VIETNAM Law and Practice Contributed by: Vinh Luu, Phong Tran, The Nghiem and Thu Nguyen, Asia Legal
11. Review of an Award 11.1 Grounds for Appeal
on the merits. The award then takes effect from the date of its issuance. 10.2 Types of Remedies A tribunal may award the remedies generally available under Vietnamese substantive law, including compen - satory damages, specific performance of obligations, the consequences that follow from termination of a contract and interest for late payment. Contractual penalties for breach of a commercial contract are, subject to limited exceptions, capped at eight (8) per cent of the value of the breached obli - gation under Article 301 of the Commercial Law 2005. Punitive damages and liquidated damages are not generally recognised under Vietnamese law and a tribunal awarding them would risk the award’s later enforcement being resisted as contrary to “fundamen - tal principles of Vietnamese law” if enforcement were sought in Vietnam. Although an arbitral tribunal may order interim meas - ures under the LCA, Vietnamese law does not rec - ognise the broad equitable remedies as final relief. Accordingly, remedies such as injunctions are avail - able only to the extent expressly provided for under the LCA or the applicable substantive law. 10.3 Recovering Interest and Legal Costs Interest is generally recoverable either at the rate the parties themselves agreed or, absent agreement, at the statutory rate for late payment under Article 306 of the Commercial Law 2005, with courts and tribunals increasingly guided in practice by judicial interpreta - tions developed for late payment interest in ordinary litigation when settling on an appropriate rate. Article 34 of the LCA allows the parties to agree how arbitration fees and costs will be allocated. Absent such agreement, tribunals generally apply a cost-fol - low-the-event approach broadly familiar from inter - national practice, awarding the successful party its arbitration fees and reasonable legal costs. However, apportionment reflecting the degree to which each party succeeded is also common where neither side prevails entirely.
Vietnam does not permit appeals on the merits of an arbitral award, consistent with the finality princi - ple underpinning most modern arbitration regimes. An award is final and binding once rendered under Article 61.5 of the LCA. The only available recourse is an application to set the award aside before the competent court within thirty days of receipt, under Article 69 and only on the limited procedural grounds enumerated in Article 68.2 of the LCA. These grounds include the absence of a valid arbitration agreement, an improperly constituted tribunal or a procedure that did not follow the parties’ agreement or the law, an award dealing with matters outside the scope of the arbitration agreement, evidence that the award was procured through fraud and the broader ground that the award is contrary to the fundamental principles of Vietnamese law, discussed further in 11.3 Standard of Judicial Review . As explained in 2.2 Changes to National Law , jurisdic - tion to hear such an application is now concentrated in only three specialised Provincial People’s Courts, in Hanoi, Da Nang and Ho Chi Minh City and the appli - cation is heard by a panel of three judges who review only the enumerated grounds without re-examining the underlying merits of the dispute. Publicly available data suggest the great majority of set-aside applica - tions are ultimately rejected, a trend arbitration practi - tioners in Vietnam regard as a further sign of the judici - ary’s increasingly pro-arbitration orientation. 11.2 Excluding/Expanding the Scope of Appeal Parties cannot, by agreement, exclude or expand the statutory grounds for setting aside beyond those listed in Article 68 of the LCA, which are treated as mandatory protections for the integrity of the arbi - tral process rather than rights the parties are free to waive or extend in advance, a position shared with most UNCITRAL Model Law jurisdictions that do not permit contractual exclusion of court supervision. A narrow and genuinely novel exception now exists, however, for the newly established International Arbi - tration Center under the International Financial Centre discussed in 2.2 Changes to National Law , Article
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