Is the arbitration agreement void if the arbitration institution resolving a dispute is not clearly

Legal situation: I signed a Purchase Agreement through Company X, a real estate brokerage firm. The dispute resolution clause of the Purchase Agreement states that any disputes between the parties will be resolved by arbitration. However, the clause does not specify which arbitration organization will be used to resolve the disputes. My question is whether this agreement is invalid. In the event of a dispute, how should the arbitration organization be selected?

FDVN’s opinion:

Thank you for sending your questions to FDVN Law Firm (“FDVN”). With regard to your consultancy requests, after studying the relevant legal regulations, FDVN has some opinions as follows:

1. Does the arbitration agreement not specify whether the arbitral institution resolving the dispute invalid?

Article 5 of the Law on the Commercial Arbitration 2010 stipulating conditions for dispute settlement by arbitration stipulates:

“1. Disputes will be resolved by arbitration if the parties have an arbitration agreement. The arbitration agreement may be drawn up before or after the dispute has arisen.

2. In case a party joins an arbitration agreement where an individual dies or loses behavioural ability, the arbitration agreement shall remain valid for that person’s heirs or legal representatives, unless otherwise agreed by the parties.

3. In case a party to the arbitration agreement is an organisation that must terminate its operation, go bankrupt, dissolve, consolidate, merge, divide, separate or change its organisational form, the arbitration agreement remains valid for the organisation receiving its rights and obligations except otherwise agreed by the parties.”

Accordingly, based on the above regulations, you and Company X have an arbitration agreement, which is stipulated in the dispute resolution clause of the Purchase Agreement and confirmed by both parties, meeting the conditions for dispute resolution by arbitration. An arbitration agreement is only invalid if it falls under one of the cases specified in Article 18 of the Law on Commercial Arbitration 2010 regarding invalid arbitration agreements, specifically as follows:

“Article 18. Invalid Arbitration Agreement

1. Dispute arising in areas not under the jurisdiction of Arbitrations specified in Article 2 of this Law

2. The person who establishing the arbitration agreement don’t have jurisdiction as prescribed by law

3. The person establishing the arbitration agreement has no capacity for civil acts in accordance with the provisions of the Civil law

4. The form of the arbitration agreement is not in accordance with the provisions of Article 16 of this Law

5. One of the parties is deceived, threatened or coerced in the process of establishing an arbitration agreement and has a request to declare such arbitration agreement invalid.

6. The arbitration agreement violated the prohibition of law”

Therefore, in the case of the arbitration agreement between you and Company X, even though the specific arbitration organisation is not specified but does not fall under the mentioned cases, it shall not be rendered void.

2. Selecting an arbitration institution when a dispute occurs.

According to the provisions of Article 43, Clause 5 of the 2010 Commercial Arbitration Law on considering invalid arbitration agreements, unenforceable arbitration agreements, and the authority of the Arbitration Council: "Where the parties have arbitration agreement but not only the form of arbitration or the specific arbitration organisation cannot be determined, then when there is a dispute, the parties must re-agree on the form of arbitration or specific arbitration organisation to resolve the matter. resolve the dispute. If no agreement can be reached, the choice of form and arbitration organisation to resolve the dispute will be made at the request of the plaintiff”.

So, in the case where you and Company X have agreed to arbitration but cannot determine the specific arbitration organisation, in the event of a dispute, you and Company X must re-agree on the arbitration format or the specific arbitration organization to resolve the dispute. If no agreement can be reached, the choice of arbitration format or organisation to resolve the dispute shall be made at the request of the plaintiff.

Above is FDVN's consulting opinion regarding your consulting request based on the provisions of law. Hopefully FDVN's advice will be useful to you.

Nguyen Van Anh - FDVN Law Firm

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