100 questions and answers
What is arbitration?
Arbitration is a consensual dispute resolution process where the parties agree to submit their disputes to be resolved by an arbitral tribunal, whose award will be final and binding.
How is arbitration different from mediation?
A mediator's role is to attempt to bring the parties to a mutually accepted settlement but it is no mandatory to get one or to accept the terms of the settlement proposed.
How is arbitration different from expert determination?
Expert determination is commonly used to resolve disputes on a narrow technical issue (such as the value of a company or an asset). As in arbitration, the expert's finding is usually binding on the parties. An arbitrator's brief is broader: it is to resolve commercial disputes in accordance with law and commercial practice.
How is arbitration different from litigation?
Arbitration proceedings are conducted in private, rather than in court, and are heard by an arbitrator rather than a judge. Arbitration procedures are generally less formal, and there are no restrictions on who may represent parties in an arbitration.
What are the main advantages of arbitration?
Parties from different countries can choose to appoint a panel of neutral arbitrators, who may be experts in the relevant area, and to hold the arbitration in a neutral venue. Arbitration is conducted in private and is generally confidential.
Arbitration procedure is flexible, which can lead to disputes being resolved more quickly and cheaply than in the courts.
Arbitration awards can be enforced internationally more easily than court judgments mainly because more than 150 countries signed the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, also known as the New York Convention of 1958.
What are the potential disadvantages of arbitration?
As arbitration is based on the consent of the parties, arbitrators generally have no power to make orders affecting non-parties to the arbitration agreement. In contrast to courts, they generally do not have power to compel witnesses to testify or produce documents, to require third parties to participate in arbitration proceedings, or to make awards requiring a third party to do (or to refrain from doing) something.
However, when the arbitration take place in Vietnam and since the Arbitration law of 2010, the arbitrators, with the help of the Vietnamese judge, can order some conservatory measure or compel a witness to testify
What is "institutional" arbitration?
Institutional arbitration proceedings are administered by an arbitration institution such the International Chamber of Commerce (“ICC”) or, in our case, the Pacific International Arbitration Centre (“PIAC”).
Usually, these are conducted under the arbitration rules established by each institution and the parties can define the rules they want to follow.
What is "ad hoc" arbitration?
Ad hoc arbitrations are arranged solely between the arbitrators and the parties. They may adopt a set of arbitration rules (such as the UNCITRAL Rules of Arbitration) or, less frequently, may use rules drawn up by the parties.
What are the advantages of institutional arbitration?
Institutional arbitration has the benefit of ensuring that the proceedings are administered in an orderly manner conducted under clear rules established by it.
Arbitration institution may also keep an eye on the fairness of the arbitrators and their awards. Adopting an established set of arbitration rules has the obvious benefit of keeping arbitrators using well-known procedures and rules.
What are the advantages of ad hoc arbitration?
In principle, Ad hoc arbitration may be cheaper insofar as no administration fees are payable to an arbitration institution. According to the parties’ willingness, it may also provide flexibility to devise rules and procedures appropriate to their disputes.
In practice, however, devising and agreeing to a set of ad hoc procedures will require substantial specialist input and detailed negotiation between the parties which can greatly increase the ad hoc arbitration’s cost.
Is arbitration cheaper than litigation?
The cost of arbitrating can depend greatly on the fees charged by the arbitration institution used (if any), number of appointed arbitrators, and the fees charged by the arbitrators.
Arbitration can be conducted more cheaply because of its flexibility and informality than court proceedings. If the parties adopt a strongly adversarial approach, however, arbitration proceedings can be at least as expensive as litigation.
Is arbitration quicker than litigation?
Again, because of its procedural flexibility, it is generally possible to conduct arbitration proceedings more quickly than litigation. Restrictions on the parties’ rights to appeal arbitration awards can shorten a dispute by months or years.
Unlike courts, however, arbitrators generally do not have power to issue default or summary judgment in simple cases where there is no real issue to be determined, and are generally required to hold a hearing of the claim.
Do arbitrators' decisions create binding legal precedent?
As arbitration proceedings are private and confidential, the parties are generally prohibited from disclosing the outcome of an arbitration, except in limited circumstances.
As a result, each case is unique and the arbitral award can’t be use against other parties in future.
Are arbitral awards subject to appeal?
Arbitral awards are usually final and not subject to be appeal, however the parties don’t agree on the above arbitral awards.
Why arbitrate in Ho Chi Minh City?
Ho Chi Minh City is conveniently located in South Asia, have a great port activities and commercial exchanges continuously increasing with the rest of the world. Moreover, Ho Chi Minh City is easily accessible from major commercial centres in East Asia.
It has a strong, arbitration-friendly legal system, and a large pool of arbitrators, lawyers and other professionals. Under the New York convention of 1958 signed by Vietnam in 1995, arbitral awards made are readily enforceable all over the world.
What is the role of the Pacific International Arbitration Centre (“PIAC”)?
The PIACwas established in 2006 to meet the demands of the business community for a neutral, efficient and reliable dispute resolution institution in Vietnam.
It provides facilities and support services for arbitrations conducted in Ho Chi Minh City and works towards promotion of alternative dispute resolution (ADR) as a mean of dispute resolution and strives to bring together the professionals such as judges, lawyers, arbitrators, mediators, professors and scholars for professional and practical settlement of commercial disputes.
The PIAC offers ADR services including arbitration and mediation. We are committed to impartiality and transparency in all process of arbitration and mediation.
Does the PIAC have its own arbitration rules?
The PIAC has formulated a set of rules, which the parties are free to adopt. These rules cover all the procedure.
Does the PIAC administer arbitration proceedings?
The PIAC administers arbitration proceedings when requested to do so by the parties. In this role, it ensures the communication between the parties and the arbitrators and provides other administrative support as appropriate.
Must arbitrations conducted in Vietnam be administered by the PIAC?
No. The parties may choose to have their arbitration administered by any other arbitration institution, or they may choose not to have their dispute administrated by an arbitration institution.
Must arbitrations be held at the PIAC?
No. Hearings may be held at any place convenient to the parties and the arbitrators.
Must arbitrations be conducted under the PIAC's arbitration rules?
Although the parties can adopt any arbitration rules, we strongly recommend to adopt the UNCITRAL arbitration rules.
Must the parties retain Vietnamese legal counsel under the PIAC’s arbitration?
No. The parties are free to appoint locally qualified legal counsel, foreign legal advisors, non-legal representatives to represent them in the arbitration.
Where can I find more information about the PIAC?
Our website contains information about PIAC’s role, administrative services, the arbitration rules, model arbitration clauses, and the PIAC's panel of arbitrators.
24. What rules govern arbitration proceedings in Vietnam?
The 2010 Commercial Arbitration Law has clarified the procedure of arbitration in Vietnam and extended the scope of application of arbitration by broadening its definition of “commercial disputes”. The New York Convention of 1958 has been signed by Vietnam and is thus also applicable in Vietnam ; it enables for awards rendered in another country party to the convention to be enforced in Vietnam.
25. What arbitration rules will be applied if the parties have agreed to none?
The arbitrators will apply the PIAC arbitration rules if the parties have not agreed on any rules regarding the arbitration.
26. Is there a difference in how international and domestic arbitrations are treated?
There is a difference in Vietnam between domestic and international arbitrations, in terms of applicable law. Indeed, the arbitral tribunal will have to apply the law of Vietnam if there is no foreign element regarding the dispute.
In case of a dispute with one or foreign elements, the parties can choose the law applicable and, if no such choice is made, the Arbitral Tribunal can apply the law most appropriate to the dispute.
However, the Vietnamese law does not make distinction between domestic and international arbitrations regarding the form of the arbitration agreement.
27. What is the UNCITRAL Model Law?
The Model Law was promulgated by the United Nations Commission on International Trade Law (UNCITRAL) in 1985. It provides States with a template for an effective and comprehensive arbitration regime with limited scope for local courts to intervene in the arbitral process.
This Model Law has been widely adopted throughout the world and is used by many jurisdictions. PIAC acts as an appointing authority under the UNCITRAL Arbitration rules.
28. What are the UNCITRAL Arbitration rules?
The UNCITRAL Arbitration rules were adopted by UNCITRAL in 1976, to provide a set of procedural rules appropriate for use in international commercial arbitrations generally.
The UNCITRAL Arbitration Rules are recommended by the PIAC for use in international arbitrations in Vietnam.
29. Is it necessary to have an arbitration agreement?
Arbitration being a consensual process, an agreement is indeed necessary. The most important step in initiating arbitration is the agreement to arbitrate. Both parties will have to agree to submit the dispute to arbitration. As a first step, the parties should check their agreement to find out if there is an arbitration clause. Even if there is none, parties can still agree to submit the dispute to arbitration. This post-dispute agreement should be in writing. But the parties may also agree beforehand to arbitrate, most commonly by an arbitration clause in the contract.
30. What effect does an arbitration agreement have?
Such an agreement provides the basis for an arbitrator’s jurisdiction. In the absence of such an agreement, an arbitrator will simply not entertain a request for arbitration. The parties may modify or supplement the applicable arbitration rules by express provisions in the arbitration agreement.
31. Can arbitration cover claims in tort, as well as contract?
An arbitration agreement, if worded broadly enough, can cover claims stemming from a contract as well as the ones stemming from tort, i.e. in connection with misrepresentation for instance. Related torts and contract claims will usually be analysed and determined together by the Arbitral Tribunal.
32. What happens if a party attempts to litigate a dispute which is covered by an arbitration agreement?
In Vietnam, the main idea is that the judge will not be competent regarding a matter when there is an arbitration agreement. He will therefore decline its own competence. Only in cases where it is manifest that the arbitration agreement is invalid will the judge not decline its competence.
Otherwise, the arbitrator or the Arbitral Tribunal will solely be competent to resolve any issues arising, regarding the validity of the agreement, of the composition of the Arbitral Tribunal or even its own competence.
33. What are the requirements of a valid arbitration agreement?
The arbitration agreement is of a primary importance, as the arbitration process is a consensual one and it is the agreement by the parties to submit to arbitration disputes, which have arisen or may arise between them. It must be written or evidenced in writing.
If the signature of the parties is not mandatory, it is however the conventional manner by which the parties give their consent and thus can only strengthen the agreement.
34. What matters should be dealt with in an arbitration agreement?
An arbitration agreement is best applicable if it bears the following points: the place of the arbitration, the applicable arbitration rules and the applicable law to the dispute at hands, the number of arbitrators that will be appointed and how they so will be, and finally the language in which the proceedings will be conducted.
35. Is a prescribed form of arbitration agreement necessary to enter into arbitration?
The PIAC does not require the use of a specific form of arbitration agreement to enter into arbitration. However, the PIAC does recommend the use of some clauses useful In various situations, and explained in the booklet attached.
These clauses have been thought out and redacted to confer an effective jurisdiction to the Arbitral Tribunal and avoid potential issues that may arise from the use of an arbitration agreement.
36. How many arbitrators should an arbitration agreement provide for?
When it comes to appointing arbitrators, several aspects must be taken into account: time of the hearings and of the procedures, cost of the arbitration process, complexity and technicality of the legal issue, nationality of the parties etc.
For those reasons, a consultation with our PIAC staff will help determine the most adapted and flexible solution.
37. What language should be chosen to conduct the arbitration proceedings to?
In theory, the parties are completely free to choose the language in which the arbitration will be conducted. In practice, the parties should consider the languages they speak, the language in which the contract, agreement or future evidence have been redacted.
The impact on the choice of the arbitrators that the chosen language will have is worth considering.
38. What happens if two different languages are chosen and used for the arbitration?
Often, the parties to a contract agree to conduct their arbitration in two languages. This can render the later process heavy as every document will have to be presented in the two chosen languages, and oral submissions as well as evidence should also be conducted or presented in the two languages.
The cost factor of the forthcoming translations must thus be taken into consideration.
39. What happens if a contract containing an arbitration clause is found to be invalid?
If the contract containing the arbitration clause is found invalid, this does not invalidate the clause contained therein or the proceedings commenced under this clause. Vietnamese law indeed has established the principle of the independence of the arbitration clause from the contract and other agreements.
The clause is thus considered to be a separate agreement.
40. What is the importance of the determined place of arbitration?
The place or seat of the arbitration has to be determined for two important reasons. First of all it determines which jurisdiction’s arbitration laws apply to the proceedings and which courts may exercise supportive and supervisory powers over the arbitration.
Secondly, it determines the place in which the arbitration award was rendered, hence the conditions and possibilities to enforce it.
41. Can some hearings be held outside the place of arbitration?
The fact that some hearings are held outside the place of arbitration, e.g. outside of Vietnam, does not impact on Vietnam’s status as the place of the arbitration.
42. If a contract provides for arbitration in Vietnam, must it also be governed by Vietnamese law?
The governing laws for international arbitrations need not follow the place of arbitration. However, as for domestic arbitration, i.e. where there are no foreign elements, Vietnamese law remains applicable.
43. Will the Arbitral Tribunal apply Vietnam law or the governing law of the contract?
The Arbitral Tribunal will apply the governing law of the contract to determine the substantive issues in a contract claim, that governing law being the one chosen by the parties or the one that will be determined applicable to the contract.
Parties can choose the law applicable. If a foreign law is applicable, the parties will likely be required to call expert evidence to establish the applicable principles of the foreign law when the tribunal has no expertise of that.
44. What if the contract does not state the governing law?
If the contract is silent as to its governing law, the Arbitral Tribunal will determine the law it considers the most appropriate. This will usually be treated as a preliminary issue. This will be the law of the jurisdiction with which the contract has the closest connection.
If the contract provides for arbitration in Vietnam, this will undoubtedly be a favourable factor for the application of Vietnamese law as the one governing the contract, in case the parties remained silent in that regard.
45. How is the governing law determined for tort claims?
The Arbitral Tribunal will determine the governing law of a tort claim by applying the domestic Vietnamese legislation. This may lead to the application of a law different from the one applicable to the contract.
46. How is arbitration commenced at PIAC?
Arbitration is considered to commence when the claimant serves the respondent with a notice requesting (or requiring) that the dispute be referred to arbitration. The formal requirements of such a notice can easily be found in the PIAC set of rules of arbitration, as well as the requirements under the applicable procedural rules.
47. Where is the list of Recommended International Arbitrators of PIAC?
The Parties go into the PIAC’s website: www.piac.vn, they will find the PIAC’s list of Recommended International Arbitrators.
48. What is the time limit for commencing arbitration?
The limitation period may be varied by agreement between the parties. Other than that, the 2010 Commercial Arbitration Law provides an exact time frame for parties to commence the arbitration, designate arbitrators and so on.
49. What a party wishing to commence an arbitration at the Centre should do?
The Party has to submit what is called a “request for arbitration” to the Centre.
This request must contain several information: the date on which the request is made, the names and addresses of both parties, a summary of the content of the dispute, the ground for the claim, the monetary value of the dispute and other claims, the name or the arbitrator (or a request to the Centre to appoint one), and the signature of the claimant (if the claimant is an organization, the signature of the legal or authorized representative). This request must be accompanied by the arbitration agreement and all the documents which are relevant to the situation.
Then, the Centre will send a notice to the defendant, as well as the request for arbitration, the arbitration agreement and the others relevant documents provided by the claimant.
50. How must the respondent react?
Unless parties decided otherwise in their agreement, the respondent must submit to the Centre a Statement of Defence. He has 30 days after the reception of the notice and the other documents to do so (he can ask for an extension.
The Statement of Defence must contain its date, the name and address of the respondent, the grounds for the defence, the name of the person he chooses as an arbitrator (or a request to the Centre to appoint one), the signature of the respondent (if the respondent is an organization, the signature of the legal or authorized representative).
If the respondent thinks that the arbitration agreement is invalid or doesn’t exist, he must say it in its Statement.
51. Apart from its defence, can he make some claims?
Yes. The respondent can also file a counterclaim against the claimant. The counterclaim must contain the same elements than the request for arbitration and must be based on the same arbitration agreement.
The respondent has to submit it in the same time that his statement of defence. The counterclaim will be concurrently resolved by the same Arbitral Tribunal that resolves the Request for Arbitration of the claimant.
52. What happens if a respondent fail to serve a defence?
Even if the respondent doesn’t submit the Statement of Defense, the arbitral proceedings will proceed.
53. How is the number of arbitrators determined?
The dispute can be resolved by an Arbitral Tribunal composed by one or three arbitrators. It depends on the will of the parties and on what is decided in the arbitration agreement/clause.
54. What happens if the parties do not agree on the number of arbitrators?
If the parties fail to reach an agreement on the subject, the arbitration council will be composed of three arbitrators.
55. In which way are the arbitrators appointed?
If it is an Arbitral tribunal comprising three arbitrators, the first one is chosen by the claimant (who can also request the Centre to appoint one), the second one is chosen by the respondent (who can also request the Centre to appoint one).
If they fail to do so, those will be chosen by the Centre’s President. Finally, unless otherwise agreed by the parties, the two arbitrators have to select the third one who will act as the Presiding Arbitrator of the Arbitral Tribunal.
It is an Arbitral Tribunal comprising a Sole Arbitrator, parties must agree on who this arbitrator will be, or request the center to appoint one. If they fail to do so, the Centre’s President will decide.
56. Who can be appointed as an arbitrator?
Firstly, the law provides for different criteria for arbitrators to be appointed (full civil act capacity, possession of university degree, work experience in the trained discipline for at least 5 years except special cases). It also gives some exclusions (e.g. incumbent judges, procurators etc.).
Then, parties can agree on the necessary qualifications that need to have the arbitrator. The Arbitration Centre provides for a List of arbitrators.
57. Can the parties choose an arbitrator who is not on the List of arbitrators?
Yes, but they have to inform the Centre of the address of such an arbitrator.
58. Are the arbitrators required to be independent of the parties? Impartial?
Yes, arbitrators must be independent of the parties, they also need to be impartial and objective and must respect law.
Once an arbitrator is appointed, he has the obligation to notify in writing the arbitration centre or arbitration council and parties of the circumstances which affect his objectivity or impartiality.
59. Can a party request the change of an arbitrator to settle the dispute?
Yes, if the arbitrator is a relative or representative of one party, if he has an interest related to the dispute, if it is clear that he is neither impartial nor objective, if he was a mediator, representative or lawyer for one of the party in the dispute (except if agreement of the parties), or if he doesn’t meet the specific qualifications agreed by the parties.
60. What are the general duties of an arbitrator?
Arbitrators must (a) be independent in dispute settlement, (b) ensure impartial, fast and prompt settlement of disputes, (c) adhere to the rules of professional ethics and (d) keep secret the circumstances of disputes they settle, unless they have to provide information to competent state agencies under law.
61. When and who will have to pay the costs of arbitration?
It is possible that parties settled a solution in their arbitration agreement. When they didn’t, the claimant has to pay the expenses for remuneration of arbitrators and the Centre’s administrative expenses relative to his request. If he doesn’t pay in the right period of time, he will be deemed to have withdrawn the request.
The respondent, in case of counterclaim will have to pay the same expenses aforementioned relative to his counterclaim and if he doesn’t in the right period of time he will also be deemed to have withdrawn its request.
As for the expenses for travelling, accommodation and other relevant expenses of the arbitrators, and the expenses for inspection and valuation of assets, those for expert advices and other assistance requested, they must be estimated and, if there is no agreement of the parties, it must be paid in advance, in full by the requested party. Then, just before the Arbitral Award, the actual expenses will be calculated, in order for the parties to get back their money if they paid to much, or for the Centre to be paid the additional amount.
Regarding the costs of arbitration, if parties didn’t agree on a solution, the Tribunal have to allocate the costs. It will be able the decide that one party have to pay all or part of the legal costs or other reasonable expense incurred by the other party.
62. What happens after the Tribunal has been appointed?
Usually, the Tribunal will organize a first meeting with the parties in order to make directions and to establish a timetable for the conduct of the arbitration, mainly by deciding the time and location for the hearings. It will also consider any preliminary matter.
63. What happens if the council’s jurisdiction is challenged?
Before considering the circumstances, the arbitral tribunal always have to consider its jurisdiction, mainly by verifying the validity of the arbitration agreement.
Challenged or not, it will always rule on its jurisdiction.
64. Can the Tribunal ’s ruling on jurisdiction be appealed?
If, after the recognition of its jurisdiction by the council, a party wants to challenge the result, it has to file a request with a competent court within five working days after receiving the decision.
A judge will then consider and settle the complaint and its decision will be final.
65. What can the Arbitral Tribunal do to verify the facts?
The Tribunal must be able to meet or discuss with one party with the participation of the other party in order to clarify the issues relevant to the dispute.
It also can conduct fact-finding from a third person (but only in the presence of the parties or after having notified them).
66. What can the Arbitral Tribunal do to collect evidence?
The Tribunal can (a) request the parties to provide evidence, (b) request witnesses to provide information and document relevant to the dispute, (c) seek inspection or valuation of the assets in dispute, (d) seek expert advice and to request the parties to provide experts with the relevant information or access to the relevant documents, goods or assets.
67. Can the Arbitral Tribunal summon witnesses to attend the hearing?
Yes. It also can adjourn a hearing if witnesses fail to attend it.
68. Can the Arbitral Tribunal order interim measures?
Yes, the Tribunal can order interim measures applicable to the parties in the dispute. For example, it can prohibit changes in the status quo of the assets in the dispute, or seize them etc.
But in practice, it is really rare that the Tribunal itself order such measures.
69. What power can a court exercise in support of an arbitration?
A court, if asked, can, help the Tribunal to collect evidence when the latter and the parties have applied any necessary measures to collect them but are not able to do so themselves.
A court can also issue a decision in order to summon a witness to attend the hearing. It also can order interim measures to help the Arbitration Tribunal, which happen frequently in practice.
70. Are PIAC allowed to verify facts?
The PIAC have the power to meet or discuss with one party by appropriate means in order to clarify the issues relevant to the dispute. The PIAC, on its own initiative or at the request of a party or the parties, conduct fact-finding from a third person in the presence of the parties or after having notified the parties.
71. What happens if PIAC cannot collect evidence?
If PIAC, or a party or the parties have already taken necessary measures to collect evidence without success, a written request may be submitted to the competent court to require support in accordance with the law.
72. Are expert witnesses used in arbitration?
PIAC shall have the power, on its own initiative or at the request of a party or the parties, to seek expert advice. The expert shall submit a written report to the PIAC, which will send to the parties and request the parties to provide their written opinions.
The expenses for expert advice shall be paid if the requesting party or allocated by the PIAC.
73. What kind of interim measures PIAC can be made?
At the request of a party several interim measures may be order by the PIAC. The interim measures included: prohibition of any change in the status quo of the assets in dispute; prohibition of any specific action by any party in dispute or order that any party in dispute take specific actions aimed at preventing conduct adverse to the arbitral proceedings, seizure of the assets in dispute; order of provisional payment of money between the parties; prohibition of transfer of asset rights with respect to the assets in dispute. The procedures for ordering, changing, supplementing or terminating the interim measures shall be in accordance with the relevant provisions of the law.
74. How is the hearing conducted?
Hearings shall be conducted in camera unless the parties have agreed otherwise. Parties have the right to invite witnesses and persons who protect their legal rights and interests to attend hearings.
PIAC may permit other person to attend hearings if the parties so consent.
75. Can an arbitrator in a dispute act as mediator?
At the request of the parties, an arbitrator can conduct mediation. If the mediation is successful, a minutes of successful mediation shall be drafted, signed by the parties and the PIAC. In such case, PIAC shall make the decision recognizing the successful mediation.
The Decision of the PIAC shall be as valid as an arbitral award.
76. How the arbitral award is made?
The arbitral award is made by a majority decision. If there is no majority, the arbitral award shall be decided by the Presiding arbitrator alone.
77. What is time limit for making an award?
The arbitration award shall be made no later than 30 days from the date on which the final hearing finishes.
78. What is included in the costs of the arbitration?
The cost of the arbitration include the expenses for remuneration of arbitrators; the centre administrative expenses; the expenses for travelling, accommodation and other relevant expenses of the arbitrators; the expenses for inspection and valuation of assets; the expenses for seeking expert advice and the expenses for other assistance at the request of the PIAC.
79. How is an arbitration award enforced?
An arbitral award may be enforced in the same manner as a court judgement. The arbitral award is final and biding on the parties.
80. What is the New York Convention?
The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, signed in New-York in 1958,give effect to private agreements to arbitrate and to recognize and enforce arbitration awards made in other contracting states.
There are 156 parties to the Convention, so it is an efficacy instrument.
81. Does the New-York Convention apply to Vietnam?
Yes, the New York Convention was ratified by Vietnam on September 12,1995.
82. How many arbitration instruments the United Nations has?
The United Nations has three arbitration instruments: The New York Convention, the Uncitral Arbitrations Rules and the Uncitral Model Law.
83. Does the settlement of dispute arising in international commercial relations need a unified legal framework?
The unified legal framework is necessary for the settlement of dispute arising in international commercial relations. So that the Uncitral Model Law together with Uncitral Arbitration Rule and the New York Convention significantly contributes to the establishment of a unified legal framework for the fair and efficient settlement of dispute arising in international commercial relations.
84. What is the aim of Uncitral Model Law?
The Uncitral Model Law was created to encourage the harmonization of arbitration law around the world. It has been successful in that aim since legislation based on the Uncitral Model Law has been adopted in over forty countries around the world, including countries such as Canada, Germany and Australia. The Uncitral Model Law is widely accepted to contain the best principle of international arbitration and there for it is sometimes used as at a tool for assisting the interpretation of national Lawson arbitration.
85. Does The Uncitral Model Law constitute a sound basis for the desired dream harmonization and improvement of nation law?
Yes. It cover all stages of the arbitral process from the arbitration agreement to the recognition and enforcement of the arbitral award and reflects a worldwide consensus on the principles and the important issues of international arbitration practice. It is acceptable to States of all regions and the different legal in economic systems of the world. Since its adoption by Uncitral, The Uncitral Model Law has come to represent the accepted international legislative standard for a modern arbitration law and a significant number of jurisdictions have enacted arbitration legislation based on the Uncitral Model Law.
86. How do you think about a Model Law?
We think the form of model law was chosen as the vehicle for harmonization and modernization in view of the flexibility it gives to States in preparing new arbitration laws. Notwithstanding that flexibility, and in order to increase the likelihood of achieving as satisfactory degree of harmonization, States are encouraged to make a few changes as possible when incorporating the Uncitral Model Law into their legal systems. Efforts to minimize variation from the text adopted by Uncitral are also expected to increase the visibility of harmonization, thus enhancing the confidence of foreign parties, as the primary users of international arbitration, in the reliability of arbitration law in the enacting States.
87. Are there important disparities in national laws on arbitration?
The Uncitral Model Law was developed to address considerable disparities in national laws on arbitration. The need for improvement and harmonization was based on findings that national law were often particulars inappropriate for international cases.
88. Are inadequacies found in domestic laws?
Recurrent inadequacies to be found in outdated national laws include provisions that equate the arbitral process with court litigation and fragmentary provisions that fail to address all relevant subtantive law issues. Even most of those laws that appear to be up-to-date and comprehensive were drafted with domestic arbitration primarily, if not exclusively, in mind. While this approach is understandable in view of fact that even today the balk of cases government by arbitration law would be a purely domestic nature, the unfortunate consequence is that traditional local concepts are imposed on international cases and the needs of modern practice are often not met.
89. Is the Uncitral Model Law intended to reduce the risk of the possible frustration in the arbitration?
The expectations of the parties as expressed in a chosen set of arbitration rules or a “one-off” arbitration agreement may be frustrated, especially by mandatory provisions of applicable law. Unexpected and undesired restrictions found in national laws may prevent the parties, for example, from submitting future disputes to arbitration, from selecting the arbitrator freely or from having the arbitral proceedings conducted according to agreed rules of procedure and with no more court involvement than appropriate. Frustration may also ensue from non-mandatory provisions that may impose undesired requirements on unwary parties who may not think about the need to provide otherwise when drafting the arbitration agreement. Even the absence of any legislative provision may cause difficulties by leaving unanswered some of the many procedural issues relevant in arbitration and not always settled in the arbitration agreement. The Uncitral Model Law is intended to reduce the risk of such possible frustration, difficulties.
90. What are the consequences of the inadequate arbitration laws or the absence of specific legislation governing arbitration?
The consequences are aggravated by the fact that national laws differ widely, such differences are a frequent source of concern international arbitration, where at least one of the parties, and often both parties are, confronted with foreign and unfamiliar provisions and procedures. Obtaining a full and precise account of the law applicable to the arbitration is, in such circumstance of expensive, impractical or impossible.
91. Does the uncertainty about the local law with the inherent risk of frustration adversely affect the functioning of the arbitration process and also impact on the relection of the place of arbitration?
Due to such uncertainly, a party may hesitate or refuse to agree to a place, which of practical reason would otherwise be appropriate. The range of places of arbitration acceptable to parties is thus widened and the smooth functioning of the arbitral proceeding is enhanced where States adopt the Uncitral Model Law, which is easily recognizable, meet the specific needs of international commercial arbitration and provides an international standard based on solutions acceptable to parties from different legal systems.
92. What does the Uncitral Model Law present as a response to the inadequacies and disparities of national laws?
The Uncitral Model Law present a special legal regime tailored to international commercial arbitration, without affecting any relevant treaty in force in the State adopting the Uncitral Model Law, while the Uncitral Model Law was designed with international commercial arbitration in mind, it offers a set of basic rules that are not, in and of themselves, unsuitable to any other type of arbitration. States may thus consider extending their enactment of the Uncitral Model Law to cover also domestic disputes, as a number of enacting States already have.
93. How is the definition of notion of “ international commercial arbitration”?
The Uncitral Model Law defines an arbitration as international if the parties to an arbitration agreement have, at the time of the conclusion of that agreement, their place of business in deferent States.
The vast majority of situations commonly regarded as international will meet this criterion. In addition The Uncitral Model Law broadens the notion of internationality so that it also covers cases where the place of arbitration, the place of contract performance, or the place of the subject matter of the dispute is situated outside the State where the parties have their place of the business or cases where the parties have expressly agreed that the subject- matter of the arbitration agreement relates to more than one country.
The Uncitral Model Law thus recognizes extensively the freedom of the parties to submit a dispute to the legal regime established pursuant to it.
94. How is the rule of the territorial criterion in the Uncitral Model Law?
The territorial criterion governing most of provisions of the Uncitral Model Law was adopted for the sake of certainly and in view of the following facts. In most legal systems, the place of arbitration in the exclusive criterion for determining the applicability of national law and, where the national law allows parties to choose procedural law of a State other than that where the arbitration takes place, experience shows that parties rarely make use of that possibility. Incidentally, enactment of the Uncitral Model Law reduces any need for the parties to choose a “foreign” law, since the Uncitral Model Law grants the parties wide freedom in shaping the rules of the arbitral proceedings. In addition to designating the law governing the arbitral procedure, the territorial criterion is of considerable practical importance, which entrust State court at the place of arbitration with functions of supervision and assistance to arbitration. It should be noted that the territorial criterion legally triggered by the partie’s choice regarding the place of arbitration does not limit the arbitral’s arbitration to meet at any place it considers appropriate for the conduct of the proceedings.
95. What is the trend in recent amendments to arbitration laws ?
Recent amendments to arbitration laws reveal in favour of limiting and clearly defining court involvement in international commercial arbitration. This is justified in view of the fact that the parties to an arbitration agreement make a conscious decision to exclude court jurisdiction and prefer the finality and expediency of the arbitral process.
96. What are the matters the court involve?
The Uncitral Model Law envisages court involvement in the following instances. A first group comprises issues of appointment, challenge and terminations of arbitrator, jurisdiction of the arbitral tribunal and setting aside the arbitral award. A second group comprises issues of court assistance in taking evidence, recognition of the arbitration agreement, including its compatibility with court-orders interim measures, court -ordered interim measures, and recognition and enforcement of interim measures and of arbitral awards.
97. Do the court intervene the instances in the above two groups only?
Beyond the instances in the above two groups, no court shall intervene, in matters governed by the Uncitral Model Law. The Uncitral Model Law thus guarantees that all instances of possible court intervention are found in the piece of legislation enacting the Uncitral Model Law except for matters not regulated by it ( for example, consolidation of arbitral proceeding, contractual relationship between arbitrator and parties or arbitral institution, or fixing of costs and fees including deposits). Protecting the arbitral process from unpredictable or disruptive court interference is essential to parties who choose arbitration ( in particular foreign parties).
98. Are there the different approaches on the question of definition and form of arbitration agreement?
The Uncitral Model Law reflects two different approaches on the question of definition and form of arbitration agreement.
The first approach follows the detailed structure of the original 1985 text of the Uncitral Model Law. It confirms the validity and effect of a commitment by the parties to submit to arbitrations an existing dispute “ compromis” or a future dispute “ clause compromissoire”. It follows the New York Convention in requiring the written form of the arbitration agreement but recognizes a record of the “contents” of the agreement “ in any form” as equivalent to traditional “ writing”. The agreement to arbitrate may be entered into in any form ( e.g including orally) as long as the content of the agreement is recorded. This new rule is significant in that it no longer requires signatures of parties or an exchange of messages between the parties. It modernizes the language referring to the use of electronic commerce by adopting wording inspired from the 1996 Uncitral Model Law on Electronic Commerce and the 2005 United Nations Convention on the use of Electronic Communications in International Contracts. It covers the situation of “ an exchange of statements of claim and defense in which the existence of “ an agreement is alleged by one party and not denied by another”. It also states that “ the reference in a contract to any document” ( for example, general conditions) “ containing an arbitration clause constitutes an arbitration agreement in writing provided that the reference is such as to make that clause part of the contract”. It thus clarified that applicable contract law remains available to determine the level of consent necessary for a party to become bound by an arbitration agreement allegedly made “ by reference”.
The second approach defines the arbitration agreement in a manner that omits any form requirement. No preference was expressed in favour of either the first approach or the second approach, both of which are offered for enacting States to consider, depending on the their particular needs, and by reference to the legal context in which the Uncitral Model Law is enacted, including the general contract law of the enacting State. Both approaches are intended to preserve the enforceability of arbitration agreement under The New York Convention.
99. Does the Uncitral Model Law distinguish between “ international” and “non-international” awards?
By treating awards rendered in international commercial arbitration in a uniform manner irrespective of where they were made, the Uncitral Model Law distinguishes between “ international” and “ non-international” awards instead of on relying on the traditional distinction between “ foreign” and “ domestic” awards. This new line is based on substantive grounds rather that territorial borders, which are inappropriate in view of the limited importance of the place of arbitration in international cases.
The place of arbitration is often chosen for reasons of convenience of parties and the dispute may have little or no connection with the State where the arbitration legally take place. Consequently, the recognition and enforcement of “ international” awards, whether “foreign” or “ domestic”) should be governed by same provisions.
100. Did Viet Nam adopt the Unicitral Model Law?
Yes. The Uncitral Model Law was adopted in Viet Nam. And not only adopted the Uncitral Model Law, Viet Nam also adopted the Uncitral Arbitration Rules and participated in the New York Convention.
The Law on Commercial Arbitration 2010 of Viet Nam was based the key principles of the above international legislations. So that this law opened a new chapter, in particular with respect to international commercial arbitration.