VIETNAM Law and Practice Contributed by: Tung Ngo, Linh D. Nguyen and Minh Doan, VILAF
5.5 Breach of Arbitration Agreement If a party initiates court proceedings in breach of a val - id arbitration agreement, Article 6 of the LCA requires the court to decline jurisdiction, unless the arbitra - tion agreement is deemed void or unenforceable. Additionally, pursuant to Article 2.2 (c) of Resolution 01/2014, if an arbitral tribunal is already handling the dispute, the court must dismiss or suspend the case – even if it believes the dispute falls outside the scope of arbitration, lacks a valid arbitration agreement, or falls under certain exceptions. Vietnamese courts generally uphold arbitration agree - ments and are reluctant to proceed with court cases that breach a valid and enforceable arbitration clause. 5.6 Jurisdiction Over Third Parties Vietnamese arbitration law generally does not allow arbitral tribunals to assume jurisdiction over individu - als or entities that are not signatories to the arbitration agreement. Unlike court proceedings, arbitral tribu - nals derive their authority strictly from the arbitration agreement between the disputing parties. Vietnam does not currently recognise doctrines (eg, the “group of companies” doctrine) that are applied in some other jurisdictions to bind non-signatories. However, there are certain circumstances in which non-signatories may be bound by an arbitration agree - ment ‒ either through their express or implied consent ‒ allowing the arbitral tribunal to assume jurisdiction over them, as follows. • Where a natural person dies or loses mental capacity, their heirs or legal representatives are bound by the agreement unless agreed otherwise. • Where a party to an arbitration agreement termi - nates its operation or undergoes changes such as bankruptcy, dissolution or merger, the arbitration agreement remains effective for the successor organisation unless agreed otherwise. • Where a party to an arbitration agreement transfers all of its rights and obligations to a third party, the third party might also be bound by the arbitration agreement.
decide on objections relating to the existence, validity or scope of the arbitration agreement. 5.2 Circumstances for Court Intervention Vietnamese courts may address issues concerning the jurisdiction of an arbitral tribunal only upon the request of one or both disputing parties ‒ specifically, as follows. • Under Article 44 of the LCA, courts may examine the tribunal’s jurisdiction when a party disagrees with the arbitral tribunal’s decision on jurisdiction. This includes issues related to the validity and enforceability of the arbitration agreement, as well as to the tribunal’s jurisdiction. • Under Article 68 of the LCA, courts may also assess the tribunal’s jurisdiction if it is raised as a ground for setting aside an arbitral award. Vietnamese courts generally do not demonstrate a willingness to interfere in arbitral proceedings. Although there are some negative rulings on jurisdic - Pursuant to Article 44.1 of the LCA, parties have the right to challenge the jurisdiction of the arbitral tribunal in court within five days after the tribunal renders its decision on the matter. Pursuant to Article 69 of the LCA, within 30 days from the date of the rendering of the arbitral award, a party may request the court to set aside the award on the ground that the arbitral tribunal lacked jurisdiction over the dispute. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility Although the standard of judicial review for questions of admissibility and jurisdiction is not expressly char - acterised as either deferential or de novo under Viet - namese law, courts in Vietnam generally adopt a de novo approach. This means that courts independently assess issues such as the validity of the arbitration agreement, the tribunal’s jurisdiction, and the agree - ment’s conformity with the domestic legal system dur - ing separate proceedings. tion, they are not common. 5.3 Timing of Challenge
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