04 notes for enforcement of foreign arbitral awards in Vietnam

With the significant development of the international economy and trade exchanges, the demand for recognition and enforcement of foreign arbitral awards in Vietnam has also increased. However, the recognition and enforcement of foreign arbitral awards in Vietnam must comply some certain principles. Through this article, BLawyers Vietnam would like to introduce 4 notes to enforce foreign arbitral awards in Vietnam.

1. Foreign arbitrators’ awards are not contrary to fundamental principles of Vietnamese laws

According to Vietnamese laws, arbitral awards contravening the fundamental principles of Vietnamese laws shall be the ground for a Court to consider the cancellation of such award. Therefore, when foreign arbitrators’ awards are contrary to fundamental principles of Vietnamese laws, the Court may refuse a request for enforcement of a foreign arbitral award in Vietnam or accept a request for non-recognition of such award in Vietnam.

Article 14.2.dd of Resolution No. 01/2014/NQ-HDTP explained the definition of “contravening fundamental principles of Vietnamese laws”. Accordingly, “the foreign arbitral award contravenes the fundamental principles of Vietnamese laws” meaning the foreign arbitral award violates the effective basic rules for formulation and implementation of Vietnamese laws.

See more What are 3 conditions of a valid arbitration agreement under Vietnamese law?

2. Compositions of foreign arbitrators and/or procedures for the settlement of disputes conducted by foreign arbitrators must be conformable to the arbitration agreement or to the law of the country where the foreign arbitrator’s award has been made

By law, the Court will not recognize foreign arbitrators’ awards when compositions of foreign arbitrators and/or procedures for the settlement of disputes conducted by foreign arbitrators are not conformable to the arbitration agreement or to laws of the country where the foreign arbitrators’ award has been made.

Therefore, when conducting arbitration proceedings in a foreign country, the parties need to study the foreign arbitration rules and laws that the parties have agreed to consider the legality of that arbitration procedure. It helps the recognization of arbitration agreement in Vietnam.

3. Parties of the arbitration agreement must have the capacity to conclude such agreement according to the law applicable to each party

The capacity to sign an arbitration agreement is one of the basis for the Court to consider and recognize the enforcement of overseas arbitration awards in Vietnam. The grounds for this recognition include: physical, mental capacity, inability to act on behalf of a legal entity or an underage signatory (a minor).

Vietnamese laws stipulate that the applicable laws to determine capacity is “the law applicable to each party”. Therefore, the Court will base on the law applicable to each party to determine whether the person who signed the arbitration agreement has the capacity to sign such arbitration agreement.

In addition, Courts will also apply the principle of conflict of laws for foreign individuals in Article 466 and Article 467 of Civil Procedure Code 2015 for foreign legal entities to determine the applicable law. In which:

  • The legal capacity of foreigners who are individual shall be determined under the law of the country of which he/ she is a citizen;
  • The legal capacity of foreign enterprises, organizations shall be determined in accordance with the law of the country where such agency or organization is established.
4. Judgment-enforced agencies, organizations, and individuals must be promptly and conformably notified of the appointment of the arbitrator and of procedures for settling disputes at foreign arbitrators or their right to proceeding with the litigation

This is the ground for Courts to refuse to enforce foreign arbitral awards when the judgment-enforced party does not have an equal opportunity to present its case. It includes:

  • The judgment debtor has no information about the appointment of an arbitrator;
  • The judgment debtor has no information about the arbitration proceedings; or
  • The judgment debtor is unable to present his case.

See more Recognition and enforcement of foreign civil judgements and arbitral awards in Vietnam.

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com. We are more than happy to hear from you!

Date: 05 January 2022

Writer: Huy Nguyen

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