What should you do when disagreeing with an arbitration award?

Legal situation:

Our company recently received an arbitration award over a dispute. However, we disagreed with this award. I've heard that arbitration awards cannot be appealed, like court judgments. Is this information correct? What should our company do to object to this award? We would greatly appreciate your legal advice. Thank you.

FDVN’s Opinion: 

Thank you for entrusting your request to FDVN Law Firm. We would like to share with you our opinions as follows:

[1] What should you do when disagreeing with an arbitration award? 

According to Clause 10 of Article  3 of the Law on Commercial Arbitration 2010, the definition of an arbitral award is that it means a decision of the arbitration council settling the entire dispute and terminating the arbitral proceedings.

Clause 5 of Article 4 of Law on Commercial Arbitration 2010 also states that “arbitrall awards are final”. 

So, the arbitral award is final and terminates the arbitral proceedings, and therefore, you cannot request the Arbitration Council to review the award, or, in other words, you cannot appeal the arbitral award.

However, in Law on Commercial Arbitration 2010, there are cases in which you can request the annulment of an arbitral award. Specifically, it is stipulated in Article 69 of Law on Commercial Arbitration 2010 on the right to request the annulment of an arbitral award as follows:

“Article 69. Right to request cancellation of arbitral awards

1. Within 30 days after receiving an arbitral award, if a party has sufficient grounds for evidencing that the arbitration council has issued the award falling into any of the cases specified in Clause 2, Article 68 of this Law. it may file a request with the competent court for cancellation of such award. Such a request must be enclosed with documents and evidence proving that such a request is grounded and lawful.

2. When a request is lodged beyond the set time limit due to force majeure circumstances, the period in which such circumstances exist will not be included in the time limit for requesting cancellation of an arbitral award.”

It is also provided in Clause 2 Article 68 of Law on Commercial Arbitration 2010 that:

“2. An arbitral award shall be canceled in any of the following cases:

a/ There is no arbitration agreement or the arbitration agreement is invalid;

b/ The arbitration council's composition or procedures of arbitral proceedings is/arc incompliant with the parties' agreement or this Law:

c/ The dispute falls beyond the arbitration council's jurisdiction: when an arbitral award contains details falling beyond the arbitration council's jurisdiction, such details shall be canceled:

d/ The evidence provided by the parties on which the arbitration council bases to issue the award is counterfeit: an arbitrator receives money, assets, or other material benefits from one disputing party, thus affecting the objectivity and impartiality of the award;

e/ The award contravenes the fundamental principles of Vietnamese law.”

So, if you insist that the arbitral award breaches any of the conditions listed in Clause 2 of Article 68 of Law on Commercial Arbitration 2010, you are allowed to submit a claim to the court demanding that the arbitral award be annulled within 30 days of receiving it.

[2] The procedure for submitting a petition to the court to request the annulment of an arbitral award:

According to Point g, Clause 2 or Article 7 of Law on Commercial Arbitration 2010, the court in the instance of a request to annul an arbitral award is the court located in the jurisdiction where the arbitral tribunal issued the arbitral award.

Dossiers: 

According to Article 70 of Law on Commercial Arbitration 2010, the dossiers for cancellation of an arbitral award must contain: 

- A written request for cancellation of an arbitral award must contain a/ Dale of making; b/ Name and address of the requester; c/ Request and grounds for cancellation of the award.

- A written request must be enclosed with the following papers: a/ Original or certified copy of the arbitral award; b/ Original or certified copy of the arbitration agreement.

Enclosed papers in a foreign language shall be translated into Vietnamese and such translations shall be legally certified. 

Procedure: 

According to Article 71 of Law on Commercial Arbitration 2010, examination by courts of written requests for cancellation of arbitral awards is as follows:

Step 1: After accepting a written request for cancellation of an arbitral award, the competent court shall immediately notify such to the arbitration center or arbitrators of the ad hoc arbitration council, the disputing parties, and the procuracy of the same level.

Step 2: Within 7 working days after accepting a written request, the court president shall designate an examination council which is composed of three judges, including one to act as the chair as assigned by the court president.

Within 30 days after being designated, the examination council shall hold a meeting to examine the written request for cancellation of an arbitral award. The court shall, within 7 working days before opening the meeting, transfer the dossier to the procuracy of the same level for study before attending this meeting. Upon the expiration of this time limit, the procuracy shall return the dossier to the court for the purpose of opening a meeting to examine the written request.

Step 3: A meeting shall be conducted in the presence of the disputing parties and their lawyers, if any. and a procurator of the procuracy of the same level. If one of the parties is absent or has been properly summoned but is absent without a plausible reason or leaves the meeting without the council's consent, the council shall still examine the written request.

Step 4: When examining the written request, the council shall base itself on Article 68 of this Law and the enclosed documents to consider and make a decision: it will not review the dispute already settled by the arbitration council. After examining the written request and enclosed documents and hearing the opinions of the summoned persons, if any. and after the procurator presents the procuracy's opinions, the council shall discuss and make the decision by majority vote.

Step 5: The examination council may decide to cancel or not to cancel an arbitral award. When the requester withdraws the request, has been properly summoned but is absent without a plausible reason, or leaves the meeting without the council's consent, the council shall decide to terminate the examination of such request.

Remarks: 

- At the request of one of the parties and when appropriate, the examination council may suspend the examination and processing of a request for not more than 60 days in order to facilitate the arbitration council in correcting errors of the arbitral proceedings in its viewpoint in order to remove the grounds for canceling the arbitral award. The arbitration council shall notify the court of such correction. If the arbitration council fails to correct errors in the proceedings, the examination council shall continue examining the written request.

- If the examination council issues a decision canceling the arbitral award, the parties may reach a new agreement to bring their dispute to arbitration, or any of them may initiate a lawsuit in court. If the examination council does not cancel the arbitral award, such award shall be enforced.

- In all cases, the time for dispute settlement at arbitration and for carrying out procedures to cancel an arbitral award at court will not be included in the statute of limitations for initiating a lawsuit.

- The court's decision is final and effective for enforcement.

FDVN's advisory opinion on your request is based on our examination of the applicable legal laws. We hope that FDVN's advice will be useful to you.

Hoàng Thuý Quỳnh  – FDVN Law Firm

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