What are the disputes that shall not be settled by arbitration in Vietnam?

Hello, Lawnet would like to answer as follows:

1. Conditions for dispute settlement by arbitration in Vietnam

Dispute settlement by arbitration is a method of dispute resolution in commercial activities. Currently, in commercial relations, this method is more and more widely used both nationally and internationally because of the following advantages:

- The procedure is quick, the parties can agree on a time and place for settlement, without going through many levels of trial like a court.

- Appointed arbitrators to establish arbitration councils to settle the case.

- The principle of non-public adjudication helps the parties maintain their reputations.

- ...

According to Article 05 of the Law on Commercial Arbitration 2010 of Vietnam, the conditions for dispute settlement by arbitration are as follows:

- A dispute shall be settled by arbitration if the parties have an arbitration agreement. An arbitration agreement may be made either before or after a dispute arises.

- When one of the parties being an individual to an arbitration agreement dies or loses his/her act capacity, such arbitration agreement remains valid for his/her heir or representative at law. unless otherwise agreed by the parties.

- When one of the parties being an institution to an arbitration agreement has to terminate its operation, goes bankrupt, or is dissolved, consolidated, merged, divided, split up or reorganized, such arbitration agreement remains valid for an institution that takes over the rights and obligations of the institution to such arbitration agreement, unless otherwise agreed by the parties.

Thus, a dispute shall be settled by arbitration if the parties have an arbitration agreement which may be made either before or after a dispute arises.

2. Disputes that shall not be settled by arbitration in Vietnam

According to the provisions of Clause 3, Article 2 of Resolution 01/2014/NQ-HDTP on guidelines for the Law on commercial arbitration 2010 in Vietnam, in one of the following cases, 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 to certify the parties’ agreement made;

- There is a decision to suspend the arbitral tribunal or arbitration center from resolving disputes as prescribed in Clause 1 Article 43, Points a, b, d, and dd Clause 1 Article 59 of LCA;

- The dispute is one of the cases mentioned in Clauses 1, 2, 3, and 5 Article 4 of Resolution 01 including:

+ The parties concerned have an agreement to resolve their disputes at a specific arbitration center which has now shut down without any arbitration center that inherit its cases, and the parties concerned fail to reach an agreement on another arbitration center to resolve their disputes.

+ Bother parties have an agreement on appointment of a specific arbitrator to resolve disputes, but when the dispute arises, because of force majeure events or objective difficulties, such arbitrator cannot resolve the case, or the arbitration center or court cannot find a substitute arbitrator as agreed by the parties concerned, and the parties concerned also fail to reach an agreement to select a substitute arbitrator.

+ Bother parties have an agreement on appointment of a specific arbitrator to resolve disputes, but when the dispute arises, such arbitrator refuses the appointment or the arbitration center refuses the arbitrator appointment, and the parties concerned also fail to reach an agreement to select a substitute arbitrator.

+ The goods/service seller and consumers have an overall agreement on provision of goods/services that contain arbitration terms drafted by the seller as prescribed in Article 17 of LCA, but the consumers refuse to have the dispute that arises resolved by an arbitral tribunal.

3. Forms of arbitration agreement in Vietnam

According to Article 16 of the Law on Commercial Arbitration 2010, the forms of arbitration agreements are prescribed as follows:

An arbitration agreement may be made in the form of an arbitral clause in a contract or in the form of a separate agreement.

An arbitration agreement must be in writing. The following forms of agreement may also be regarded as written form:

+ Agreement made through communication between the parties by telegram, fax, telex, email or other forms provided for by law;

+ Agreement made through exchange of written information between the parties;

+ Agreement recorded in writing by a lawyer, notary public or competent institution at the request of the parties:

+ In their transactions, the parties make reference to a document such as a contract, document, company charter or other similar documents which contains an arbitration agreement;

+ Agreement made through exchange of petitions and self-defense statements which reflect the existence of an agreement proposed by a party and not denied by the other party.

Thus, the arbitration agreement is completely independent of the contract. The change, extension, cancellation of the contract, the invalid or unenforceable contract shall not invalidate the arbitration agreement.

Best regards!

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