Supreme Court’s Precedent 55/2022 recognising validity of an unnotarised contract for transfer of land use right

In October 2022, the Supreme Court issued Precedent 55/2022 which recognises the validity of an unnotarised contract for transfer of land use right on the basis that two thirds of the contract have been performed and accordingly the contract becomes valid in accordance with Article 129 of the Civil Code 2015. The background of the case is as follows:

· In 2009, the parties signed a contract for transfer of land use right over a piece of land which would be allocated by the Government to the seller in accordance with a land compensation scheme. The contract was not notarised.

· In 2016, the Seller received the land use right certificate for the transferred land. The Buyer also paid around 90% of the sale price. The Buyer also leased the land to a third party.

· However, the Seller later on refused to register the transfer with the authority and claimed that the transfer contract was invalid since it has not been notarised.

In the Precedent 55/2022, the Supreme Court accepts the judgement of the lower court which recognises the validity of the transfer contract on the ground that the parties have performed two-thirds of the contract. Under Article 129.2 of the Civil Code 2015, where the civil transaction established in writing is in breach of compulsory provisions on notarization or certification, and one or more parties have performed at least two-thirds of the obligations in the transaction, the court will, at the request of one or more parties, recognize the validity of such transaction.

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Written by Nguyen Quang Vu On In ,

Can a non-contractual claim be settled by commercial arbitration in Vietnam?

Vietnamese law is not clear that a non-contractual claim (i.e., a claim which is not based on a breach of contract) could be settled by commercial arbitration. However, Vietnamese courts seem to take the view that non-contractual claims cannot be settled by commercial arbitrations. The answer to this issue is also important to the enforcement and recognition of a foreign arbitral award which deals with non-contractual claims. This is because Vietnamese courts can refuse to recognise a foreign arbitral award if the dispute cannot be settled by arbitration under Vietnamese law.

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Written by Nguyen Quang Vu On In ,

Sending of notices under VIAC’s rules

A party to an arbitral proceedings under VIAC’s rules must send its notice and other submission to VIAC which will then forward the notice and submission to the other parties to the proceeding. This is different from SIAC’s rules which allow each party to send notice and submission directly to each other with a copy to SIAC. This arrangement is not effective and could give rise to potential challenges if VIAC does not handle the sending of notices and documents correctly.

Rule 3.2 provides that VIAC will send notices and documents to the parties at the addresses provided by the parties. If a party provides VIAC with more than one address (e.g., office addresses and email addresses, or addresses of the respondent and their counsels), then it is not clear if VIAC should send notice and documents to all the addresses provided to it or VIAC only needs to send notice and documents to only one of the addresses provided to it. The wording of Rule 3.2 seems to suggest that VIAC should send notices and documents to all addresses provided to it by the parties.

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Written by Nguyen Quang Vu On In

“Seat of arbitration” and “venue of arbitration” – What do they mean under Vietnamese law?

In international arbitration, determining the “seat of arbitration” is important since the law of the country where the seat of arbitration is located will usually govern the arbitration proceedings. In addition, international arbitration rules distinguish the seat of arbitration from the venue of arbitration which is the physical place where hearings take place. In Vietnam, the Law on Commercial Arbitration 2010 does not have a clear definition of “seat of arbitration” and “venue of arbitration”.

Article 3.8 of the Law on Commercial Arbitration 2010 provides that:

“Dispute resolution place means the place where the arbitration tribunal conducts the dispute resolution as agreed by the parties, or as decided by the arbitration tribunal if the parties do not have such an agreement. If the dispute resolution place is within the territory of Vietnam then the award is deemed to be made in Vietnam regardless of the location where the arbitral tribunal conducts the hearing to issue the award”

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Written by Nguyen Quang Vu On In