Arbitration Law in Vietnam
Arbitration Law in Vietnam is governed primarily by the Arbitration Law of 2010, which was amended in 2020 to align with international standards and improve the arbitration framework in the country. Vietnam has made significant progress in modernizing its arbitration laws, making it a more attractive jurisdiction for both domestic and international arbitration.
Key Features of Arbitration Law in Vietnam:
1. Legal Framework
- The primary law governing arbitration in Vietnam is the Arbitration Law of 2010, which was revised in 2020 to enhance the efficiency and fairness of arbitration proceedings. The law is largely based on international best practices and the UNCITRAL Model Law on International Commercial Arbitration.
- Vietnam is a party to major international conventions, such as the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) and the ASEAN Protocol on Enhanced Dispute Settlement Mechanism, providing a favorable environment for international arbitration.
2. Arbitration Agreement
- Arbitration in Vietnam requires a written arbitration agreement between the parties. The agreement can be included as an arbitration clause in a contract or as a separate agreement.
- The arbitration agreement must be clearly expressed and specify the arbitral forum (institution or ad hoc) and the rules governing the arbitration.
- Arbitration clauses must be executed by the parties in writing, and disputes can only be submitted to arbitration if an agreement exists.
3. Scope and Applicability
- Commercial disputes: Arbitration in Vietnam primarily applies to commercial disputes arising from trade, business, and investment activities. Disputes involving family law, employment, and bankruptcy matters are generally excluded from arbitration.
- International arbitration: Vietnam is open to international arbitration and has been actively improving its legal framework to ensure the recognition and enforcement of foreign arbitral awards, especially for international trade and investment disputes.
4. Arbitral Tribunal
- Parties are free to choose the number of arbitrators, typically either one or three. If the parties fail to agree, the arbitration institution or the court may appoint arbitrators.
- The arbitrators must be impartial, independent, and qualified in the subject matter of the dispute. Vietnamese nationality is not required for arbitrators, and international arbitrators may be appointed.
- The appointment of arbitrators must comply with the Arbitration Law and any rules provided by the relevant arbitration institution.
5. Arbitration Procedure
- Party autonomy: The Arbitration Law emphasizes party autonomy, allowing the parties to choose the arbitration rules, venue, and language of the arbitration. If the parties do not specify these details, the arbitral tribunal has the authority to determine the procedure.
- The procedure is designed to be flexible and efficient, avoiding overly formal or lengthy processes typical of judicial proceedings.
- The confidentiality of arbitration proceedings is a key principle in Vietnam, ensuring that the details of the dispute and the award are kept private unless the parties agree to disclosure.
- The arbitrators have the discretion to manage the proceedings, including setting timelines, determining evidence, and conducting hearings as they see fit.
6. Arbitral Awards
- Binding and Final: Arbitral awards in Vietnam are final and binding on the parties. The only grounds for challenging an arbitral award are limited, such as procedural irregularities, lack of jurisdiction, or violations of public policy.
- Awards may include monetary relief, specific performance, or other remedies as appropriate to the case.
- The timeframe for issuing an award is generally set within six months from the commencement of the arbitration, though it can be extended if necessary.
7. Enforcement of Arbitral Awards
- Domestic Awards: Arbitral awards are enforceable in Vietnam without the need for court approval, as long as they meet the legal requirements set out in the Arbitration Law.
- International Awards: Vietnam is a signatory to the New York Convention, so foreign arbitral awards are generally enforceable in Vietnam, subject to a few limited grounds for refusal (e.g., public policy, lack of due process, or improper appointment of arbitrators).
- Enforcement of foreign awards follows the procedure of recognition and enforcement through the Vietnamese courts, and the court may only refuse enforcement on specific legal grounds outlined in the New York Convention.
8. Judicial Intervention
- Limited judicial intervention: The Arbitration Law of Vietnam follows the principle of minimal judicial intervention, and the courts are generally only involved in cases of arbitrator appointments when parties fail to reach an agreement, or in matters related to setting aside an award.
- The courts will also be involved in cases where enforcement of an award is required.
- Court assistance may also be sought in interim measures, such as securing assets or preserving evidence before the arbitration is concluded.
9. Arbitration Institutions in Vietnam
- Vietnam has several arbitration institutions that help administer arbitration proceedings:
- Vietnam International Arbitration Center (VIAC): The VIAC is one of the most well-known and respected arbitration institutions in Vietnam, handling both domestic and international disputes. It provides a set of rules for arbitration and mediations.
- Hanoi Arbitration Center (HAC): Another significant arbitration center in Vietnam that deals with both national and international disputes.
- Ad hoc Arbitration: Parties may also choose ad hoc arbitration, where no formal arbitration institution administers the process, and the parties agree on procedural rules and arbitrators.
10. Recent Reforms and Trends
- Amendments in 2020: The 2020 amendment to the Arbitration Law introduced various improvements to Vietnam’s arbitration system, including better alignment with international best practices and increasing the autonomy of arbitration institutions.
- Growing Arbitration Hub: Vietnam has been working to establish itself as a hub for arbitration in the region. The country’s increasing involvement in international trade, investment, and dispute resolution makes it an attractive jurisdiction for arbitration.
- Investment Disputes: Arbitration is increasingly being used to resolve investment-related disputes, particularly in sectors like construction, energy, infrastructure, and international trade.
Conclusion
Vietnam’s Arbitration Law has been designed to provide an effective and flexible dispute resolution mechanism that meets both domestic and international needs. The country’s commitment to international conventions, like the New York Convention, along with the provisions of the Arbitration Law of 2010 (amended in 2020), makes Vietnam an increasingly attractive venue for arbitration. The arbitration framework in Vietnam is designed to ensure party autonomy, efficiency, and fairness, while minimizing judicial interference.
Arbitration is particularly useful in commercial and investment disputes, and Vietnam’s legal framework continues to evolve to support the country’s growing role in global trade and business.
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