PROCEDURES FOR RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS IN VIETNAM

PROCEDURES FOR RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS IN VIETNAM
Posted date: 07/10/2024

In the context of an increasingly interconnected and interdependent global economy, the robust growth of international trade has made arbitration a popular and preferred method for resolving commercial disputes. For developing countries like Vietnam, the surge in foreign investment and complex international commercial transactions has generated a growing demand for the recognition and enforcement of foreign arbitral awards. This is not only a crucial legal requirement to ensure fairness and transparency in the business environment but also a clear demonstration of Vietnam’s commitment to upholding international standards and facilitating foreign investment.

The recognition and enforcement of foreign arbitral awards in Vietnam not only protect the legitimate rights and interests of the involved parties but also contribute to building trust and promoting the development of the investment environment. This is a vital factor in attracting international capital flows while enhancing Vietnam’s reputation on the global stage. In the context of intensifying global competition, establishing and maintaining a robust legal system capable of resolving disputes effectively and fairly is crucial for Vietnam’s sustainable development and asserting its position on the world economic map.

1. Foreign Arbitral Awards Recognized and Enforced in Vietnam

According to Clauses 11 and 12, Article 3 of the Law on Commercial Arbitration 2010, Foreign arbitration means an arbitration formed under a foreign law on arbitration and selected as agreed by the parties to settle a dispute outside or within the Vietnamese territory. Furthermore, foreign arbitral award means an award pronounced by a foreign arbitration outside or within the Vietnamese territory which is selected as agreed by the parties to settle their disputes.

Pursuant to Article 424 of the Civil Procedure Code 2015, foreign arbitral awards considered for recognition and enforcement in Vietnam include:

a) Arbitral award of a foreign country which is a signatory to an International treaty about recognition and enforcement of foreign arbitral award together with Vietnam;

b) Foreign arbitral award other than those specified in point a of this clause on the basis of principle of reciprocity.

Additionally, this foreign arbitral award shall be the final ones of the arbitral tribunal that resolve all the contents of the dispute, finish the arbitral procedures and are effective.

Under these provisions, Vietnamese courts review requests for the recognition and enforcement of foreign arbitral awards based on two fundamental principles: international treaties and the principle of reciprocity.

.2. Person has a right to apply for Request Recognition and Enforcement of Foreign Arbitral Awards in Vietnam

According to Article 425 of the Civil Procedure Code 2015, the party entitled to enforcement or their legal representative has the right to request the Vietnamese courts to recognize and enforce foreign arbitral awards in the following cases:

+ The individual required to enforce the award resides or works in Vietnam; or

+ The organization or agency are headquartered in Vietnam; or

+ The assets related to the enforcement of the foreign arbitral award are located in Vietnam at the time of the request.

3. Time Limit for Requesting Recognition of Awards

Pursuant to Article 451 of the Civil Procedure Code 2015, the time limit for filing a request for recognition and enforcement is 03 years from the day on which the foreign arbitrator’s award takes legal effect. In cases where the applicant can prove that he/she cannot submit the application within the time limit specified in clause 1 of this Article due to a force majeure event or an objective obstruct, the time period when such force majeure event or objective obstruct occurs shall not be included in the time limit for submission of application.

4. Competent Authorities for Handling the Request

- The Ministry of Justice of Vietnam, as per the international treaties of which Vietnam is a member; or

- Competent courts under the Civil Procedure Code 2015, in cases where no international treaty exists or where the relevant international treaty does not specify a competent authority to request recognition and enforcement of the award in Vietnam.

5. Form and Content of the Request

According to Article 452 of the Civil Procedure Code 2015, the request for recognition and enforcement of foreign arbitral awards can be made in Vietnamese or, if made in a foreign language, must be enclosed with their Vietnamese versions which are duly notarized or authenticated.

An application must contain the following principal details:

- Full names and addresses of residence places or work places of the judgment creditors or their lawful representatives in Vietnam; if the judgment creditors are agencies or organizations, the full names and addresses of their head-offices must be fully inscribed;

- Full names and addresses of residence places or work places of the judgments debtors; if the judgments debtors are agencies or organizations, the full names and addresses of their head-offices must be fully inscribed; in cases where the judgment debtors being individuals do not have residence places or work places in Vietnam or the judgment debtors being agencies or organizations do not have head-offices in Vietnam, their applications must also specify the addresses of the places where exist the properties and assorted properties relating to the enforcement in Vietnam of foreign arbitrator’s award;

- Requests of the judgment creditors.

Attached documents:

+ Documents stipulated in the international treaty to which Vietnam is a member.

+ In case where there is no International treaty or the International treaty does not provide for the case, the following papers and documents shall be enclosed with the application:

+ The originals or certified true copies of the foreign arbitrator’s award;

+ The originals or certified true copies of arbitration agreements between parties.

If the arbitral award and arbitration agreement are not in Vietnamese, the applicant must be enclosed with their Vietnamese versions which are duly notarized or authenticated.

6. Procedures for Requesting Recognition and Enforcement of Foreign Arbitral Awards

Step 1: Submission of Request for Recognition and Enforcement of the Award

Prepare the request for recognition and enforcement of the foreign arbitral award, accompanied by the required documents as specified in Article 452 of the Civil Procedure Code 2015, and submit it to the Ministry of Justice or the competent court.

Step 2: Acceptance and Preparation for Reviewing the Request

- Within 05 working days from the day on which the application and enclosed papers and documents, the Ministry of Justice shall forward them to the competent Court.

- Within 05 working days from the date of receipt of the request and accompanying documents, the competent Courts shall base themselves to consider and accept the dossiers and notify in writing such to the judgment creditors, the judgment debtors or their lawful representatives in Vietnam, the Procuracies of the same levels and the Ministry of Justice.[1] 

- If, after acceptance, the court determines that the matter falls within the jurisdiction of another Vietnamese court, it will transfer the case dossier to the competent court and remove the request from its register. This decision must be promptly sent to the equivalent-level procuracy and the parties involved.[2] 

Step 3: Hearing on the Request

- The time limit for preparing to consider the request is 02 months from the date of acceptance and may be extended for up to 02 more months if necessary to clarify information in the request. During this stage, the court may issue one of three decisions: to suspend the request, to dismiss the request, or to open a hearing on the request.[3] 

- The council for hearing the request comprises three judges, with one judge acting as the presiding officer as assigned by the chief judge. The council has the authority to issue a decision recognizing and enforcing the foreign arbitral award in Vietnam or a decision refusing to recognize the award.[4] 

Step 4: Delivery of the Court’s Decision[5] and Appeals, Protests[6] 

- Within 15 days from the day on which the decision to recognize and enforce or to not recognize in Vietnam the foreign arbitrator’s award is issued, the Court shall send such decision to involved parties or their lawful representatives, the Ministry of Justice and the procuracy of the same level.

- Right to Appeal: Within 15 days from the date the court issues its decision, the parties involved or their legal representatives have the right to appeal the decision. If the parties were not present at the hearing, the appeal period begins from the date they receive the decision.

- Right to Protest: The time limit for protests by the provincial-level procuracy is seven days, and by the superior procuracy is ten days from the date they receive the decision.

- The civil enforcement agency will continue to carry out the enforcement of the recognized award in accordance with the content of the recognized decision.


[1] Article 455 of The Civil Procedures Code 2015

[2] Article 456 of The Civil Procedures Code 2015

[3] Article 457 of The Civil Procedures Code 2015

[4] Article 458 of The Civil Procedures Code 2015

[5] Article 460 of The Civil Procedures Code 2015

[6] Article 461 of The Civil Procedures Code 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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