If there are proven that arbitrators have received undue pecuniary, can arbitral awards be annulled in Vietnam?

If there are proven that arbitrators have received undue pecuniary, can arbitral awards be annulled in Vietnam?

According to Point d, Clause 2, Article 14 of Resolution 01/2014/ND-HDTP stipulating as follows:

2. The court shall annul the arbitral awards prescribed in Article 58 and Article 61 of LCA in one of the cases below:

a) “There is no arbitration agreement or the arbitration agreement is void”, meaning the arbitration agreement is one of the cases in Article 6 and Article 18 of LCA, or Articles 2, 3, and 4 of this Resolution.

b) “The composition of the arbitral tribunal or the arbitral proceedings are not conformable with agreement of the parties concerned or regulations of LCA”, meaning the case in which the arbitral tribunal fails to comply with the agreement of the parties on composition of the arbitral tribunal or arbitration rules, or the arbitral tribunal fails to adhere to regulations of LCA, and such violation is considered serious by the court if the arbitral tribunal fails to make rectification at the request of the court as prescribed in Clause 7 Article 71 of LCA.

Example 1: A party is not promptly and legitimately notified of the petition as prescribed in Article 32 of LCA. This infringes upon the right to establish an arbitral tribunal and is considered a serious violation against arbitration rules as prescribed in Point b Clause 2 Article 68 of LCA.

Example 2: The parties agree that the dispute shall be resolved by an arbitral tribunal composed of three arbitrators and shall apply Vietnam’s law. However, in fact, the case is handled by an arbitral tribunal composed at only one arbitrator, and the law applied is Singapore’s law. This situation is protested against by a party but such protest is not accepted by the arbitral tribunal. This is a serious violation against arbitration rules prescribed in Point b Clause 2 Article 68 of LCA.

c) “The dispute is beyond the competence of the arbitral tribunal”, meaning the case handled by the arbitral tribunal is related to the fields beyond its competence as prescribed in Article 2 of LCA, or the arbitral tribunal handles the dispute without being requested by the parties concerned, or the arbitral tribunal acts beyond the scope of the agreement on settling the dispute by arbitration.

On principle, the court shall only annul the contents beyond the competence of the arbitral tribunal, not the whole arbitral award. If the decision of the arbitral tribunal on the issues within the competence of the arbitral tribunal can be separated from that beyond the competence of the arbitral tribunal, the decision on the issued requested to be settled by arbitration shall not be annulled.

If the decision of the arbitral tribunal on the issues within the competence of the arbitral tribunal cannot be separated from that beyond the competence of the arbitral tribunal, the court shall annul the whole arbitral award.

d) “Evidence that is provided by the parties and based on by the arbitral tribunal to give the arbitral award is false; arbitrators have received undue pecuniary or other advantage of any kind offered by a party and thus threaten the objectivity and fairness of the arbitral tribunal”

The court shall consider the request for identification of false evidence if such claim can be proven and the evidence must affect the issuance of the arbitral award, the objectivity and fairness of the arbitral tribunal. The court shall consult the regulations of LCA, arbitration rules, agreement among the parties, the rules for considering and assessing evidence applied by the arbitral tribunal when handling the case to identify false evidence.

dd) “The arbitral award contravenes the basic principles of Vietnam’s Law", meaning the arbitral award violates the effective basic rules for formulation and implementation of Vietnam’s Law.

When considering a request for cancellation of an arbitral award, the court must determine whether the arbitral award violates any basic rule of law, how such rule affect the dispute settlement by arbitration.

The court shall only cancel an arbitral award after proving that it contravenes one or some basic rules of Vietnam’s law, which are not adhered to by arbitral tribunal when issuing the arbitral award, and the arbitral award seriously infringe upon the interest of the State, the lawful rights and interests of either party or some third person.

Example 1: The parties concerned have an agreement on dispute settlement and such agreement does not contravene the law or social ethics, but the arbitral tribunal does not recognize such agreement in the arbitral award. In this case, the arbitral award violates the right to free and voluntary business agreements prescribed in Article 11 of the Law on Commerce and Article 4 of the Civil Code. The court shall consider canceling this arbitral award because it contravenes a basic rule of Vietnam’s law which is prescribed in the Law on Commerce and the Civil Code.

Example 2: A party under the dispute provides evidence that the arbitral award involves coercion, fraud, threats, or bribery. In this case, the arbitral award violates the rule “arbitrators must be independent, objective, and impartial” prescribed in Clause 2 Article 4 of LCA.

Thus, according to the above provisions in Vietnam, when an arbitrator has received undue pecuniary or other advantage of any kind offered by a party, and threaten the objectivity and fairness of the arbitral tribunal that the other party can prove, may be considered for annulment of that arbitral award. 

In this case, you can prove that the Arbitrator received undue pecuniary from company A, then you may be considered to annul the existing arbitral award in Vietnam.

When an arbitrator does not sign the arbitral award, does the award take effect in Vietnam?

According to Article 61 of the Law on Commercial Arbitration 2010 stipulating contents, form and validity of an arbitral award:

1. An arbitral award must be in writing and contain the following principal details:

a/ Date and place of issuance;

b/ Names and addresses of the plaintiff and defendant;

c/ Name and address of the arbitrator;

d/ Summary of the circumstances of the petition and matters under dispute;

e/ Grounds for issuing the award, unless the parties agree that it is unnecessary to indicate these grounds;

f/ Results of the dispute settlement;

g/ Time limit for enforcement of the award;

h/ Allocation of arbitration and other relevant expenses;

i/ The arbitrator's signature.

2. When the arbitrator fails to sign the arbitral award, the arbitration council's chairman shall indicate such failure in the arbitral award and clearly state the reason. In this case, the arbitral award remains effective.

3. An arbitral award shall be issued right at a meeting or within 30 days after the end of the last meeting.

4. An arbitral award shall be sent to the parties immediately after the date of its issuance. The parties may request the arbitration center or ad hoc arbitration council to issue copies of the arbitral award.

5. An arbitral award is final and takes effect on the date of its signing.

According to this Article, when an arbitrator fails to sign an arbitral award, the arbitration council's chairman must record this in the arbitral award and clearly state the reason. In this case, the arbitral award is still valid in Vietnam.

What are regulations on right to request compliance with arbitral awards in Vietnam?

Pursuant to Article 66 of the Law on Commercial Arbitration 2010 stipulating right to request compliance with arbitral awards, as follows:

1. Past the lime limit for complying with an arbitral award, if the party to comply with the award fails to voluntarily comply with it and docs not request cancellation of the award under Article 69 of this Law. the party in favor of whom/which the arbitral award is issued may request in writing the competent civil judgment enforcement agency to enforce the award.

2. For ad hoc arbitration's awards, the creditor may request in writing the competent civil judgment enforcement agency to enforce the award after it is registered under Article 62 of this Law.

With this provision in Vietnam, right to request compliance with arbitral awards is exercised as above.

Best Regards!