6 interim urgent measures applied in arbitration cases in Vietnam

The application of interim urgent measures is necessary when parties need to protect their rights and cannot wait until the final decision of the arbitrator to resolve the dispute. It is a way to protect the requesting party’s rights and prevent unnecessary damage. This measure also helps to ensure fairness in resolving commercial disputes. However, the application of interim urgent measures must comply with legal provisions to avoid misuse and unintended consequences. The Law on Commercial Arbitration 2010 regulates interim urgent measures in commercial arbitration in Vietnam.

1. Interim urgent measure

Interim urgent measures can be defined as a decision from a competent state authority requiring one or more parties in a dispute to cease or limit a specific action while waiting for the final decision of the court/arbitrator to meet the urgent needs of the parties, protect evidence, preserve disputed property, ensure the resolution and enforcement of the dispute, and protect the legitimate rights and interests of the parties involved in the dispute.

Unless otherwise agreed by the parties (eg., if the parties agree not to sequester property in all cases, then when a dispute arises in arbitration, sequestration of the disputed property shall not be applied), disputing parties have the right to request that the Arbitration Council or Court apply interim urgent measures by the Law on Commercial Arbitration 2010 and related legal regulations.

When resolving disputes through arbitration, both the Arbitration Council and the Court have the power to apply interim urgent measures. Therefore, the party may request the Court or the Arbitration Council to apply interim urgent measures when necessary. Submitting a request to both the Court and the Arbitration Council simultaneously is not advisable. Because both institutions will carefully review the request before making a decision, and either might reject it if they believe the interim urgent is handle by the other institution. In addition, requesting the Court to apply interim urgent measures when the Arbitration Council cannot perform the request or an emergency demands immediate action.

2. List of Interim urgent measure

The provisions of the Law on Commercial Arbitration 2010 stipulate that interim urgent measures are applied in commercial disputes:

Prohibit changes to the current status of the disputed property:

This applies if there is evidence during the litigation process that the party currently occupying or holding the disputed property has engaged in acts such as dismantling, assembling, constructing, or other acts that alter the current status of the property.

Prohibit or compelling any disputing party to perform certain acts:

This is applicable if there is evidence during the litigation process that the party or any other individual, organization or agency has performed or failed to perform certain acts, this could affect the case’s resolution. These actions might also impact the legal rights and interests of related parties involved in the arbitration.

Seizure of the disputed property:

This applies if there is evidence during the litigation process that the party holding the disputed property has engaged in acts such as dispersing or damaging the property. The seized property can be detained and stored at the civil enforcement agency or delivered to one of the parties or a third party for management until a decision is made by the Arbitration Council.

Request for preservation, storage, sale, or disposal of any property of one or more disputing parties:

This applies in cases where the disputed property is at risk of damage, loss of value, depreciation, or distortion in order to minimize property damage in a timely manner.

Temporary payment orders between the parties:

This applies in cases where one of the parties has urgent needs. As requested by one of the disputing parties, the Arbitration Council may apply interim urgent measures regarding temporary payments between the disputing parties when the requesting party has demonstrated that the application of this measure is justifiable and necessary.

Prohibit the transfer of property rights for the disputed property:

This applies when the disputed property faces the risk of being sold, transferred, leased, or gifted during the arbitration proceedings. Such actions could harm other parties or hinder dispute resolution and property management.

3. Request for Interim urgent measure adopted by the Arbitration Council

The Arbitration Council and the Court are competent to apply interim urgent measures at the request of the involved parties in the arbitration proceedings.

However, the scope of this article only focuses on presenting the interim urgent measures adopted by the Arbitration Council.

The requesting party also needs to note the following:

• Before applying interim urgent measures, the Arbitration Council has the right to compel the requesting party to apply interim urgent measures to perform financial security obligations.
• The Arbitration Council has the authority to apply interim urgent measures only to the disputing parties and has no jurisdiction over third parties. Determine if a third party is included in the arbitration agreement when a request involves such a party. Typically, an arbitration agreement only binds the parties involved in the agreement.
• Before applying the measures, the Arbitration Council must ask the parties and check whether one of the parties has requested the Court and whether the Court has applied one or several interim urgent measures. If one of the parties has requested the Court to apply interim urgent measures, the Arbitration Council must refuse to apply them.

4. Conditions for not apply Interim urgent measure

According to the provisions of the Law on Commercial Arbitration 2010, the Arbitration Council can only apply interim urgent measures if the all four conditions are met. If any of these four conditions is missing, the Arbitration Council cannot apply interim urgent measures:

• There must be a party requesting the application of one or more interim urgent measures.
• The requesting party must provide documents and evidence demonstrating the necessity of applying those interim urgent measures.
• The requesting party for interim urgent measures has fulfilled the financial security obligation to ensure compensation for any damage caused by the improper application of interim urgent measures to the party subject to such measures.
• No party has requested the Court to apply interim urgent measures.

5. Procedure for applying Interim urgent measure

The procedure for applying interim urgent measures by the Arbitration Council is as follows:

Step 1:

The party requesting the application of interim urgent measures must submit a petition to the Arbitration Council.

• The contents of the petition include:
  • the date of the petition,
  • the name and address of the party requesting the application of interim urgent measures,
  • the name and address of the party subject to the application of interim urgent measures,
  • a summary of the dispute content, the reason for the need to apply interim urgent measures,
  • the specific interim urgent measures to be applied, and any specific requirements.
• Attached to the petition for the application of interim urgent measures, the requesting party must provide the Arbitration Council with evidence to support the need to apply such measures.

Step 2:

The Arbitration Council shall issue a document specifying the exact amount of money, property or other assets that must be provided as financial security corresponding to the potential damages that may arise from incorrect application of interim urgent measures in order to protect the interests of the party required to apply such measures.

Step 3:

The Arbitration Council will decide on a fixed amount of money, valuable metals, gemstones, or documents with value that the requesting party must provide. The requesting party must then deposit this into a sealed account at a bank chosen by the Arbitration Council.

Step 4:

The Arbitration Council shall consider and decide whether to apply interim urgent measures right after the requesting party has fulfilled the security measures required by the Arbitration Council. If the Arbitration Council rejects the request, it will notify the requesting party in writing of the request’s rejection, clearly stating the reasons for the denial.

The Arbitration Council must issue a decision to cancel interim urgent measures when one of the following circumstances occurs:

• The requesting party requests the cancellation: The requesting party must submit a request to cancel the interim urgent measures to the Arbitration Council.
• The party required to comply with the obligation has deposited the security or another party has fulfilled the security measures for the requested party; or the obligation of the requested party terminates under the provisions of the law: The Arbitration Council shall consider canceling the interim urgent measures.

The provisions on interim urgent measures in the Law on Commercial Arbitration 2010 have clearly defined the necessary conditions for applying this measure, ensuring the rationality and fairness of the Arbitration Council’s decision. This also helps to enhance the trust of parties participating in the commercial arbitration process. It also provides reliable legal solutions for commercial disputes. In summary, interim urgent measures play an important role in resolving arbitration disputes. Also it is crucial to have the correct application ensures the validity and effectiveness.