THE REGULATIONS FOR THE COMMERCIAL ARBITRATION AWARD IN VIETNAM

According to the general principle, a judgment (arbitral award or arbitration award) sentenced by any country has only validity in such a country. In some cases, however, an arbitral award will be recognized as having legal validity and be allowed to be executed (enforced) on board. Thus, What is an arbitral award? What are the regulations for a commercial arbitration award? NPLaw will provide you with information on a commercial arbitration award.             

I. A commercial arbitration award is in the know.

1. What is an arbitral award (arbitration award)?

Pursuant to Clause 10, Article 3 of the Law on Commercial Arbitration 2010, an arbitral award (arbitration award) means a decision of an arbitration tribunal (arbitral forum) that resolves the entire dispute's contents and terminates the arbitral proceedings.

An arbitral award is the final jurisdiction and cannot be appealed according to any procedures. The arbitral award will be executed, if such an arbitral award is valid (when there isn’t an application to cancel an arbitral award, or the Trial Panel⁽¹⁾ dismisses such an application).

2. The principles for promulgating an arbitral award

According to Article 60 of the Law on Commercial Arbitration 2010, the principles for promulgating an arbitral award are specified, as follows:

• The Trial Panel sentences an arbitral award by majority voting method;
• If a vote doesn’t achieve a majority, an arbitral award will be set up according to the opinion of the Trial Panel’s Chairman.

II. The processes and procedures for recognizing a commercial arbitration award

Step 1: Subjects that have the right to file an application to recognize a commercial arbitration award

Persons who are entitled to execute a foreign arbitral award or their legal representatives have the right to require the Vietnamese Court to recognize and allow the execution of such an award in Vietnam, as follows:

• Executing individuals who reside and work in Vietnam;
• Executing agencies and organizations have headquarters in Vietnam;
• There are assets regarding execution of a foreign arbitral award in Vietnam at the time of request.

Step 2:   Acceptance and settlement of an application by the Court

An application for recognizing and executing a foreign arbitral award can be submitted to the Court in the two following methods:

• Submitting to the Ministry of Justice when the International Treaties (which Vietnam is a member) stipulate, and then the Ministry of Justice will transfer an application to the competent Court after preliminarily reviewing such an application (Clause 1, Articles 451 and 454 of the Code of Civil Procedure 2015).
• If there aren’t any International Treaties or the International Treaties don’t stipulate, an application can be directly submitted to the competent Court of Vietnam (Clause 1, Article 451 of the Code of Civil Procedure 2015). 

Within five (5) working days from the date of receiving an application sent by the Ministry of Justice, or receiving an application and attached documents sent by a requiring person, the Court has the jurisdiction to consider, settle, and give written notice to an executed person, executing person, their legal representative in Vietnam, the Procuracy, and the Ministry of Justice. 

If the Court denies settling an application, the Court has to notice in writing and clearly present such reasons.

Step 3: Considering an application

Within two (2) months from the date of accepting an application, according to each particular case, the Court will sentence one of the following decisions:

• Temporarily suspending consideration for a required application;
• Suspending consideration for a requiring application;
• Holding a meeting to consider an application.

After considering the application, and attached documents, the opinion of the convened person, and the Procuracy; the Trial Panel will discuss and decide according to majority rules.

The Trial Panel has the right to sentence recognizing decisions and allow execution of a foreign arbitral award in Vietnam, or decide to deny such an award. 

  III. Questions regarding a commercial arbitration award

1. What are cases of cancellation of an arbitral award?

An arbitral award is the final jurisdiction. However, it can still be canceled when one of the suitors files an application.        

Pursuant to Clause 2, Article 68 of the Law on Commercial Arbitration 2010 stipulates the cancellation of an arbitral award.

An arbitral award will be canceled if such a award belongs to one of the following cases:

• There isn’t an arbitration agreement, or an arbitration agreement is invalid;
• The Trail Panel’s structures and the arbitral proceeding procedures aren’t appropriate for the parties’ agreement or are in contrast to the Vietnamese Law;
• Dispute issues don’t belong to the competence of the Arbitral Forum⁽²⁾ (Arbitration Tribunal);

If an arbitral award has contents that don’t belong to the competence of the Arbitral Forum (Arbitration Tribunal), such contents will be canceled.

• Evidence provided by parties (suitors) that the Arbitral Forum (Arbitration Tribunal) is based on such evidence to sentence an award (judgment) is falsification;

An arbitrator⁽³⁾ receives money, assets, or other material benefits from one suitor (one disputing party), such that such action affects an arbitral award’s objectivity and fairness;

• An arbitral award is contrary to the basic principles of Vietnamese Law.

Therefore, a commercial arbitration award belonging to one of the above cases can be canceled according to the Law. 

2. How is an arbitral award executed (enforced)?

Pursuant to Article 67 of the Law on Commercial Arbitration 2010, a commercial arbitration award is executed according to the Law on Enforcement of Civil Judgments.

The State encourages the parties (suitors) to participate in the voluntary execution of an arbitral award (according to Article 65 of the Law on Commercial Arbitration 2010). However, according to Article 66 of the Law on Commercial Arbitration 2010, when the executing time of arbitral award is due that the executing party (party required to execute) doesn’t voluntarily execute and doesn’t also require the Court to cancel an arbitral award, the executed party (party that is entitled to execute such the award) has the right to file an application to require the competent Department of Civil Judgment Enforcement to execute the above arbitral award; for the⁽⁴⁾  Ad-hoc Arbitration’s award, the executed party (the party that is entitled to execute such the award) has the right to require the competent Department of Civil Judgment Enforcement to execute the above arbitral award after such the award is registered according to the Law.

Therefore, a commercial arbitration award will be recognized and executed according to the Law on Enforcement of Civil Judgments. The State encourages the parties (suitors) to voluntarily execute an arbitral award within the prescribed time; and If the parties don’t implement, the State will coerce them into execution.

3. What is a commercial arbitration award recognized and executed in Vietnam?

Pursuant to Article 424 of the Code of Civil Procedure 2015, the following foreign commercial arbitration award will be recognized and executed in Vietnam:

• A foreign arbitral award that such a country and the Socialist Republic of Vietnam are also members of the International Treaty on the Recognition and Enforcement of Foreign Arbitral Awards;
• A foreign arbitral award that such a country and the Socialist Republic of Vietnam aren’t also members of the International Treaty will be based on the principle of reciprocity.

The principle of reciprocity is the basic principle of international relations, whereby a country will reserve a particular legal regime, such as General Most Favoured Nation Treatment, National Treatment on Internal Taxation and Regulation, or certain benefits for foreign persons and legal entities, such as legal regimes, benefits, or treatments that such a country’s persons and entities also receive in such a foreign country. Besides, a foreign arbitral award recognized and executed in Vietnam has to demand the following conditions:

• Such an award (judgment) has to be a final award of the Arbitral Forum (Arbitration Tribunal);
• Such an award (judgment) has to resolve the entire dispute's contents;
• The proceeding procedures have to be ensured;
• Such a foreign arbitral award must have legal validity in the territory of the country that sentences such an award. 

Therefore, If a foreign arbitral award wants to be recognized and executed in Vietnam, such an award has to satisfy the above conditions. 

4. Who has the right to request the cancellation of an arbitral award?

Pursuant to Article 69 of the Law on Commercial Arbitration 2010, the right to request the cancellation of an arbitral award is stipulated, as follows:

Within thirty (30) days from the date of receiving an arbitral award, if one party (one suitor) has full evidence to demonstrate that the Arbitral Forum (Arbitration Tribunal) has sentenced an award belonging to the canceled award according to Clause 2, Article 68 of this Law, such a party has the right to require the competent Court to cancel such a sentenced award. An application has to be attached to documents and evidence that demonstrate the cancellation request is valid and legal.

5. Can the Court declare the cancellation of an arbitral award?

According to Clause 2, Article 68 of the Law on Commercial Arbitration 2010, the Court will consider the cancellation of an arbitral award when one party files an application.

When the Court considers the cancellation of an arbitral award, the requesting party has to demonstrate that the Arbitral Forum (Arbitration Tribunal) has sentenced an award belonging to a canceled award. Contrary to Vietnamese Law, the Court is responsible for gathering and demonstrating evidence so as to decide the cancellation or non-cancellation of an arbitral award.

IV. Do issues regarding a commercial arbitration award need the lawyer’s consultation? And how does the Client contact them?

Issues regarding the recognition and execution of a foreign arbitral award are complicated, so please don’t hesitate to contact NPlaw to receive the best consultations.

NPLaw Firm is one of the most prestigious Law Firms specializing in the resolution of issues regarding commercial arbitration awards. When choosing our service, the Client will receive conscientious support by professional Lawyers; NPLaw will protect the legal rights and benefits or will be the authorized legal representative to participate in the proceeding. We have the honour of becoming a partner and providing legal consulting services for the Client.   

These are all information relating to the REGULATIONS FOR THE COMMERCIAL ARBITRATION AWARD as prescribed by Vietnamese Law. Please don’t hesitate to contact us, if the clients have any further questions.

NPLAW is proud to be a prestigious law firm unit and has the trust and belief of clients, enterprises, and individuals. NPLaw specializes in providing legal services all-around relating to domestic and abroad investments such as Enterprise, Real Estate, Intellectual Property, Labor; Drafting Consultation, negotiations and concluding support for the Commercial Contract, domestic and abroad Service Contract; consultations and support for implementing licensed procedures of licenses, etc,. NPLaw, with our professional Lawyers and Specialists, we have the full ability to consult with and support customers as they implement the above procedures. Along with the slogan “Your benefits - Our Priority”, NPLaw definitely becomes the accurate, and safe choice for your legal issues.  

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Email: legal@nplaw.vn

1. Trial Panel: includes Judges and People’s Jurors set up by the competent Court to try and make decisions or judgments on issues at the Court on behalf of the State. (source: NPLaw) 

2. Arbitral Forum (Arbitration Tribunal): is a set of arbitrators according to an agreement between the parties in commercial arbitration activities so as to resolve disputes arising.   (source: NPLaw)

3. Arbitrator: is someone who has been officially chosen to make a decision that ends a legal disagreement without it having to be solved in court. (source: Cambridge Dictionary)

4. Ad-hoc Arbitration: is a form of arbitration that the parties agree to set up to resolve a dispute.  (source: NPLaw)