What are Requirement on Sending Notices in Arbitration Proceedings in Vietnam?

According to Article 12 of Vietnam Law on Commercial Arbitration, unless otherwise agreed by the parties or provided by the arbitration center’s rules of proceedings, the mode and order of sending notices in arbitral proceedings for dispute are specified as follows:

Each party’s written explanations, correspondence papers and other documents shall be sent to the arbitration center or arbitration council in sufficient copies so that every member of the arbitration council and the other party has one copy, and one copy is filed at the arbitration center;

Notices and documents to be sent by the arbitration center or arbitration council to the parties shall be sent to the addresses or to their representatives at the correct addresses notified by the parties;

Notices and documents may be sent by the arbitration center or arbitration council directly, in registered or ordinary mails, by fax. telex, telegram, email, or other modes which acknowledge such sending;

Notices and documents sent by the arbitration center or arbitration council will be regarded as having been received on the date the parties or their representatives receive them or if such notices and documents have been sent to addresses or to their representatives at correct address notified by the parties;

The time limit for receiving notices and documents shall be counted from the date following the date such notices and documents are regarded as having been received. If the following date falls on a holiday or day off under regulations of the country or territory in which the notices and documents have been received. this time limit shall be counted from the subsequent first working day. If the last day of this time limit falls on a holiday or day off under regulations of such country or territory, the time of expiration is the end of the subsequent first working day.

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What are Responsibility for Wrongful Request of Arrest of Ship?

According to Article 131 of Vietnam Maritime Law, the wrongful request of arrest of ship in Vietnam shall be subject to financial obligations. In particular:

The applicant for arrest of a ship must be held legally liable for his request. If the request for arrest of a ship is wrongful, which may lead to any loss, such applicant shall be responsible for compensating for any loss or damage possibly incurred.

Any loss or damage that may be incurred from consequence of such request for wrongful arrest shall be dealt with as agreed upon between parties. Where there is any disagreement or dispute that may arise, the Court or Arbitration Tribunal shall be requested to settle this disagreement and dispute in accordance with laws.

If the Court that grants a judgement on arrest of a ship which is not based on the reasons for a request for arrest or does not serve on the ship as the right subject matter of such request, which may cause any loss or damage, it shall be liable for any compensation in accordance with laws and regulations.

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What Laws Will be Applied for Dispute Settlement by Arbitration in Vietnam?

Under Article 14 of Law on Commercial Arbitration, applicable laws for dispute settlement by arbitration in Vietnam will be Vietnamese if the case involve no foreign element. If dispute involving foreign invested enterprise, parties need to agree on language. If parties do not have such language agreement for arbitration, the arbitration council will decide. In particular:

For a dispute involving no foreign element, the arbitration council shall apply Vietnamese law for settling the dispute.

For a dispute involving foreign elements. the arbitration council shall apply the law selected by the parties. If the parties have no agreement on the applicable law, the arbitration council shall decide to apply a law it sees the most appropriate.

When the Vietnamese law or law selected by the parties contains no specific provisions concerning the dispute, the arbitration council may apply international practices for settling the dispute, provided such application or consequence of such application does not contravene the fundamental principles of Vietnam law.

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When Arbitration Could Settle a Dispute in Vietnam?

Under the Law on Commercial Arbitration effective Jan 1st, 2011, and other guidance, in principle, arbitration could only be used in disputes among parties which arise from commercial activities, disputes among parties at least one of whom conducts commercial activities, and other disputes among parties which are stipulated by law to be settled by arbitration in Vietnam. Lawyer should be consulted for arbitration from drafting arbitration agreement to resolving the arisen dispute.

Arbitral tribunals are entitled to resolve the disputes mentioned above if the concerned parties have a valid arbitration agreement agreed, before or after the dispute arise.

When the court is requested to resolve one of the disputes of the above types which a valid arbitration agreement exists, the court shall examine documents enclosed with the petition to determine and if the court finds that the dispute is under an arbitration agreement and such arbitration agreement is valid the court shall issue a decision to terminate the adjudication, return the petition and documents.

The dispute shall be handled by the court though it is under an arbitration agreement, unless otherwise agreed by the parties concerned or prescribed by law: the court issues a decision to annul the arbitral award or the decision made by the arbitral tribunal; or there is a decision to suspend the arbitral tribunal or arbitration center from resolving disputes; or the arbitration agreement is not viable.

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Dispute Resolution Through Arbitration

Dispute resolution methods are litigation, negotiation, mediation and arbitration. Handing disputes requires litigation law firm with dispute lawyers in Vietnam having experience and knowledge to provide resolutions to complex cross-border issues, commercial and civil disputes.

In the current business environment, most business agreements could contain a clause stipulating that disputes arisen must be resolved in arbitration. For a dispute to be referred to arbitration, there must be a valid arbitration agreement in writing, either as an arbitration clause within a contract or a separate agreement. If the agreement is included within the context of a contract, the arbitration clause is considered independent, and any modification, extension, or termination of the contract does not affect the validity of the arbitration clause. 

Vietnamese law allows for a written arbitration agreement to take the form in any written form, so long as the writing clearly indicates the parties’ intent to resolve any dispute via arbitration. If a dispute falls within the scope of a valid arbitration agreement, but a party attempts to initiate court proceedings, the residing court does not have jurisdiction over the matter, and must drop the case. Moreover, an arbitration agreement does not have to stipulate specific dispute matters and/or the arbitration organization authorized to resolve disputes without supplemental agreement. Even if there is a valid arbitration agreement, Vietnamese Arbitration Law stipulates that in order for a dispute to go to arbitration, it must also fit into one of three categories:

(1) disputes arising from “commercial activities”;

(2) disputes where at least one party is engaged in commercial activities;

(3) other disputes where the law stipulates that arbitration is a permissible means of resolution.

In category (1), the term “commercial activity” is defined in Commercial Law No. 36-2005-QH11 (31 December 2005) as “activity for profit-making purposes comprising the purchase and sale of goods, provision of services, investment, commercial enhancement, and other activities for profit-making purposes.” The types of disputes that often fall into the second category are noncommercial disputes, such as civil disputes, where at least one party to the dispute is engaged in commercial activities. However, this category does not apply in disputes between a good/service provider and a consumer. In this case, the law allows the party to choose between litigation and arbitration. Even the agreement includes a standard arbitration clause in the supply of goods or services contract, the dispute may not be arbitrated without the consumer’s consent. The final category of disputes permissible for arbitration gives legislators discretion to expand or maintain the types of disputes resolved through arbitration. An example of a category (3) dispute is a dispute arising from investment activities governed by the Law on Investment.

Arbitration has become an extremely popular method of dispute resolution, as many businesses prefer it over the high costs of litigation.

How ANT Lawyers Could Help Your Business? Please click to learn more about Trade Dispute Law Firm in Vietnam or contact our lawyers in Vietnam for advice via email ant@antlawyers.vn or call our office at (+84) 24 32 23 27 71

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Determination of Competence between Court and Arbitration

Dispute resolution is always a matter of concern in Vietnam when it comes to the regulations and the effective enforcement of government authority.

The Council of Judges of the Supreme People’s Court issued Resolution 01/2014/NQ-HDTP in order to provide guidelines for the Law on Commercial Arbitration in Vietnam on dispute resolution process.

Accordingly, the courts in Vietnam are permitted to deal with disputes which are agreed to be settled by arbitrators in the following cases:

1) There is a Decision of the court on cancelling Arbitration’s Judgement, Council of Arbitration’s Decision on recognition agreement of parties.

2) The parties have agreed to settle their disputes at a specific arbitration center but it has stopped operating;

3) The arbitrators selected by the parties can not participate in solving disputes due to force majeure events;

4) The appointed arbitrator refuses to settle the dispute without an agreement on a replacement;

5) The proceedings rules selected by the parties are different from different from those of the selected arbitration center, and this center does not adopt rules of the other centers.

6) Consumers object to the arbitrator selection according to Articles 17 of the Law on Commercial Arbitration

In the first four cases, the parties must not reach an alternative agreement on replacement.

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Forms of Disputes and Approaches to Settlement

Dispute in Vietnam could be between parties in business transaction, foreign investors and Vietnam government, or between countries in implementing international treaties.

The formation of market economy in Vietnam took place in the context of the development in the width and depth of the economic ties at a significant fast pace that make Vietnam an important part of the world supply chain.  Vietnam suppliers could sell the goods and services to the world and the foreign supplier could also export their goods and services to Vietnam market.  Further, as the Vietnam market opens up, foreign investors could invest through various forms of investments in Vietnam i.e. acquire equities in Vietnam companies, establish business in Vietnam.  During this process, disputes are an inevitable result which has been growing in scale and complexity.

Most should agree that disputes shall be construed as the dissent, inconsistencies or conflicts of interests, rights and obligations between the parties in the economic relations at different levels. Accordingly, economic disputes can have the following basic forms:

1. Disputes in business are between the participants in a business transaction including investments, production to consumption of products or performance of services on the market for profit purposes i.e. professional and product liability, debt disputes over a business transaction, franchise disputes, intellectual property disputes, and disputes over contract for supply of goods or services…
2. Disputes between foreign investors with Vietnam government agencies, arising in the implementation of the BTO, BT, BOT, and the implementation of international agreements on promotion and protection bilateral and multilateral investment i.e. government policy and policy measures, concession to water and sewerage, power or energy supply, project or contract payment…
3. Disputes between countries in the implementation of the international bilateral and multilateral agreements.

In Vietnam, as the disputes arise, parties involved could consider resolving the matters through negotiation, mediation, arbitration, or taking court actions after taking consideration of various factors including cost, time, and the complexity of the disputes.  Litigation law firm in Vietnam with skillful dispute lawyers should be consulted to provide the suitable advice for dispute resolution.

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Contract Dispute in Vietnam

Disputes in contract performance and solutions

Disputes occur during contract performance are beyond the control of the entity entering contractual relations. In developed countries, lawyers always invited to advise customers to identify potential disputes, and provide solutions, support and provide legal advice and to accompany the enterprises solve disputes in accordance with the provisions of the law, which help businesses to focus on its business activities. Foreign companies when entering Vietnam mostly follow suit to engage dispute or litigation lawyers in Vietnam at early stage of the transactions.

Contract Dispute

Contractual disputes in Vietnam shall be construed as conflicts, disagreements, conflicts between the parties regarding the implementation or non-implementation of rights and obligations in the contract.Disputes could arise in failure to collect the payment from debtor in sales agreement, construction contract disputes between investor and contractor, labour dispute between employer and employee, insurance disputes between ship owner and insurance company.

Contract disputes must satisfy the following factors:

First, there is a contract between the parties. The contract would be in different for ms therefore, there is a need to clearly define if the contractual relationship has been formed or not.

Second, there is a breach of obligations or duties that are in violation of a party in the contractual relationship.

Third, there is disagreement between the parties about the handling of infringement or the consequences of such violations.

It should be noted, the contract disputes arise from the breach. However, not all breaches of contract also lead to disputes.

How to settle the contract disputes in Vietnam

Contractual disputes can be resolved by the following methods:

• Negotiation is the process or behavior in which the two sides conduct exchanges, agreement on common interests and characteristics of disagreement and come to a unified agreement. The negotiation is without the presence of third parties. However, if the lawyers in Vietnam would be involved during the negotiation process, at the role of representing or advising, counseling, then the negotiations tend to be more effective and parties would reach agreement.
• Mediation is one of the options for disputing parties to end the conflict. Mediation is different from negotiating with the intervention of a third party. Mediator will help parties to achieve agreement and resolve conflict.
• Court or arbitration: The settlement of the dispute in court would take time. The court’s ruling can be appealed. It should be noted that, per Vietnam laws, only Vietnam litigation or dispute law firms could represent the client at court. Commercial arbitration is available only in commercial-business sector. The advantage of this method is fast and efficient. However, compare with disputing at court, this method of handling dispute would take higher costs.

Disputes and dispute resolution matters are natural and inevitablein any countries including Vietnam. It is important that parties involved need to identify, anticipate disputes can occur. When there is a dispute, the dispute lawyers will be able to help parties to with advice to reasonable solution to address the disputes effectively.

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FORMS OF DISPUTES AND APPROACHES TO SETTLEMENT

Dispute in Vietnam could be between parties in business transaction, foreign investors and Vietnam government, or between countries in implementing international treaties.

The formation of market economy in Vietnam took place in the context of the development in the width and depth of the economic ties at a significant fast pace that make Vietnam an important part of the world supply chain.  Vietnam suppliers could sell the goods and services to the world and the foreign supplier could also export their goods and services to Vietnam market.  Further, as the Vietnam market opens up, foreign investors could invest through various forms of investments in Vietnam i.e. acquire equities in Vietnam companies, establish business in Vietnam.  During this process, disputes are an inevitable result which has been growing in scale and complexity.

Most should agree that disputes shall be construed as the dissent, inconsistencies or conflicts of interests, rights and obligations between the parties in the economic relations at different levels. Accordingly, economic disputes can have the following basic forms:

1. Disputes in business are between the participants in a business transaction including investments, production to consumption of products or performance of services on the market for profit purposes i.e. professional and product liability, debt disputes over a business transaction, franchise disputes,intellectual property disputes, and disputes over contract for supply of goods or services…

2. Disputes between foreign investors with Vietnam government agencies, arising in the implementation of the BTO, BT, BOT, and the implementation of international agreements on promotion and protection bilateral and multilateral investment i.e. government policy and policy measures, concession to water and sewerage, power or energy supply, project or contract payment…

3. Disputes between countries in the implementation of the international bilateral and multilateral agreements.

In Vietnam, as the disputes arise, parties involved could consider resolving the matters through negotiation, mediation, arbitration, or taking court actions after taking consideration of various factors including cost, time, and the complexity of the disputes.  Litigation law firm in Vietnam with skillful dispute lawyers should be consulted to provide the suitable advice for dispute resolution.

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