Some Legal Tips For Recognition And Enforcement Of Foreign Arbitration Award In Vietnam

Updated on: 20/11/2019

Procedural steps to enforce a foreign arbitration award in Vietnam

Currently, the issue on recognition and enforcement of a foreign arbitration award in Vietnam are governed by Part VI of the Civil Procedure Code. Pursuant to this Code, a definition on a foreign arbitration award (the “Award”) is given with the details that foreign arbitration award means an award rendered outside the territory of Vietnam or within the territory of Vietnam by foreign arbitrators selected by the parties concerned to resolve disputes arising from legal business, commercial or labor relations.[1] And the authority body for recognition and enforcement of the award shall be the provincial-level People’s Courts of Vietnam (the “Court”).[2]

Basically, the Award is not automatically accepted by enforcement agencies for enforcement in Vietnam. The Award is only recognized and enforced subject to the approval of the Courts of Viet Nam. In principle, the Court shall consider the recognition and enforcement of the award in consistency with the following two principles: [3]

Such Award has been made in, or by arbitrators of a country which is a party to a relevant international treaty of which Viet Nam is a participant or a signatory; or
On a reciprocal basis without the condition that Vietnam and the relevant country are signatories or participants of a relevant international treaty.

As stipulated, the persons who are entitled to request an execution of the Award or their lawful representatives (collectively referred to as the “Applicants”) are capable of submitting the applications to the Court for requesting the same content in one of the following circumstances:

The persons against whom enforcement is sought permanently reside and work in Vietnam; or
The bodies or organizations against which enforcement is sought have principle offices in Vietnam; or
The assets relating to the enforcement of the Award are located in Vietnam at the time of filing the applications.[4]

The Award recognized and permitted to be enforced by the Court in Vietnam shall be of the same force and effect as any other decision of the court of Vietnam which is in force and shall be enforced in accordance with the procedures for enforcement of civil judgments.[5]
Overall, there are procedural steps to request recognition and enforcement of the award in Vietnam as follows:

Step 1: Filing a dossier with the Ministry of Justice

Although the Court of Vietnam is the authority body for recognition and enforcement of the award, the application dossier must be lodged with the Ministry of Justice of Vietnam. The application dossier consists of the following required documents:

The request application for recognition and enforcement[6]:

All of the following contents shall include in the application:

(i) Full names and addresses of residence places or workplaces of either the applicants and their lawful representatives in Vietnam; or full names and head-office addresses of the applicants must be fully stated in case of agencies or organizations;

(ii) Full names and addresses of residence places or workplaces of the individual obligors, or full names and head-office addresses must be described if the obligors are agencies or organizations; and
(iii) Requests of the applicants.

The valid copy of the Award.[7]
The valid copy of the arbitration agreement among the parties to the dispute on resolution of their dispute which may arise or have arisen.[8]
Others as required by the Court or in accordance with the international treaties which Vietnam has signed or acceded.

Of note, the application and the said supported documents in foreign languages must be submitted in conjunction with the Vietnamese translations lawfully notarized/certified.

Step 2: Transfer of the application dossier to the Court of Vietnam

Within seven (7) days from the date of receipt of the application dossier, the Ministry of Justice shall transfer it to the Court where the obligors reside, work in Vietnam; or their headquarters are located in Vietnam; or the assets relating to the enforcement of the Award are located in Vietnam.[9]

Step 3: Receipt and acceptance of the application dossier

Within three (3) working days as from the date of receipt of the application dossier from the Ministry of Justice, the Court must accept the dossier and notify the obligors as well as the Procuracy of the same level for understanding. At the same time, the Court is entitled to request the applicants to clarify vague details in the dossier.[10]

Step 4: Consideration of the application dossier

Within two (2) months as from the date of acceptance of the application dossier, the Court shall, on a case-by-case basis, issue one of the following decisions:

(i) To suspend temporarily its consideration of the application;
(ii) To suspend its consideration of the application; or
(iii) To open a court meeting to decide the application.[11]

Step 5: Court hearing

The meeting must be opened by the Court in twenty (20) days from the issuance date of the decision on opening the meeting.[12] Accordingly, the consideration of the application dossier shall be carried out through this meeting by a Trial Panel including three judges. It is required that the procurator of the Procuracy of the same level must participate in the meeting. The obligors or their representatives must also be present at the meeting unless they are properly summoned twice but fail to be present.[13]

Step 6: Service of the decision of the Court to

The Court shall send its decision to the involved parties and the Procuracy of the same level.

Step 7: Appeal against the court decision

Within fifteen days as from the issuance date of the decision or the date of receipt of the decision by the involved parties, the involved parties or their lawful representatives may lodge appeals against such decision.

The Procuracy of the same level or the Supreme People’s Procuracy has the right to protest against the decision of the Court. The time limit for the Procuracy of the same level or the Supreme People’s Procuracy to lodge the protest is fifteen days or thirty days respectively commencing from the issuance date of this Decision.[14]

Step 8: Review of the appeal/the protest

The Appellate Court of the Supreme People’s Court shall review the decision by the provincial-level People’s Court which is appealed or protested within one month to a maximum of two months. Accordingly, the decision of the Supreme People’s Court shall be the final having binding effect.[15]

Step 9: Request for enforcement of the Award

In case where the obligors fail to voluntarily honor the Award, the applicants and the obligors shall base on such Award to request the competent enforcement agencies to issue the decisions for execution of the Award by filing the requests for enforcement of the Award with or directly present the contents of their requests and information relevant to the execution plus the Award to the enforcement agencies within five (5) years from the date the Award is enforceable or from the date on which the obligations as stated in such Award are required to be performed.[16]

Possibility of enforcing a foreign arbitration award in Vietnam (based on the review of the Arbitration Award)

According to Article 370 of the Civil Procedure Code, a foreign arbitration award may not be recognized and permitted for enforcement in Vietnam in one of the following circumstances:

(i) Parties to the arbitration agreement have no capacity to sign such agreement under the law applicable to each party.

(ii) The arbitration agreement is invalid under the law of the country, which has been selected by the parties for application, or the law of the country where the awards were declared if the parties had not chosen law applicable to such agreement.
(iii) The obligors being individuals, agencies or organizations were not timely and properly notified of the appointment of arbitrators and of procedures for resolution of disputes at foreign arbitration organization or could not exercise their procedural rights for other reasonable reasons.
Of note, “The obligor being not timely and properly notified of the appointment of arbitrators and of procedures for resolution of disputes at foreign arbitration organization” is the most popular reason for which the recognition and enforcement of a foreign arbitration award is refused.
(iv) The foreign arbitration award was made in respect of a dispute which was not referred to arbitration by the concerned parties, or which goes beyond the request of the parties to the arbitration agreement. Where it is possible to sever the arbitration award, that part which was referred to arbitration by the parties shall be recognized and enforced in Vietnam.
The above mentioned provision is self-explanatory. We assume that this issue will be reviewed by Vietnam court on case by case basis.
(v) The formation of the foreign arbitration tribunal or the procedures for dispute resolution by foreign arbitrations do not comply with the arbitration agreement or with the law of the country where the Arbitration Award is pronounced if the arbitration agreement does not prescribe such matters.
(vi) The arbitration award has not yet been legally binding on the parties.
(vii) The arbitration award has been cancelled or suspended from enforcement by competent bodies of the countries where the awards were pronounced or the countries whose laws have been applied.
(viii) If the Courts of Vietnam are of opinion that:

The disputes can not be resolved by arbitration under Vietnamese law.

We are pleased to advise that according to the Law on Commerce, disputes on sales contracts can be resolved by arbitration;[17] and

The recognition and enforcement in Vietnam of the awards are in contradiction with the basic principles of Vietnamese law.

Of note, there is no clear reference in the Laws of Vietnam or any judicial precedents defining clearly what constitutes “the basic principles of the Laws of Vietnam” and this issue has never been tested before the court of Vietnam.

If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.

This article is for general information only and is not a substitute for legal advice.

[1] Article 342.1, the Civil Procedure Code

[2] Article 366.1, the Civil Procedure Code

[3] Article 343.2 & 343.3, the Civil Procedure Code

[4] Article 344.1, the Civil Procedure Code

[5] Article 346.2, the Civil Procedure Code

[6] Article 364, the Civil Procedure Code

[7] Article 365.1, the Civil Procedure Code

[8] Article 365.1, the Civil Procedure Code

[9] Article 366.1, the Civil Procedure Code

[10] Article 367, the Civil Procedure Code

[11] Article 368.1, the Civil Procedure Code

[12] Article 368.2, the Civil Procedure Code