Arbitration is a dispute resolution method in which the parties agree that a neutral third party (the arbitrator or arbitration council) will issue a legal decision after the parties have had the opportunity to present their case. Arbitration includes two basic forms: institutional arbitration and ad hoc (case-specific) arbitration. When resolving disputes through ad hoc arbitration, one of the most important considerations for the parties is establishing the arbitration council. In this article, TNTP will present the legal regulations and considerations for establishing an ad hoc arbitration council.
1. Establishment of the ad hoc arbitration council according to the agreement of the parties
A fundamental characteristic of dispute resolution through ad hoc arbitration is the emphasis on the agreement of the parties. Therefore, before or after a dispute arises, the parties can agree on the establishment of an ad hoc arbitration council, the number of arbitrators to resolve the case, etc. Typically, the parties will choose one or three arbitrators to resolve the case. In cases where the dispute is resolved by three arbitrators, the parties or the arbitrators must agree to determine the chairman of the arbitration council.
2. Determining the competent court for the establishment of the ad hoc arbitration council
• If the parties have agreed on a specific court, then the competent court is the one chosen by the parties. However, this choice must comply with legal regulations, specifically: i) The parties concerned may reach an agreement to select one of the provincial courts of Vietnam to handle cases related to arbitration in Vietnam. The agreement on the selection of the court must be made into copies, specifying the cases to be handled by the court, the name of the court selected by the parties concerned; ii) The parties may reach an agreement on the selection of a court having authority over arbitration before or after a dispute arises. The agreement on the selection of a court must ensure that there is only one court that has authority over a specific arbitral activity or all arbitral activities.
• If the parties do not have an agreement on choosing the court, the court’s jurisdiction is determined as follows:
For the designation of arbitrators to establish the ad hoc arbitration council, the competent court is the court where the defendant resides if the defendant is an individual or where the defendant’s headquarters is located if the defendant is an organization. If there are multiple defendants involved in a request for appointment of arbitrators, the plaintiff may send the request to one of the courts of the administrative divisions where the residences or headquarters of such defendants are located. If the defendant resides or has its head office in a foreign country, the competent court is the court in the place in which the plaintiff resides or has its head office.
For the change of an arbitrator of an ad hoc arbitration council, the competent court is the court in the place in which the arbitration council settles the dispute.
3. Establishment of the ad hoc arbitration council according to legal regulations
If there is no agreement between the parties, the parties can apply the regulations of Article 41 of the 2010 Commercial Arbitration Law to establish the ad hoc arbitration council, as follows:
• Within 30 days after receiving the plaintiff’s petition, the defendant shall select an arbitrator and notify the selection of the plaintiff. Past this time limit, if the defendant fails to notify the plaintiff of the name of the selected arbitrator and the parties do not otherwise agree on the designation of an arbitrator, the plaintiff may request a competent court to designate an arbitrator for the defendant;
• For a dispute involving many defendants, these defendants shall agree to select an arbitrator within 30 days after receiving the plaintiff’s petition and enclosed documents. Past this time limit, if the defendants cannot select an arbitrator and the parties do not otherwise agree on the designation of an arbitrator, one party or all parties may request a competent court to designate an arbitrator for the defendants;
• Within 15 days after being selected by the parties or designated by the court, the arbitrators shall elect another arbitrator as the chairman of the arbitration council. When the arbitration council’s chairman cannot be elected and the parties do not otherwise agree, they may request a competent court to designate the chairman of the arbitration council;
• When the parties agree that their dispute shall be settled by a sole arbitrator but fail to select such arbitrator within 30 days after the defendant receives a petition if the parties do not agree to request an arbitration centre to designate an arbitrator, the competent court shall, at the request of one party or all parties, designate a sole arbitrator.
Within 7 days after receiving the above request of the parties, the president of the competent court shall assign a judge to designate an arbitrator and notify such to the parties. Within 07 working days from the assignment date, the judge shall consider the request for the replacement of arbitrators without holding a meeting or summoning the parties concerned. Within 03 working days from the decision date, the court shall send the decision to the parties concerned, the arbitral council, and the arbitrators.
Here is the content of the article “Formation of ad hoc arbitration councils” that TNTP sends to its readers. We hope the information provided above is helpful to those interested in this issue.
Best regards,
