Commercial dispute settlement through commercial arbitration is a method of settling the dispute out of the Court. The outstanding development of international trade makes the need for commercial dispute settlement through commercial arbitration highly increased for both Vietnamese and foreign enterprises.
Advantages of the commercial dispute settlement through commercial arbitration in the comparison with the commercial dispute settlement through the Court
Two outstanding internal strengths must be mentioned are the neutrality of arbitrators and the ability to enforce the arbitral awards within Vietnam territory and outside Vietnam territory.
Regarding the neutrality of arbitrators, the parties to a dispute have the right to agree upon the applicable law and procedural language themselves in case the dispute involving foreign elements. In addition, allowing the parties to freely agree to choose and decide the number of arbitrators participating in the settlement creates a great advantage for the commercial dispute settlement through commercial arbitration for the complex case which requires a high level of expertise in certain fields. This selection of the commercial dispute settlement through commercial arbitration also helps the parties to the dispute involving foreign elements to minimise the psychological disadvantage when the dispute is resolved by the Court of the other party’s country.
Regarding the ability to enforce the arbitral awards when taking the commercial dispute settlement through commercial arbitration in Vietnam, the arbitral awards are guaranteed for enforcement by the competent civil judgment enforcement agency. Internationally, the arbitral awards will be recognised and enforced abroad under the New York Convention 1958 to which Vietnam is a signatory (as of August 2020 the Convention has 165 members, including countries and regions).
Regarding the legal effect, the arbitral award is final, so the dispute settlement process will be minimised to save time and travel costs. In addition, the arbitration procedure also allows the parties to flexibly agree on time and location providing the most favourable conditions for the parties to protect their legitimate rights and interests.
Forms of commercial arbitration when taking the commercial dispute settlement through commercial arbitration
The Law on Commercial Arbitration 2010 provides two forms, including:
- Institutional Arbitration means a form of dispute settlement at an Arbitration centre under rules of procedure of such Arbitration centre; and
- Ad hoc Arbitration means a form of dispute settlement under the Law on commercial Arbitration 2010 and the sequence and procedure agreed by the parties
An award of the ad hoc arbitration shall be registered at the Court in the place in which the arbitration council pronounced the award before requesting a competent civil judgment enforcement agency to organise the enforcement of such award. Registration or non-registration of an arbitral award does not affect the contents and legal validity of the award.
Conditions for taking commercial dispute settlement through commercial arbitration
The parties to a dispute must jointly make a written Arbitration agreement either before or after a dispute arises. An Arbitration agreement may be created as either a part of the contract or in a separate agreement. In any form, the Arbitration agreement is also a completely independent agreement from the contract, so any modification, extension, cancellation of the contract, the invalidity of the contract will not invalidate the Arbitration agreement.
Note, unless otherwise provided by discrete laws, the statute of limitations according to the commercial dispute settlement through commercial arbitration is within 02 years from the time of infringement of lawful rights and interests.
Above is an overview of commercial dispute settlement through commercial arbitration. If you have trouble with finding a law firm providing legal assistance regarding the commercial dispute settlement through commercial arbitration, please do not hesitate to contact us: Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi, and Danang. Phuoc & Partners is also rated as one of the leading consulting firms specialising in business law in Vietnam that has leading practice areas in the legal market such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing customers with optimal and effective civil litigation service.