Delineate The Competence Of Commercial Arbitration And Courts In Vietnam

Delineate the competence of Commercial Arbitration and Courts in Vietnam

In case where the contents of a contract include an agreement on requesting both Commercial Arbitration and Court to be the dispute settlement bodies, enterprises may refer to Resolution No. 01/2014/NQ-HĐTP to clearly delineate the competence of such bodies.

Arbitration has the jurisdiction to settle the following disputes: Dispute between parties arising from commercial activities, dispute between parties of whom at least one conducts commercial activities, other disputes between parties stipulated by law to be resolved by arbitration.

It is necessary for enterprises to note that the abovementioned disputes are only entitled to arbitration settlement if the parties concerned have an arbitration agreement stated in their contract, or a separate agreement, or other agreement forms regarded as written documents like telegram, facsimile, e-mail, telex, etc.

However, Courts would still have the competence to resolve disputes with arbitration agreement in the following cases:

(i)   The Court issues a decision to annul the arbitral award or the decision made by the Arbitration on certifying the parties’ agreement;

(ii)   There is a decision suspending the Arbitration or Arbitration centre from resolving disputes;

(ii)   The dispute belongs to one of the following cases in which arbitration agreement cannot be performed, specifically:

a. The parties concerned have had an agreement to resolve their disputes at a specific Arbitration center, which has now shut down without any arbitration organizations to inherit its cases; simultaneously, the parties concerned fail to reach an agreement on another Arbitration center to resolve their disputes;

b. The parties concerned have had an agreement on the appointment of a certain Arbitrator. However due to force majeure events or objective difficulties, such Arbitrator cannot participate in resolving the case, or the Arbitration center or Court is unable to find the Arbitrator as agreed by the parties concerned, and the parties concerned also fail to reach an agreement to select a substitute Arbitrator;

c. The parties concerned have reached an agreement on appointing a specific Arbitrator to resolve disputes but such Arbitrator refuses the appointment or the Arbitration center refuses the Arbitrator’s appointment, and the parties concerned also fail to reach an agreement to select a substitute Arbitrator;

d. The enterprise and its consumers have an arbitration agreement term included in the general conditions drafted by the enterprise; however when the dispute arises, the consumers refuse to have the dispute resolved by an Arbitration .

In case where the parties have reached an agreement to have the dispute settled by both Arbitration and Court and such agreement remains unchanged or no new agreement on selecting a dispute resolution body is made and not subject to competent Court’s settlement for disputes with arbitration agreement, the dispute arising shall be handled as follows:

(i) If the plaintiff requests Arbitration to resolve the dispute before requesting the Court to do so or before the case is undertaken by the Court, the Court must refuse to undertake such case and return the petition once received. If the case has been undertaken, the Court shall issue a decision to terminate the adjudication since it is not under the competence of the Court and return the petition and documents enclosed therewith to the plaintiff;

(ii) In case the plaintiff requests the Court to resolve the dispute, the Court must determine whether or not an Arbitration has been requested by either party to handle the case. If the Court finds that the dependant or the plaintiff has requested an Arbitration to resolve the dispute, the petition will be returned to the plaintiff. If neither the dependant nor the plaintiff has requested an Arbitration to resolve the case, the Court shall undertake the case and handle it under common procedures. In case where the Court has undertaken the case but then figures that an Arbitration  has been requested to resolve such case before it is undertaken by the Court, the Court shall issue a decision to terminate the adjudication since it is not under the competence of the Court and return the petition and documents enclosed therewith.

PLF Law Firm 

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