This is the recommendation of Prof. Dr. Le Hong Hanh on the legal framework for commercial arbitration at the Conference on "Effective use of commercial arbitration in Vietnam and Korea" organized by Vietnam International Arbitration Center (VIAC) in collaboration with Korean Commercial Arbitration Board (KCAB) and Seoul International Dispute Resolution Center (Seoul IDRC) on July 13.
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Resolving disputes by commercial arbitration is a trend among businesses in countries around the world nowadays. However, according to the data given at the Conference organized on July 13 in Hanoi by Vietnam International Arbitration Center (VIAC) in collaboration with Korean Commercial Arbitration Board (KCAB) and Seoul International Dispute Resolution Center (Seoul IDRC), dispute resolution by commercial arbitration in Vietnam is still quite limited.
Discussing this issue, Prof. Dr. Le Hong Hanh said that to overcome the imbalance in the ratio between settlement by conciliation and settlement by arbitration in Vietnam, it is necessary to improve the legal framework on commercial arbitration.
We would like to introduce the speech of Prof. Dr. Le Hong Hanh at the Conference mentioned above on issues related to dispute resolution by arbitration in Vietnam in the current period.
“Currently, important legal basis of commercial arbitration activities in Vietnam include: Ordinance on Commercial Arbitration, Law on Civil Judgment Enforcement, etc.
The legal mechanism for commercial arbitration is gradually improved over time. I would like to present the main provisions of the Law on Commercial Arbitration 2010 of Vietnam.
Firstly, the Law on Commercial Arbitration 2010 of Vietnam allows for a wide variety of dispute settlement. This Law allows qualified foreign arbitrators to act as arbitrators in Vietnam.
The current development and expansion of this Law is necessary because Vietnam has joined the WTO and integrated internationally, which leads to a huge need to resolve trade disputes.
VIAC is currently the most prestigious commercial arbitration center in Vietnam. Currently, there are 18 arbitration centers in Vietnam. Before the promulgation of the Law on Commercial Arbitration 2010 of Vietnam, VIAC was an experienced and leading commercial arbitration center, offering initiatives and proposals to the Government on arbitration.
Currently, there is a trend to promote the development of arbitration in Vietnam. Arbitration accounts for a high proportion of dispute resolution methods. I would like to make a comparison in resolving disputes by arbitration and by grassroots conciliation. Culture in Vietnam has a tradition of "closing the door and telling each other" first, then, if reconciliation cannot be achieved, then bringing it to a court of law to resolve the matter. Mediation has been around for a very long time.
Meanwhile, some cases resolved in arbitration are ineffective and take longer than in court, gradually losing trust of customers.
These are all reasons leading to imbalance in the ratio between settlement by conciliation and settlement by arbitration. Therefore, arbitration in Vietnam is still not really popular. I propose that it is necessary to continue to improve the legal framework on commercial arbitration, and to amend the Law on Commercial Arbitration, specifically, some of the following aspects need to be amended:
- Arbitrator's jurisdiction: It is very easy for the court to annul the Arbitrator's decision. The jurisdiction of the Court and Arbitration is not specific and clear. Therefore, the Law on Commercial Arbitration needs to amend a number of provisions, clearly stating in which specific cases the Court can cancel the Court's decision. Losing the Arbitrator's jurisdiction means losing the customer's trust.
- Promote the implementation of the Law on Commercial Arbitration: Continue to improve and strengthen the implementation of the Law on Commercial Arbitration in Vietnam.
I want to reaffirm that, if we want to develop commercial arbitration in Vietnam into a form of alternative dispute resolution (ADR), Vietnam must amend the Law on Commercial Arbitration.
Moreover, Arbitration decisions are easily annulled by courts in Vietnam. Sometimes the terms of the court's jurisdiction are not specific and clear. It is necessary to specify in which cases the court can annul an arbitration award, otherwise the power of the arbitration award will be lost. And when the arbitrator issues a decision and the court annuls it, making the arbitrator's decision invalid, businesses and investors will gradually lose trust.
Once again, I want to affirm that if we want to develop arbitration in Vietnam as a form of dispute resolution, we must improve Vietnam's arbitration law.”
Source: Prof. Dr. Le Hong Hanh
- Key word:
- Law on Commercial Arbitration 2010
