In recent years, the settlement of commercial disputes by arbitration is increasingly popular because this method is faster, more secure, and more flexible than the traditional method of dispute resolution in Court. Specifically, statistics of disputes settled at the Vietnam International Commercial Arbitration Center (VIAC) show that in 2020, there were 211 disputes with a total value of 17,021 billion VND was settled at VIAC, an increase of 3.5 times more than the number of disputes recorded in 2010 was 63 cases [1].
In order to help businesses protect their legitimate rights and interests after a dispute has been resolved by commercial arbitration, within the scope of this article, PLF will provide information on enforcement methods for these judgments and decisions of the Arbitral tribunal in accordance with Vietnamese law.
1. What are the awards and decisions of the Arbitral Tribunal?
According to the provisions of Clause 9 Article 3 of the Law on Commercial Arbitration 2010, an arbitral decision means a decision of the arbitration tribunal issued during the process of dispute settlement. The commonly applied arbitration decision is the Decision recognizing the agreement of the parties. In addition, according to the provisions of the Law on Commercial Arbitration, an arbitral award means a decision of the arbitral tribunal to settle the entire dispute and terminate the arbitral proceedings. Thus, an arbitral tribunal’s decision is only considered an arbitral award when the above two conditions are met.
In terms of legal effect, an arbitral award is final and takes effect from the date of its issuance[2]. Accordingly, unlike the traditional method of settlement at the Court, one of the parties can go through the appeal procedure to a higher court to review the content of the judgment in case of disagreement with the judgment of the Court and the judgment is only enforced after the expiration of the time limit for appeal or protest which is 30 days from the date the judgment is issued, the arbitral award is not appealed or protested and takes effect immediately. However, it should be noted that the parties still have the right to request the arbitral tribunal to correct, interpret and supplement the award, which does not fundamentally change the content of the issued arbitral award.
2. Enforcement of awards and decisions of the Arbitral Tribunal
Stemming from the nature of a commercial dispute between enterprises, the parties are encouraged to voluntarily implement the decisions and awards of the Arbitral Tribunal. Normally, the parties voluntarily implement the awards or decisions without the intervention of a third party when these decisions and awards are in accordance with the common wishes of the parties, and they do not want to prolong the dispute resolution period.
As mentioned, the Arbitral Tribunal’s decisions and awards are binding on the parties, so if they do not voluntarily enforce them, the enforcement of these awards and decisions will be guaranteed through the system of civil judgment enforcement agency.
2.1 Timeframe for requesting judgment enforcement
According to the provisions of Article 30 of the Law on Civil Judgment Enforcement, the statute of limitations for requesting judgment enforcement is 05 years from the date the award or decision takes legal effect.
Thus, judgment creditors and judgment debtors have the right to request competent civil judgment enforcement to issue judgment enforcement decisions. If the time limit for performing an obligation is fixed in an award or decision, the time limit of 5 years is counted from the date the obligation is due.
For awards or decisions to be executed periodically, a time limit of 5 years is applied to each period from the date the obligation is due.
For cases of postponement or temporary suspension of judgment enforcement according to the provisions of the Law on Civil Judgment Enforcement, the time of postponement or suspension shall not be included in the statute of limitations for requesting judgment enforcement, unless the judgment creditor agrees that the judgment enforcement may be postponed. If the judgment enforcement requester can prove that due to an objective obstacle or a force majeure event, he or she cannot request the judgment enforcement on time, the time of having the objective obstacle or the force majeure event shall not be counted on the time limit for requesting judgment enforcement.
2.2 Conditions for enforcement of an Arbitral award
According to the provisions of Article 66 of the Law on Commercial Arbitration, there are 3 conditions that need to be met:
(i) the expiration of the enforcement period
(ii) the judgment debtor is involuntary execution
(iii) there is no request to cancel the arbitral award, the judgment creditor has the right to make an application to the competent civil judgment enforcement agency to enforce the arbitral award.
It should be noted that for an ad hoc arbitral award, the judgment creditor has the right to make an application to the civil judgment enforcement agency to enforce the arbitral award after the award is registered at the competent Court within 1 year from the date of issuance of the arbitral award. This provision comes from the nature of ad hoc arbitration as a form of dispute resolution agreed upon by the parties, so it usually does not have a permanent headquarters, an executive apparatus and a fixed list of arbitrators. Dispute settlement results are made based on an agreement selected from any one rule of procedure by the parties.
Therefore, after making an award, the Arbitral Tribunal will automatically dissolve. Therefore, in order to ensure the legitimacy of the arbitral award before requesting the competent civil judgment enforcement agency to enforce it, it must be recognized by the Court. Thus, before receiving the request of the judgment creditor, the civil judgment enforcement agency usually sends a written request to the competent Court to confirm whether the arbitral award has been canceled or not before accepting the request for judgment enforcement.
2.3 Enforcement competence of an Arbitral award
According to Article 8 of the Law on Commercial Arbitration 2010, the competent civil judgment enforcement agency to enforces awards and decisions of the Arbitral Tribunal is the civil judgment enforcement agency of the province or city directly under the Central Government where the Arbitral Tribunal makes its award. In case the place where the judgment debtor has property, works, resides, or has an office differs from that of the competent judgment enforcement agency, the entrusted for judgment enforcement shall comply with Article 55 of the Law on Civil Judgment Enforcement will be applied.
Thus, the civil judgment enforcement agency of the province or central cities where the Arbitral Tribunal has made an award may have to entrust the judgment enforcement to the place where the judgment debtor has assets, works, reside, or has headquarters. This can lead to a lengthy and costly time for the organization of judgment enforcement.
However, practice shows that there is no difference between the civil judgment enforcement activities of the arbitral tribunal’s awards, and decisions compared to the court’s judgments and decisions. Therefore, in order for the effective enforcement of the Arbitral Tribunal’s decision or award, in the course of judgment enforcement, the judgment creditor needs to cooperate in resolving as well as provide information on the judgment debtor such as assets and their judgment enforcement conditions so that the enforcer has a basis to verify and handle the enforcement as prescribed by law.
[1] Statistics of dispute settlement activities in 2020 published by VIAC
[2] Article 61 Law on Commercial Arbitration, 2010.
