Notes on the Form of Dispute Resolution through Commercial Arbitration in Vietnam
For businesses operating in the increasingly complex international trade environment, resolving disputes fairly and effectively has become crucial. Commercial arbitration has emerged as a vital tool for efficiently addressing trade disputes, both domestically and internationally. This article sheds light on the significance of commercial arbitration, emphasizing key features of this dispute resolution method, including the rights businesses can exercise when opting for commercial arbitration in Vietnam.
Commercial arbitration serves not only as a means of resolving disputes but also as a crucial mechanism for protecting businesses’ rights in international trade. In Vietnam, it has gained attention and widespread application in recent times.
Presently, Vietnam offers three main methods for dispute resolution: mediation, arbitration, and litigation. These methods ensure objectivity and legality in the dispute resolution process. Each method has its advantages, catering to different dispute scenarios, providing a diverse range of options for disputing parties.
Among these methods, commercial arbitration is gaining popularity in Vietnam, preferred by businesses over litigation when mediation efforts prove unsuccessful.
In cases where mediation or negotiation fails, parties require an authoritative body to oversee dispute resolution objectively. Arbitrators, as experienced individuals, offer independent advice, making them more acceptable to disputing parties.
The flexibility and speed of the arbitration process, coupled with its effectiveness in resolving disputes, are highly valued by businesses. Arbitral decisions have a global nature and can be enforced in multiple countries, creating an efficient international dispute resolution mechanism. The reduced political risk, feasibility, and compliance with arbitral decisions are strengths of this method.
Rights of Disputing Parties
When choosing commercial arbitration for dispute resolution, parties have various rights under the 2010 Law on Commercial Arbitration, including:
- Right to mutual agreement: The law places special emphasis on parties’ right to mutually agree on arbitration aspects such as arbitrator selection, arbitration center, or termination of dispute resolution. Agreements may be made before or after the dispute arises.
- Right to choose the form and organization of arbitration: If parties cannot agree on the arbitration authority, businesses have the right to choose the form and organization of arbitration according to the claimant’s requirements, as stipulated in Article 43 of the 2010 Law on Commercial Arbitration.
Through these rights, disputing parties can actively and flexibly participate in the commercial arbitration process, ensuring the most effective protection of their rights and interests.
Right to Request Supplementary Award or Annulment of Arbitral Award
According to the 2010 Law on Commercial Arbitration, after the issuance of a commercial arbitral award, there is a possibility to request a supplementary award or annulment of the award in specific circumstances. Below is a detailed description of this right:
- Request for Supplementary Award:
- In cases where disputing parties do not agree with the arbitral award and require adjustments or additional information related to the claims presented during the proceedings but not included in the award, they have the right to request the Arbitral Tribunal for a supplementary award.
- Notice of this request must be promptly sent to the other party as stipulated in Article 63(4) of the 2010 Law on Commercial Arbitration.
- The Arbitral Tribunal will review the request, and if deemed justified, they will issue a supplementary award within 45 days from the date of receiving the request.
- Request for Annulment of Arbitral Award:
- If there is evidence demonstrating that the arbitral award falls under the circumstances for annulment as specified in Article 68(2) of the 2010 Law on Commercial Arbitration, the disputing party has the right to request the Court to annul the arbitral award.
- The party requesting the annulment must prove their request, except in cases of annulment based on Article 68(2)(d) of the 2010 Law on Commercial Arbitration.
- The Court will examine the case and actively verify evidence to decide whether to annul the arbitral award.
It is essential to note that the swift processing of arbitration proceedings can be a vulnerability. Therefore, the right to request a supplementary award or annulment of the arbitral award is crucial to ensure accuracy and fairness in the dispute resolution process.
Assessment of the Future Development Potential of the Commercial Arbitration System
In the foreseeable future, as parties involved in disputes increasingly opt for arbitration as the preferred method of dispute resolution, the commercial arbitration system in Vietnam and the region may experience significant advancements, including:
- Enhanced Awareness of Arbitration Procedures:
- Growing awareness of the advantages of commercial arbitration within the business community.
- Increased understanding and trust in the dispute resolution capabilities of arbitrators, especially in sectors involving numerous international commercial transactions.
- Legal Development and Government Support:
- Updating and refining legal regulations related to commercial arbitration could create a favorable legal environment.
- Government involvement in establishing supportive infrastructure for the arbitration system, such as training and developing human resources.
- International Collaboration:
- Collaboration with international and regional arbitration organizations can enhance the quality and reputation of the arbitration system nationally and regionally.
- Applying international rules and standards may make the arbitration system more universal and widely accepted.
- Training Enhancement and Quality Improvement of Arbitrators:
- Investment in training and skill development for arbitrators ensures they possess the necessary knowledge and skills to resolve disputes accurately and fairly.
- Uniformity and excellence in professional standards contribute to the overall quality of commercial arbitration procedures.
- Market and Investment Growth:
- Strengthening trade and investment cooperation in the region may increase the demand for commercial arbitration.
- Market development can lead to more disputes, consequently creating a higher demand for effective dispute resolution mechanisms.
However, it is essential to note that there are challenges and factors that need addressing for the robust development of the arbitration system. These include improving the quality of procedures, ensuring transparency and fairness, as well as maintaining and developing a high-quality pool of arbitrators. Continuous efforts in these areas will be crucial for the sustained growth and effectiveness of the commercial arbitration system.
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