VIETNAM Trends and Developments Contributed by: Stephen Le Hoang Chuong, Le & Tran
Conflict with the fundamentals of the laws of Vietnam The concept and extent of a “conflict with the laws of Vietnam” are currently a topic of debate. According to Resolution No 01/2014/NQ-HDTP, the Council of Judges explained that “violations against the fundamentals of the laws of Vietnam” denote any decisions that “infringe upon the basic principles of conduct effectively in all mat- ters regarding the construction and execution of the Laws of Vietnam”. However, such a descrip- tion is certainly vague and lacks sufficient detail. Moreover, this Resolution only provides instruc- tions to apply the provisions of the 2010 Law of Commercial Arbitration to annul domestic arbi- tral awards instead of explaining how to navigate the CCP 2015 to recognise and enforce foreign judgments and arbitral awards in Vietnam. This reason for non-recognition is, arguably, the most unsettling to the judgment creditor. Trends and Predictions Not all foreign arbitral awards will be accept- ed and considered by the courts in Vietnam. Whether or not arbitral awards will be taken into consideration depends on existing international treaties or diplomatic relations between Vietnam and the relevant nations. In principle, the Vietnamese court will only rec- ognise and enforce foreign arbitral awards that are: • in accordance with the provisions of interna- tional treaties signed and participated in by Vietnam; • based on a reciprocal agreement; and • compliant with the laws of Vietnam. The Vietnam Ministry of Justice published a data- base regarding the recognition and enforcement
of foreign court judgments or arbitral awards in Vietnam from 2012 to 30 September 2019, (the “Database”), which indicates that only 49% of foreign court judgments or arbitral awards would be recognised and enforced in Vietnam. This figure sheds light on the alarmingly low rate of recognition and enforcement of foreign court judgments or arbitral awards in Vietnam. The Database specifies that five out of the 26 foreign court judgments and 30 out of the 82 foreign arbitral awards were not recognised in Vietnam. There are two possible reasons behind this low rate of recognition. First, certain foreign courts or arbitration centres may be of inadequate quality or have violated dispute resolution procedural regulations. A second reason to consider is that some provisions that frame the recognition and enforcement of foreign court judgments or arbi- tral awards by the CCP 2015 and the 2010 Law on Commercial Arbitration may not be properly adhered to or contain vague language without guidelines. The recognition and enforcement of an arbitral award help to reduce the costs borne by the parties to the dispute. However, recognition and enforcement must comply with certain rules and principles, which serve to demonstrate a nation’s right to jurisdictional independence. This princi- ple precludes the unilateral imposition of another nation or international organisation’s legal judg- ments and awards. As such, it not only under- scores Vietnam’s sovereignty but also aligns the country with the current values espoused by the global legal community. Therefore, when concluding and performing an international commercial contract, it is very important to select a dispute resolution juris- diction, as this will affect the recognition and
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