Arbitration as a method of resolving private disputes has a long history of formation and development on the national and international levels. In Vietnam, this method is gradually being used when disputes arise. In this article, TNTP will present to readers the basic contents to keep in mind when resolving disputes by Arbitration.
1. The concept of Commercial Arbitration
According to the provisions of Clause 1, Article 3 of the Law on Commercial Arbitration 2010 (Law on Commercial Arbitration 2010), Commercial arbitration means a mode of dispute settlement agreed by the parties and to be conducted under this Law. Accordingly, arbitration is a form of dispute resolution through the activities of an arbitrator as an independent third party to end the conflict by issuing a decision that forces the parties to implement.
2. Conditions for dispute settlement by arbitration
A dispute shall be settled by arbitration if the parties have an arbitration agreement that must be legally valid effective in practice, and enforceable. This principle is stipulated in Articles 5 and 6 of the Law on Commercial Arbitration 2010. As follows:
Article 5 of the Law on Commercial Arbitration 2010:
“Article 5. Conditions for dispute settlement by arbitration
1. A dispute shall be settled by arbitration if the parties have an arbitration agreement. An arbitration agreement may be made either before or after a dispute arises.
2. When one of the parties being an individual to an arbitration agreement dies or loses his/her act capacity, such arbitration agreement remains valid for his/her heir or representative at law. unless otherwise agreed by the parties.
3. When one of the parties being an institution to an arbitration agreement has to terminate its operation, goes bankrupt, or is dissolved, consolidated, merged, divided, split up or reorganized, such arbitration agreement remains valid for an institution that takes over the rights and obligations of the institution to such arbitration agreement unless otherwise agreed by the parties”.
Article 6 of the Law on Commercial Arbitration 2010:
“Article 6. Courts’ refusal to accept cases in which there is an arbitration agreement
In case the disputing parties have reached an arbitration agreement but one party initiates a lawsuit at a court, the court shall refuse to accept the case unless the arbitration agreement is invalid or unrealizable”.
3. Characteristics of dispute resolution by Arbitration
Firstly, the finality of the award: The arbitrator’s award is final and the parties are forced to implement it. Most awards are enforced with the help of the state except in cases where the award is set aside by the court primarily because of a violation of the arbitration proceedings.
Secondly, international recognition: Arbitral awards issued in one member state may be recognized and enforceable by all other member states under the New York Convention 1958.
Thirdly, flexibility: The parties can choose the location of the arbitration, the applicable law, the language used in the arbitration process, the procedural rules, and the arbitrator.
Fourthly, the time of dispute resolution: Because there is only one level of trial, the settlement of disputes at arbitration will usually be faster than the trial in court.
Fifthly, confidentiality: All information about disputes resolved in arbitration is kept confidential. Under the request of the parties, the hearing shall be conducted only in the presence of the parties, and the award shall only be awarded to the parties if they do not otherwise agree. This is one of the basic principles of commercial arbitration in Vietnam. According to Clause 4, Article 4 of the Law on Commercial Arbitration 2010: “4. Dispute settlement by arbitration shall be conducted in private, unless otherwise agreed by the parties”.
Above is the article “Key considerations for arbitration in dispute resolution” that TNTP sent to readers. If there are any further questions, please do not hesitate to contact us.