to Clause 9 and Clause 10 Article 3 of the Law on Commercial Arbitration 2010, an arbitral decision refers to a decision issued by the arbitral tribunal during the dispute resolution process, while an arbitral award is the decision issued by the arbitral tribunal that resolves the entire dispute and terminates the arbitral proceedings.

Accordingly, in dispute resolution through arbitration, the authority to settle the dispute and render the award is the arbitral tribunal, which is established based on the agreement of the parties or under the procedural rules of the arbitration center chosen by the parties.

The arbitral tribunal operates independently and objectively and is bound only by the law and the parties’ agreement. It ensures fairness, professional expertise, and transparency in arbitration proceedings.

4. What rights of the parties are protected by law during the arbitration process?

During the process of dispute resolution through arbitration, the parties are entitled to various important rights protected by the Law on Commercial Arbitration 2010, including:

• Negotiation and mediation during arbitral proceedings (Article 9): During the arbitral proceedings, the parties have the right to freely negotiate and reach agreement on the resolution of the dispute or request the arbitral tribunal to conduct mediation in order to facilitate settlement.
• The respondent has the right to submit counterclaims against the claimant in relation to matters connected with the dispute (Clause 1 Article 36);
• Before the arbitral tribunal renders an arbitral award, the parties have the right to withdraw the statement of claim or counterclaim (Clause 1 Article 37);
• From the commencement of arbitral proceedings, the parties retain the right to negotiate and agree to terminate the dispute resolution process (Article 36);
• Upon expiration of the prescribed time limit, if the respondent fails to notify the claimant of the arbitrator chosen by it and the parties have no other agreement regarding the appointment of arbitrators, the claimant has the right to request the competent court to appoint an arbitrator for the respondent (Clause 1 Article 41); …

These rights ensure that dispute resolution through arbitration does not limit the legitimate rights of the parties but rather enhances the efficiency and legal certainty of the dispute resolution mechanism.

III. Legal provisions related to dispute resolution through arbitration

Dispute resolution through arbitration can only be effective when conducted within the proper legal framework. Therefore, identifying the applicable legal instruments, understanding arbitral procedures, and recognizing common violations in practice are essential to ensure the legality and enforceability of arbitral awards.

1. Which law governs dispute resolution through arbitration in Vietnam?

In Vietnam, the primary legal instrument governing dispute resolution through arbitration is the Law on Commercial Arbitration 2010, as amended and supplemented in 2025.

This law regulates the jurisdiction of commercial arbitration, forms of arbitration, arbitration institutions, arbitrators, arbitral procedures, as well as the rights, obligations, and responsibilities of the parties in arbitral proceedings. It also provides for the authority of courts in relation to arbitration activities, the organization and operation of foreign arbitration in Vietnam, and the enforcement of arbitral awards, including:

• Chapter V on initiation of arbitration proceedings;
• Chapter VIII on hearings for dispute resolution;
• Chapter IX on arbitral awards;
• Chapter X on enforcement of arbitral awards. 

Determining the correct legal basis, particularly with respect to procedural requirements, constitutes the foundation for ensuring that arbitration proceedings are conducted lawfully and effectively.

2. What is the legal procedure for resolving disputes through arbitration?

The procedure for dispute resolution through arbitration generally includes the following steps:

- Step 1: Commencement of arbitration proceedings

Under the Law on Commercial Arbitration 2010, arbitration proceedings may be initiated in two forms: Arbitration at an arbitration center and ad hoc arbitration.

Commencement at an arbitration center:

• When resolving disputes at an arbitration center, the claimant must submit a statement of claim to the center. The content of the statement of claim is prescribed in Clause 2 Article 30 of the Law on Commercial Arbitration 2010. The statement of claim must be accompanied by the arbitration agreement and the original or copies of relevant documents.
• Unless otherwise agreed by the parties, arbitral proceedings commence when the arbitration center receives the claimant’s statement of claim. Within ten days from the receipt of the statement of claim, accompanying documents, and proof of payment of the advance arbitration fees, the arbitration center must send the respondent a copy of the claimant’s statement of claim and related documents as required by law. Within thirty days from the date of receipt of the statement of claim and accompanying documents, the respondent must submit its statement of defense to the arbitration center. Upon request by one or both parties, such a time limit may be extended by the arbitration center depending on the circumstances of the case. If the respondent fails to submit a statement of defense, the arbitration proceedings will still continue.

Commencement in ad hoc arbitration:

• Where the dispute is resolved through ad hoc arbitration, the claimant submits the statement of claim directly to the respondent. Unless otherwise agreed by the parties, arbitral proceedings commence when the respondent receives the statement of claim. Within thirty days from receipt of the statement of claim and accompanying documents, the respondent must send to the claimant and the arbitrator its statement of defense and the name and address of the person it selects as arbitrator.

A dispute will be accepted for resolution by an arbitration center or ad hoc arbitration when the following conditions are satisfied:

• There exists a valid and enforceable arbitration agreement selecting either an arbitration center or ad hoc arbitration;
• A valid statement of claim has been submitted by the claimant;
• The statement of claim is filed within the statutory limitation period. Pursuant to Article 33 of the Law on Commercial Arbitration 2010, the limitation period for initiating arbitration proceedings is two years from the date the lawful rights and interests are infringed, unless otherwise provided by specialized laws;
• The claimant has fully paid the arbitration fees. Arbitration fees include arbitrators’ remuneration, travel expenses and other costs for arbitrators; fees for expert consultation and other assistance requested by the arbitral tribunal; administrative fees; fees for the appointment of arbitrators in ad hoc arbitration by the arbitration center upon request of the parties; and fees for other services provided by the arbitration center. Arbitration fees are determined by the arbitration center (for disputes resolved at the center) or by the arbitral tribunal (for ad hoc arbitration) in accordance with Article 34 of the Law on Commercial Arbitration 2010.

- Step 2: Establishment of the arbitral tribunal

Article 39 of the Law on Commercial Arbitration 2010 provides that the arbitral tribunal may consist of one or more arbitrators as agreed by the parties. In the absence of such agreement, the tribunal shall consist of three arbitrators.

An arbitrator is a person selected by the parties or appointed by the arbitration center or the court to resolve the dispute in accordance with the law (Clause 5 Article 3 of the Law on Commercial Arbitration 2010). Arbitrators must meet statutory qualifications and must not fall within prohibited categories.

- Step 3: Preparation for hearing

At this stage, the arbitral tribunal conducts preparatory activities such as verifying facts, collecting evidence (Article 46), summoning witnesses (Article 47), and applying interim emergency measures (Article 49) under the Law on Commercial Arbitration 2010.

- Step 4: Hearing for dispute resolution

The hearing for dispute resolution is conducted in private unless otherwise agreed by the parties (Article 55 of the Law on Commercial Arbitration 2010). The parties may appear in person or authorize representatives to attend the hearing and have the right to invite witnesses and legal representatives to protect their legitimate rights and interests.

- Step 5: Issuance of the arbitral award

The arbitral tribunal renders its award by majority vote. If a majority cannot be reached, the award shall be issued in accordance with the opinion of the presiding arbitrator (Article 60 of the Law on Commercial Arbitration 2010).

- Step 6: Enforcement of the arbitral award

After an arbitral award is issued, the parties are expected to voluntarily comply with it.

However, if the party required to comply with the award fails to do so within the prescribed period and does not file a request to cancel the arbitral award, the party entitled to enforcement may submit an application to the competent civil judgment enforcement authority for enforcement in accordance with Clause 1 Article 66 of the Law on Commercial Arbitration 2010.

3. What violations commonly occur during arbitration proceedings?

In practice, arbitration proceedings may involve several common violations, such as invalid or unclear arbitration agreements; improper composition of the arbitral tribunal contrary to the parties’ agreement or legal provisions; violations of the principles of equality and the parties’ right to present their case; or breaches of arbitral procedural rules.

Such violations may lead to serious legal consequences, particularly the risk that the arbitral award may be cancelled by the court according to Article 68 of the Law on Commercial Arbitration 2010.

Therefore, early identification and prevention of common violations are crucial to ensuring the validity and enforceability of arbitration outcomes.

IV. Questions regarding dispute resolution through arbitration

In practice, parties often encounter various concerns regarding participation in arbitration proceedings, the legal effect of arbitral awards, and potential risks arising during the dispute resolution process. Below are several frequently raised questions.

1. What happens if one party refuses to participate in arbitration proceedings?

Pursuant to Article 56 of the Law on Commercial Arbitration 2010:

• If the claimant is absent without a legitimate reason or leaves the hearing without the consent of the arbitral tribunal, it shall be deemed to have withdrawn its claim. In such a case, the arbitral tribunal may continue resolving the dispute if the respondent has a counterclaim or request.
• If the respondent is absent without a legitimate reason or leaves the hearing without the consent of the arbitral tribunal, the tribunal may still proceed with the dispute resolution based on the available documents and evidence.
• At the request of the parties, the arbitral tribunal may conduct the hearing based solely on the case file without requiring the presence of the parties.

Thus, where a valid arbitration agreement exists, a party’s refusal to participate in arbitration does not eliminate the tribunal’s jurisdiction. The arbitral tribunal may continue the proceedings and issue an award based on the available evidence.

2. If a party disagrees with a decision of the arbitral tribunal, do they have any rights?

Pursuant to Clause 1 Article 44 of the Law on Commercial Arbitration 2010, if a party disagrees with a decision of the arbitral tribunal, within five working days from receipt of the decision, such a party has the right to submit a request to the competent court to review such a decision.

Within five working days from receipt of the complaint, the Chief Justice of the competent court shall assign a judge to consider and resolve the complaint. Within ten working days from the assignment, the judge must issue a decision. The court’s decision is final.

3. What are common reasons why parties refuse to participate in arbitration?

In practice, parties may refuse to participate in arbitration due to several reasons, such as lack of awareness of the legal validity of arbitration agreements, concerns about arbitration costs, doubts regarding the impartiality of arbitrators, or a preference for resolving disputes through courts where an appeal mechanism is available.

These reasons often stem from insufficient legal understanding or incomplete assessment of the advantages and disadvantages of arbitration, leading to reluctance or opposition to a dispute resolution mechanism that has already been agreed upon.

4. What disputes may arise between parties during arbitration proceedings?

Apart from disputes concerning the substance of the contract, arbitration proceedings may also lead to disputes relating to the validity of the arbitration agreement, the jurisdiction of the arbitral tribunal, the selection of arbitrators, procedural issues, or the enforcement of arbitral awards.

If such disputes are not properly resolved in accordance with the law, they may directly affect the legal validity of the arbitral award and may even result in the award being cancelled by the court.

5. How can violations in arbitration proceedings be prevented?

To prevent violations, parties should carefully draft clear and valid arbitration agreements, select reputable arbitration centers, and appoint arbitrators with appropriate professional expertise.

At the same time, strict compliance with the arbitral procedures prescribed by the Law on Commercial Arbitration 2010 is a main factor.

Furthermore, the involvement of experienced legal counsel in arbitration matters can assist parties in identifying risks at an early stage, safeguarding procedural rights, and minimizing the likelihood of violations during dispute resolution.

V. Are you looking for a reputable lawyer to assist with issues related to dispute resolution through arbitration?

Dispute resolution through arbitration requires in-depth knowledge of arbitration law, specialized advocacy skills, and practical experience in handling complex procedural situations. The support of a lawyer specialized in commercial arbitration can assist parties in developing effective dispute resolution strategies and safeguarding their lawful rights and interests to the greatest extent possible.

If you require legal consultation, drafting of arbitration agreements, representation in arbitration proceedings, or assistance in enforcing arbitral awards, selecting a competent and reputable lawyer is an important step to ensure legal effectiveness and security throughout the dispute resolution process.

The above information is provided for reference purposes only. Should you require detailed advice regarding your specific case, please contact: