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”

There are three places indicated in the above provision:

(1)        the dispute resolution place (địa điểm giải quyết tranh chấp);

(2)        the place where the award is made (nơi phán quyết được tuyên); and

(3)        the location where arbitral tribunal conduct the hearing.

It is not clear which of the three places above will be considered as the seat of arbitration under Vietnamese law. It would be more reasonable to consider the place where the award is made to be the seat of arbitration. This is because:

·       the words “where the award is made” is the same as the term used in the New York Convention 1958 on recognition of foreign arbitral awards;

·       the proposal of the drafting team of the Law on Commercial Arbitration 2010 explains that dispute resolution place is the venue of arbitration; and

·       the Vietnamese Civil Procedures Code 2015 also refers to the country where the award is made when contemplate the grounds for rejection of a foreign arbitral award seeking recognition. For example, under Vietnamese Civil Procedures Code 2015, Vietnamese courts may reject a foreign arbitral award if the arbitration proceeds relating to such award is not in accordance with the law of the country where the award is made. In this context, the country where the award is made must be the country of the seat of arbitration.

Despite the above arguments, the Supreme Court’s guidance of Law on Commercial Arbitration 2010 suggests that the dispute resolution place is a legal concept not a physical concept. This seems to indicate the dispute resolution place could also be a seat of arbitration.

This post is written by Nguyen Quang Vu.