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ARBITRAL AWARDS

ARBITRAL AWARDS

CHALLENGES TO ARBITRAL AWARDS

Arbitral awards are final and binding, and may be challenged  only in certain circumst...

ARBITRAL AWARDS

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arbitration_in_vietnamCHALLENGES TO ARBITRAL AWARDS

Arbitral awards are final and binding, and may be challenged  only in certain circumstances. A party may request a domestic  arbitral award to be set aside within thirty days of the date the  award was granted. Upon receipt of a request to set aside an arbitral award, the local Provincial People’s Court will notify the applicant to pay fees. The court will accept review of the matter only after the applicable fees have been paid. The standard of review is de novo.   Under the Arbitration Law, the party seeking to set aside an arbitral award must enclose with its petition sufficient evidence to support the grounds on which the arbitral award should be set aside.  The court may adjourn a petition to set aside an arbitral award for up to sixty (60) days.  During this time, the arbitral tribunal may correct any errors in the arbitration proceedings to remove the grounds for setting aside the award.   Lastly, the court’s decision on a petition to set aside an award may not be appealed and is final and valid for enforcement.

ENFORCEMENT OF ARBITRAL AWARDS

In September 1995 Vietnam became a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “New York Convention”), and its  provisions have been incorporated into Vietnamese law.

+  Enforcement of domestic awards

 If a party fails to comply with an arbitral award within thirty  days after compliance is required, a party may submit a written request to the court’s judgment enforcement agency to enforce compliance with the arbitral award.

+ Enforcement abroad of awards made in Vietnam

Enforcement abroad of awards issued in Vietnam will depend  on the applicable arbitration law and whether there is  reciprocity between Vietnam and the country in which  enforcement is sought. The enforcement process should be easier in countries that are signatories to the New York Convention. This requires the courts of a country that has ratified the New York Convention to recognise and enforce foreign arbitral awards as court judgments unless one or more of the limited exceptions apply.

Provisions of the New York Convention have been incorporated into Vietnamese law. The Civil Proceedings Code (“CPC”) allows for bilateral enforcement of arbitral awards in accordance with the principles of the New York Convention.

+ Enforcement of  foreign arbitral awards in Vietnam

Like foreign court judgments and decisions, foreign arbitral awards cannot be enforced in Vietnam until they are formally recognised by the local Provincial People’s Court. The court’s judgment regarding enforcement of a foreign arbitral award is appealable. Foreign arbitral awards are arbitral awards made outside of Vietnam or within Vietnam by a foreign arbitrator mutually appointed by the parties.

As indicated above, subject to certain exceptions, Vietnamese courts are required to recognise and enforce an arbitral award made in another New York Convention state as if it were a judgment of a Vietnamese court.  Courts may also choose to recognise and enforce foreign arbitral awards on the basis of reciprocity without requiring membership to the New York Convention.  In practice, however, enforcement of foreign arbitral awards in Vietnam can be onerous and difficult. To date, only a limited number of foreign awards have been submitted to the enforcement  agencies and local courts for enforcement.  For a foreign arbitral award to be recognised and enforced by the Provincial People’s Courts, a petition must be lodged with the Ministry of Justice (“MOJ”). The petition must also include any documentation required by the relevant international treaty, if applicable. If the treaty does not set forth any procedural requirements, the petition must include a valid copy of the foreign arbitral award and a copy of the arbitration agreement of the parties.  Within seven (7) days, the MOJ must forward the petition to the appropriate Vietnamese court. The court assigned to consider the petition will notify relevant parties, agencies, or organisations. If the consideration process is not suspended, the court will formally meet to consider the petition. Ten (10) days prior to the court’s meeting, the procurator of the same jurisdiction may review the petition files.  Court meetings must be attended by a presiding panel of three judges, a prosecutor, and the person or legal representative of the person against  whom the petitioner is trying to enforce the award.  Formal recognition and enforcement of a foreign arbitral award does not involve a substantive review of the dispute,  but consideration of whether the procedural and provisional  requirements are met. A foreign arbitral award recognised for enforcement has the same effect as any civil judgment or decision of a Vietnamese court.

Foreign arbitral awards will not be recognised when:

• The parties to the arbitration agreement did not have the capacity to sign the agreement in accordance with the applicable law of each party;

• The arbitration agreement is unenforceable or invalid in accordance with the governing law, or the laws of the country in which the award was made if the arbitration agreement does not stipulate the governing law;

• The individual, body or organization against which enforcement is sought has not been properly notified of  the appointment of the arbitrator or the procedures for resolving the dispute by foreign arbitration, or had reasonable cause  for failing to exercise his/her/its right to participate in the proceedings;

• The foreign arbitral award was made in respect of a dispute which was not referred to arbitration by or which exceeds the scope of the request of the parties.  If it is possible to sever the arbitration award, that portion which was correctly referred to arbitration by the parties shall be recognized and enforced in Vietnam;

• The composition of the foreign arbitration panel, or the foreign arbitration procedure, was inconsistent with the arbitration agreement or the laws of the country in which the foreign arbitral award was made, in cases where such matters are not stipulated in the arbitration agreement;

• The foreign arbitral award is not yet enforceable or binding on the parties;

• The foreign arbitral award has been revoked or suspended by a competent body of the country in which the foreign arbitral award was made, or of the country whose law governs the arbitration agreement.

• The court of Vietnam concludes that:

- The relevant dispute cannot be resolved by arbitration in accordance with the laws of Vietnam;

- The recognition and enforcement of the foreign arbitral award is contrary to the fundamental principles of the laws of Vietnam.

The concept of a foreign arbitral award being “contrary to the fundamental principles of Vietnamese law” is still very vague and is the subject of some concern in relation to the enforcement of foreign arbitral awards in Vietnam.

Source: Hogan Lovells

 

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