About Us
FAQ
Global Advisory Experts Logo
Global Advisory Experts Logo

Find a Global Law Expert

Specialism
Country
Practice Area

Awards

Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.

Foreign Arbitral Award in Vietnam and Some Notes

posted 9 months ago

For more posts on various topics, please reference this link: http://hmlf.vn/foreign-arbitral-award-in-vietnam-and-some-notes

 

Enforcing foreign arbitral awards (FAA) in Vietnam can be a complicated process that requires careful attention to local regulations and requirements. A foreign party seeking to enforce an arbitral award in Vietnam must be aware of the country’s legal framework surrounding the recognition and enforcement of foreign awards, time limits for action, grounds for rejection, and local language requirements, among other issues. In this context, seeking the counsel of experienced local legal experts is essential for foreign parties seeking to navigate the Vietnamese enforcement process successfully. This article presents an overview of some of the key issues and considerations that foreign parties should pay attention to when pursuing recognition and enforcement of foreign arbitral awards in Vietnam.

Definition

– Article 1 of the Ordinance on Recognition and Enforcement in Vietnam of Foreign Arbitral Awards 1995 stated that the foreign arbitral award will fall into one of two cases:

(i) The parties to settle commercial disputes agree to declare the award outside the territory of Vietnam.

(ii) A non-Vietnamese arbitrator declares the award within the territory of Vietnam.

– Article I(1) of the 1958 New York Convention sets forth two factors to determine whether an arbitral award is a foreign arbitral award, namely the primary and the secondary.

+ Primary factor: This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State wherever there is a request for the recognition and enforcement of such awards.

+ Secondary factor: The application shall also extend to arbitral awards that not classified as domestic awards in the State where the request for recognition and enforcement made.

The conditions for considering the FAA for recognition and granting permission for enforcement

At the request of the FAA, Vietnam shall recognize and enforce the final award/decision of the Arbitration tribunal, which resolves the entire dispute content, concludes the arbitration process, and possesses enforceable power.

In order for the FAA to apply, the judgment debtor involved must either reside or employed in Vietnam, or an organization with its headquarters located in Vietnam.

Furthermore, one should consider whether the assets necessary for FAA enforcement are located in Vietnam when requesting recognition and enforcement. Additionally, one should note that the investment capital of foreign investors can be classified as assets in Vietnam. For example, if a foreign corporation owns 100% of the contributed capital in a Vietnamese company, it can considered as the judgment debtor.

The Vietnamese competent authorities and timeframe to file a request for recognition and authorization for enforcement

The request for recognition of FAA in Vietnam must be made within a 3-year period from the FAA’s effective date. If the request for recognition and enforcement is unable to be submitted on time due to objective obstacles or force majeure, it may still be considered beyond the 3-year timeframe if sufficient proof is provided.

If an international treaty, in which Vietnam is a participant, mandates that the request for recognition and authorization for enforcement of FAA must be submitted to the Ministry of Justice, then the Ministry of Justice will be the competent authority to receive the request. In case of there are no such provisions exist in the international treaty, or there is no applicable international treaty, the competent authority to receive the request will be the competent Court.

The provincial-level People’s Court where the judgment debtor of the FAA resides, works, or has a head office, or where the asset relevant to the enforcement of FAA is situated, will be the competent Court to resolve the request for recognition and enforcement of FAA.

Specifications for the necessary documents and materials needed for the request and application process of FAA recognition and enforcement

The written request for FAA recognition and enforcement authorization must include the primary elements stated in Vietnam’s Civil Procedure Code. Along with the written request, the application dossier must include the necessary documents and papers stated in the international treaties that Vietnam is a member of. If no relevant international treaty exists, the application dossier must include the original or certified true copy of FAA and the original or certified true copy of the arbitral agreement.

Important points to remember:

i. If the requestor authorizes another individual in Vietnam to submit the request, they need to provide an authorization letter.

ii. The requester must translate, legally notarize, and certify all documents and papers attached to the written request made in a foreign language into Vietnamese.

iii. In practice, the Court may require the requesting party to provide additional documents, such as foreign laws relevant to the request, arbitration rules of the foreign arbitration center, and certification proving that the FAA is valid.

Notice when enforcement of foreign arbitral awards in Vietnam

Vietnamese laws do not contradict the awards given by arbitrators from foreign countries in terms of fundamental principles.

If foreign arbitrators’ awards violate fundamental principles of Vietnamese laws, the Court may deny requests for enforcement of foreign arbitral awards in Vietnam, or accept requests for non-recognition of those awards. This is because Vietnamese laws state that arbitral awards violating fundamental principles of Vietnamese laws are grounds for a Court to consider cancellation of those awards.

To define “contravening fundamental principles of Vietnamese laws,” Article 14.2.dd of Resolution No. 01/2014/NQ-HDTP explains that foreign arbitral awards violate effective basic rules for the formulation and implementation of Vietnamese laws. Hence, if a foreign arbitral award conflicts with these rules, it is considered to contravene the fundamental principles of Vietnamese laws.

In order to ensure conformity with either the arbitration agreement or the law of the country where the foreign arbitrator’s award has made, the compositions of foreign arbitrators and/or the procedures for dispute resolution that they employ must align with either one.

The Court requires foreign arbitrators’ awards to comply with either the arbitration agreement or the laws of the country where the award was made in order to be recognized. Failure to adhere to these conditions would result in non-recognition by the Court.

Therefore, if the parties decide to conduct arbitration proceedings in a foreign country, they should thoroughly examine the foreign arbitration rules and laws they have agreed to. This helps to guarantee the legality of the arbitration procedure and ensures recognition of the arbitration agreement in Vietnam.

The parties of the arbitration agreement must possess the legal capacity to enter into the agreement in accordance with the respective laws applicable to each party.

The Court considers the capacity to sign an arbitration agreement as one of the fundamental criteria for recognizing the enforcement of overseas arbitration awards in Vietnam. The granting of recognition based on criteria such as the inability of individuals to act on behalf of a legal entity, underage signatories, or physical or mental incapacity.

Regarding capacity determination, Vietnamese laws specify that the applicable laws must align with each party involved. Hence, the Court will rely on the appropriate laws to establish whether the signatory in the arbitration agreement has the capacity to do so.

Furthermore, the Court implements the conflict of laws principle pursuant to Articles 466 and 467 of the Civil Procedure Code 2015 to determine the applicable law for foreign individuals and legal entities. Foreign individuals establish their legal capacity based on the laws of their country of citizenship, while foreign enterprises and organizations adhere to the laws of the country where they establish such agencies or organizations.

Agencies, organizations, and individuals subject to the enforcement of judgments must be promptly and correctly informed about the appointment of the arbitrator, the dispute resolution procedures at foreign arbitrators, and their right to initiate litigation if desired.

These are the grounds on which courts may reject the enforcement of foreign arbitral awards due to a lack of equal opportunity for the judgment-enforced party to present their case, which encompasses the following scenarios:

+ The judgment debtor is not notified about the appointment of the arbitrator.

+ It is not informed about the proceedings of the arbitration.

+ The judgment debtor is unable to present their case.

Conclusion

In conclusion, foreign parties should take note of the requirements and regulations for the recognition and permission for enforcement of foreign arbitral awards in Vietnam. Ensuring complete and accurate completion of all necessary paperwork and translating and certifying all applicable documents is crucial. Additionally, we advice to seek legal assistance from a knowledgeable professional familiar with Vietnam’s laws and regulations to avoid unwanted legal disputes and ensure a smooth recognition and enforcement process of the foreign arbitral award in Vietnam.

HMLF is always available to offer assistance in understanding the procedures with authorities.

Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: +84 937215585
Website: hmlf.vn Email: [email protected]

Author

Join

0
who are already getting the benefits

Sign up for the latest advisory briefings and news within Global Advisory Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox.

Naturally you can unsubscribe at any time.

Newsletter Sign Up

About Us

Global Advisory Experts is dedicated to providing exceptional advisory services to clients around the world. With a vast network of highly skilled and experienced advisers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.

Contact Us

Stay Informed

Join Mailing List

GAE