In which case the foreign arbitral award shall not be recognized and enforced in Vietnam?

In the era of economic integration, commercial disputes are starting to be resolved by foreign arbitration more, even for Vietnam-located dispute subject. The companies should be aware that after a foreign arbitration award is established, such arbitral award will not automatically be enforced in Vietnam. The Vietnamese courts will reevaluate the conditions of recognition for a foreign arbitral award. This article will introduce the cases in which foreign arbitral awards are not recognized and enforced in Vietnam. 

1. The cases in which the foreign arbitral award violates the contextual or formation regulations (Clause 1 Article 429 Code on Civil Procedures 2015)

• The parties of the arbitration agreement do not have capacity to establish such agreement according to law applicable to each party;

• The arbitration agreement is not legally effective according to the law of the country which is chosen to be applied or according to the law of where the award is made in case the parties cannot choose a law to be applied to such agreement; 

• The judgment debtors being agencies, organizations and individuals are not promptly and conformably notified of the appointment of arbitrator officer and of procedures for processing the disputes at foreign arbitrator, or due to other plausible reasons, such agencies, organizations and individuals cannot exercise their procedure rights;

• The foreign arbitral award is not requested to be settled by any parties or exceeds the request of parties of the arbitration agreement. If it is able to separate the parts of the decision on the matter which are requested and not requested to be settled at foreign arbitrator, the decision on the matter requested to be settled may be recognized and enforced in Vietnam;

• Compositions of foreign arbitrator and/or procedures for settlement of disputes conducted by foreign arbitrator is not suitable to the arbitration agreement or to the law of the country where the foreign arbitral award has been made, in case the arbitration agreement does not provide for such matters; 

• The foreign arbitral award has not taken compulsory legal effect on the parties; 

• The enforcement of the foreign arbitral award has been canceled or terminated by a competent agency of the country where such award is made or the home country of the law that is applied.

2. The cases in which the petition for recognition and enforcement of foreign arbitral award in Vietnam is terminated by the court (Clause 3 Article 457 and Clause 3 Article 458 Code on Civil Procedures 2015) 

• The judgment creditor withdraws his/her petition or the judgment debtor has voluntarily enforce the foreign arbitral award;

• The judgment debtor being individual has died but his/her rights and obligations have not been inherited; 

• The judgment debtor being agency/organization has been dissolved or bankrupted but its rights and obligations have been settled according to Vietnam law;

• The judgment debtor being agency/organization has been dissolved or bankrupted but its procedure rights and obligations have not been inherited; 

• The court cannot determine the places where exist properties in Vietnam of the judgment debtor according to the request of the judgment creditor of the arbitral award;

• The judgment creditors or their lawful representatives have been duly summoned twice but are still absent in the meeting for considering the request of recognition and enforcement.   

3. Others 

1. Pursuant to Vietnamese regulations, the disputes cannot be resolved by arbitration: 

• The dispute is not under the arbitration’s jurisdiction (point a Clause 2 Article 459 Code on Civil Procedures 2015, Article 2 Code on Commercial Arbitration 2010): if the arbitral award adjudicates on matters different from the ones enlisted below, such arbitral award will not be recognized in Vietnam:

• • Disputes among parties which arise from commercial activities;

• • Disputes among parties at least one of whom conducts commercial activities;

• • Other disputes among parties which are stipulated by Vietnamese law to be settled by arbitration.

• The dispute is under exclusive jurisdiction of Vietnamese courts therefore cannot be resolved by arbitration (Clause 1 Article 470 Code on Civil Procedures 2015): 

• • The dispute involving rights to real estate in the Vietnam territory; 

• • The parties have explicitly agreed to resolve the disputes in Vietnamese court (in the condition the dispute is allowed to be resolved by Vietnamese court according to Vietnamese law or international treaties to which Vietnam is a signatory). 

2. The recognition and enforcement in Vietnam of the foreign arbitral award are contrary to basic principles of Vietnam regulations (point b Clause 2 Article 459 Code on Civil Procedures 2015). 

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