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Friday, October 7, 2022

Bringing arbitration law to international standards

Updated: 14:46’ - 31/05/2010

The Law on Commercial Arbitration will be considered by the National Assembly in its current session. Tran Huu Huynh, Director of the Legal Department of the Vietnam Chamber of Commerce and Industry, Vice President of the Vietnam International Arbitration Center, and a consultant on  the drafting of the law,  spoke to Vietnam Law & Legal Forum.


Tell us about the Vietnam International Arbitration Center.

The Vietnam International Arbitration Center (VIAC) is the oldest and biggest arbitration institution in Vietnam. Established alongside the Vietnam Chamber of Commerce and Industry in 1993 pursuant to Prime Minister’s Decision No. 204/TTg, VIAC effected the merger of the Foreign Trade Arbitration Tribunal (established in 1963) and the Maritime Arbitration Tribunal (established in 1964). It now has 123 arbitrators (including 6 foreign ones), who are leading experts in economics and domestic and international trade. With its large number of arbitrators, VIAC is capable of settling complex disputes in different technical fields.

VIAC arbitrators operate on principles of independence, objectivity impartiality to guarantee the legitimate rights and interests of involved parties.

From 2003, when the Commercial Arbitration Ordinance was issued, to the end of 2009, VIAC has received 218 cases, or an average 31 annually and over 170% more than before the promulgation of the Ordinance. Over 80% of these cases have involved foreign parties coming from 30 countries and territories.

The effect of an arbitral award is similar to that of a court ruling and, under the Commercial Arbitration Ordinance, an arbitral award is final. A party which fails to voluntarily comply with such an award will be forced to do so by law.

What do Vietnamese and foreign businesses expect from the Commercial Arbitration Law?

To make a long-term investment, businesses need a stable, transparent and effective legal environment. They want a quick, accessible and effective dispute resolution mechanism which protects their lawful rights and interests. They also expect a Commercial Arbitration Law which respects parties’ free will to negotiate and fully provides mechanisms for court intervention and quick and effective enforcement of arbitral awards.

Arbitral institutions appeared in Vietnam in the early 1960s and the Government issued a number of regulations governing this field. However, legal documents on arbitration remained inconsistent and lacked mechanisms to operate effectively.

The main reason were inconsistent commercial laws which failed to promptly govern arising trade relations, given the economy’s transition from a centralized to market system. At that time, much attention was paid to state administration rather than market factors. Therefore, legal documents on arbitration, especially Decree No. 116/CP, mostly dealt with the state administration of arbitration by introducing a host of conditions to set up arbitration centers and criteria for arbitrators while failing to provide basic provisions governing arbitration, such as invalid arbitration agreements and their consequences, court intervention in the designation and change of arbitrators, application of temporary measures, and the recognition and enforcement of arbitral awards.

How were the business community’s opinions received in the drafting process of the Law?

The Commercial Arbitration Law drafting committee invited experts in arbitration onto the advisory council and the editing team. The committee studied and evaluated the Commercial Arbitration Ordinance and assessed operating arbitral institutions. It also held nearly 20 seminars on arbitral operations in other countries, which were attended by domestic and foreign experts, business representatives, lawyers and arbitrators nationwide.

Most of the hurdles in the 2003 Commercial Arbitration Ordinance were addressed in the Commercial Arbitration Bill as a result of the drafting committee’s serious consideration of the opinions of experts and businesses.

Does the Commercial Arbitration Bill completely conform with international commercial arbitration?

The Bill basically conforms with international commercial arbitration law, especially the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL). The Model Law, which was passed by over 50 countries and territories, is regarded as the golden criteria on international commercial arbitration. Most institutions of the Bill conform with the Model Law such as respecting the free will to negotiate of involved parties in selecting arbitral forms, arbitrators and venues for arbitration, language of arbitration and applicable law to settle foreign-involved disputes; determining mechanisms for court intervention while ensuring arbitral institutions’ independence from courts; and authorization of arbitral tribunals to take temporary urgent measures.

Once Vietnam has a commercial arbitration law in conformity with international practice, foreign businesses will be more confident in selecting Vietnamese arbitral institutions for settling disputes. (VLLF)-


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