Certain Grounds For Cancellation Or Rejection of Arbitration Awards By Vietnamese Courts In Practice

In our experience, Vietnamese court has relied on one or more of the following grounds to cancel domestic arbitration awards or reject application for recognition of foreign arbitral awards:

·       Changes to the venue of hearing to a different location than the place of arbitration. In a VIAC proceeding, the Claimant initiated two claims against two arbitrators for a breach of conduct. As a result, to protect the safety of the two arbitrators, the Tribunal decided to change the venue of hearing from Hanoi to Singapore and then Japan. However, Vietnamese court decided to set aside the awards on the ground that the arbitration does not take place in Hanoi as required by the arbitration agreement;

·       Applying IBA Rules on the Taking of Evidence in International Arbitration in a VIAC proceeding without express agreement by the parties; 

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Written by Nguyen Quang Vu On In

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