Cases of invalid arbitration agreements in Vietnam

Cases of invalid arbitration agreements in Vietnam (Internet image)

1. What is arbitration agreement?

According to Clause 2, Article 3 of the Law on Commercial Arbitration 2010, an arbitration agreement means an agreement between the parties to settle by arbitration a dispute which may arise or has arisen.

2. Cases of invalid arbitration agreements in Vietnam

The arbitration agreement is invalid in the following cases:

- Disputes arise in the domains falling beyond the arbitration's jurisdiction defined in Article 2 of the Law on Commercial Arbitration 2010.

- The arbitration agreement maker has no competence defined by law.

- The arbitration agreement maker has no civil act capacity under the Civil Code.

- The form of the arbitration agreement is incompliant with Article 16 of the Law on Commercial Arbitration 2010.

- A party is deceived, intimidated or compelled in the course of making the arbitration agreement and requests a declaration that such arbitration agreement is invalid.

- The arbitration agreement breaches prohibitions specified by law.

3. Notable point when considering an arbitration agreement invalid in Vietnam

When considering an arbitration agreement invalid, it is necessary to note a number of cases as follows:

- “The dispute that arises is related to the fields beyond the competence of arbitral tribunals” prescribed in Clause 1 Article 18 of the Law on Commercial Arbitration 2010 means the case in which an arbitration agreement is negotiated to resolve the disputes related to the fields other than those mentioned in Article 2 of of the Law on Commercial Arbitration 2010.

- “The arbitration agreement is negotiated by incompetent persons as prescribed by law” in Clause 2 Article 18 of the Law on Commercial Arbitration 2010 means the arbitration agreement is negotiated by persons other than legal representatives or authorized persons, or authorized persons that act beyond his/her authorized entitlements.

If arbitration agreement principles are established by incompetent persons, such arbitration agreement is void. If the arbitration agreement is negotiated by incompetent persons but the persons competent to negotiate arbitration agreements accept it or do not object to it during the negotiation or arbitral proceedings, such arbitration agreement is not void.

- “The arbitration agreement is negotiated by persons in capable of civil acts as prescribed by law” prescribed in Clause 3 Article 18 of the Law on Commercial Arbitration 2010 means the minors or the persons incapable of civil acts.

In this case, the court must collect evidence that the person that negotiates the arbitration agreement are not capable of civil acts, including papers bearing his/her date of birth, a conclusion by a competent authority or declaration by a court that such per person is not capable of civil acts.

- “Format of the arbitration agreement is not conformable with Article 16 of the Law on Commercial Arbitration 2010” prescribed in Clause 4 Article 18 of the Law on Commercial Arbitration 2010. means the case in which the arbitration agreement is not negotiated using the methods mentioned in Article 16 of the Law on Commercial Arbitration 2010. and the guidance in Article 7 of Resolution 01/2014/NQ-HDTP.

- “Either party is cheated, threatened, or forced to reach the arbitration agreement” prescribed in Clause 5 Article 18 of the Law on Commercial Arbitration 2010. means the case in which either party is cheated, threatened, or forced according to Article 4 and Article 132 of the Civil Code.

- “The arbitration agreement contravenes the law” prescribed in Clause 6 Article 18 of the Law on Commercial Arbitration 2010. means any arbitration agreement in the cases prescribed in Article 128 of the Civil Code.

(Article 3 of Resolution 01/2014/NQ-HDTP)

Diem My

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