Arbitration Update - Three Court Judgements
21 July 2021
Various court judgments in Vietnam published in the past couple of years had placed enforceability of foreign arbitral awards in Vietnam in a precarious situation.
Petitions for setting aside arbitral awards had been granted and enforcement of foreign arbitral awards rejected on the basis that the award is contrary to the “basic principles of the laws of Vietnam” without engaging on an analytical framework and clear guidelines on what is deemed contrary to the “basic principles of the laws of Vietnam”, putting arbitration users seeking enforcement in Vietnam on a long, uncertain, enforcement tunnel.
Of late, three judgments from Vietnamese courts shed some light at the end of the “basic principles” conundrum, perhaps a foreshadowing for Vietnam becoming one of the better known arbitration-friendly jurisdictions in ASEAN.
This update will discuss two court judgments that had rejected petitions to set aside arbitral awards, and one that had granted a petition to recognize and enforce a foreign arbitral award in Vietnam. The Court had, in two of these judgments, engaged in an analysis on why the contents of the arbitral awards did not violate the “basic principles of the laws of Vietnam”. While Vietnam is a civil law jurisdiction and therefore judgments can not be entirely relied upon from the perspective of precedent, as compared to common law jurisdictions, they do provide indications of the Vietnamese judiciary’s interpretations on these important issues.
We will also show that contrary to perceptions, misconceived or otherwise, Vietnam courts had been quick in acting upon the aforementioned petitions, viz:
- VIAC award was issued in 14 November 2020. The award debtor filed a petition to set aside the arbitral award on 20 November 2020. The petition was rejected by the Court on 9 March 2021 or 4 months after the arbitral award was issued.
- VIAC award was issued on 22 July 2020. The award debtor filed a petition to set aside, and the Court issued it decision rejecting the petition on 7 December 2020 or 5 months after the award was issued.
- SIAC award was issued on 2 May 2019. The petition for recognition and enforcement was filed in October 2019, the Court opened for hearing the petition on 21 February 2020.