Summary: Recognition and enforcement of foreign arbitral awards in Vietnam is always a concern for foreign investors and enterprises operating in Vietnam or having business with Vietnamese enterprises. This article provides a prominent example of the recognition and enforcement of foreign arbitral awards by Vietnamese courts in practice. Accordingly, the Decision no. 03/2023/KN-KDTM on appeal according to cassation procedure demonstrates that the recognition and enforcement of the Foreign Arbitral Awards in Vietnam has been applied to the cassation.
In the article below, we will not analyze or provide any assessment of the content of the case. Instead, the article will clarify the stages of the proceedings for the recognition and enforcement of the Foreign Arbitral Award in Vietnam in relation to the case mentioned in the Decision no. 03/2023/KN-KDTM on appeal according to cassation procedure.
Keywords: #arbitration_award_annulment #commercial_arbitration #judgement #arbitral_award #court # appeal_according_to_cassation_procedure #cassation #recognition_and_enforcement #foreign_arbitral_award #law_on_commercial_arbitration_2010
1. Information of the parties
- Applicant: Wec Engineers & Constructors Pte., Ltd Company (“Wec Company”)
- The party obliged to execute: Tan Son Nhat Petrol Commercial Joint Stock Company (“Tapetco Company”)
2. Summary of the dispute:
A summary of the procedure is shown in the diagram below
The detailed procedure is as follow:
2.1. In 2017, Wec Company request for arbitration against Tapetco Company to the International Court of Arbitration of the International Chamber of Commerce (“ICC Arbitration“) due to Tapetco Company’s breach of payment obligations under the contract between the parties.
2.2. On 06 August 2019, the Ad-hoc Arbitral Tribunal of the ICC Arbitration Case (“ICC Arbitral Tribunal“) conducted the hearing for the case, with the hearing location at the headquarters of the Vietnam International Arbitration Center (“VIAC“) in Ho Chi Minh City. The parties reached a settlement agreement through negotiation.
2.3. On 01 October 2019, the ICC Arbitral Tribunal issued Award n 22845/PTA based on the agreement of the parties.
2.4. Wec Company sent an application to the Ho Chi Minh City People’s Court (“HCMC People’s Court“) for the recognition and enforcement in Vietnam the Award n 22845/PTA due to the failure of Tapetco Company at correctly fulfilling the agreement.
2.5. On 26 May 2021, the HCMC People’s Court issued the Decision n 766/2021/QDST-KDTM, which recognized and enforced in Vietnam the Arbitral Award no. 22845/PTA of the ICC Arbitral Tribunal.
2.6. On 03 June 2021, Tapetco Company filed an appeal against the Decision of the HCMC People’s Court to the High People’s Court in Ho Chi Minh City (“High People’s Court in HCMC“).
2.7. On 13 May 2022, the High People’s Court in HCMC issued the Decision n 24/2022/QD-PT accepting the appeal of Tapetco Company, which rejected to recognize and enforce in Vietnam the Arbitral Award no. 22845/PTA of the ICC Arbitral Tribunal.
2.8. On 11 May 2023, the HCMC People’s Court sent Official Letter n 201/TATP to the Supreme People’s Court (“Supreme Court“) proposing the Supreme Court to apply the cassation procedure against the Appellate Decision no. 24/2022/QD-PT by the High People’s Court in HCMC.
2.9. On 09 June 2023, the Chief Justice of the Supreme People’s Court issued the Decision n 03/2023/KN-KDTM on appeal according to cassation procedure, in which:
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- Appeal according to the cassation procedure agaisnt the Appellate Decision n 24/2022/QD-PT by the High People’s Court in HCMC;
- Request the Supreme People’s Court to apply the cassation procedure, cancel the Appellate Decision no. 24/2022/QD-PT by the High People’s Court in HCMC;
- Temporarily suspend the enforcement of the Appellate Decision n 24/2022/QD-PT by the High People’s Court in HCMC until the Supreme People’s Court issued the Cassation Review Decision.
3. Procedural issues
3.1. The competence to resolve application for recognition and enforcement of foreign arbitral awards by the HCMC People’s Court.
(a) Article 451.1 of the Civil Procedure Code 2015 indicates the competent authority to receive applications for recognition and enforcement of foreign arbitral awards, whereby the applicant can submit an application to:
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- Vietnam Ministry of Justice in accordance with the international treaties of which Vietnam is a member; or
- The competent court in Vietnam according to the Civil Procedure Code 2015 in cases the international treaties of which Vietnam is a member have no related provision or no related international treaty of which Vietnam is a member.
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(b) The international treaties, of which Vietnam is a member, related to recognition and enforcement of foreign arbitral awards have no specific regulation on which authority has the competence in resolving applications for recognition and enforcement of foreign arbitral awards. Specifically:
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- Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention 1958”):
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“This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.”
In this case, the dispute was resolved by the ICC Arbitral Tribunal on 06 August 2019, with the hearing location being in Vietnam. The Arbitral Award no. 22845/PTA of the ICC Arbitral Tribunal was issued on 01 October 2019 and was authenticated in Paris, France. Currently, Vietnam is a member of the New York Convention 1958. According to the Law on Commercial Arbitration 2010 [1], Arbitral Award no. 22845/PTA is the Award by foreign arbitration and shall not be considered as an Award by domestic arbitration. Therefore, the recognition and enforcement of the Arbitral Award no. 22845/PTA falls within the scope of application of the New York Convention 1958.
Article 5 of the Convention only stipulates the conditions and procedures for making applications and resolving applications for recognition and enforcement of foreign arbitral awards; it does not clearly specify the competent authority to resolve applications for recognition and enforcement at the place where the application is made.
In addition, the New York Convention 1958 does not contain either any provisions regarding the competent authority to resolve applications for recognition and enforcement of foreign arbitral awards in member states.
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- Agreement on mutual judicial assistance in civil matters between The Socialist Republic of Vietnam and The Republic of France
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Article 24 of the Agreement refers the recognition and enforcement of arbitral awards to the provisions of the New York Convention 1958. Furthermore, the Agreement does not contain any provision regarding the competent authority to resolve applications for recognition and enforcement of arbitral awards by each party.
Based on Article 451.1 of the Civil Procedure Code 2015 and the relevant international treaties of which Vietnam is a member, Vietnamese Court is the competent authority to resolve applications for recognition and enforcement of foreign arbitral awards in Vietnam.
(c) According to Article 31.5 of the Civil Procedure Code 2015, “applications for recognition and enforcement in Vietnam of foreign arbitral awards in commercial matters” shall be within the jurisdiction of the Court.
(d) According to Article 35.2(c) and Article 37.1(b) of the Civil Procedure Code 2015, applications for recognition and enforcement in Vietnam of foreign arbitral awards shall be within the jurisdiction of the Provincial Court.
(e) According to Article 39.2(e) of the Civil Procedure Code 2015 [2], the party obliged to execute the Arbitral Award is Tapetco Company, headquartered in Ho Chi Minh City, as a result, the resolution of application for recognition and enforcement of the Arbitral Award shall be within the jurisdiction of the HCMC People’s Court.
3.2.The resolution of appeals against decisions on recognition and enforcement of foreign arbitral awards by the High People’s Court in HCMC
The Decision no. 766/2021/QDST-KDTM on the recognition and enforcement in Vietnam of Foreign Arbitral Award by the HCMC People’s Court could be appealed. The consideration and resolution of appeals shall fall within the jurisdiction of the High People’s Court.
(a) Pursuant to Article 426 of the Civil Procedure Code 2015 [3], Tapetco Company (as an involved party) has the right to appeal the Decision n 766/2021/QDST-KDTM on recognition and enforcement of the Foreign Arbitral Award by the HCMC People’s Court, and request the High People’s Court to review this Decision.
The High People’s Court in HCMC has the authority to review the Decision no. 766/2021/QDST-KDTM on recognition and enforcement of the Foreign Arbitral Award by the HCMC People’s Court.
(b) The High People’s Court on HCMC shall review the Decision n 766/2021/QDST-KDTM of the HCMC People’s Court which was appealed according to the procedures stipulated in Article 462 of the Civil Procedure Code 2015.
3.3. The appeal according to cassation procedure by The Chief Justice of the Supreme People’s Court
The Appellate Decision no. 24/2022/QD-PT by the High People’s Court in HCMC can be appealed according to the cassation procedure by the Chief Justice of the Supreme Court or the Chairperson of the Supreme People’s Procuracy.
(a) According to Article 326.1(c) of the Civil Procedure Code 2015, the Appellate Decision no. 24/2022/QD-PT by the High People’s Court in HCMC can be appealed pursuant to the cassation procedure due to “mistakes in the application of law leading to the issuance of wrong judgments/decisions, causing bad effect to legitimate rights and interests of involved parties.”
(b) According to Article 331.1 of the Civil Procedure Code 2015 [4], the Chief Justice of the Supreme People’s Court has the authority to appeal according to cassation procedure against the Appellate Decision no. 24/2022/QD-PT by the High People’s Court in HCMC.
(c) According to Article 332.2 of the Civil Procedure Code 2015 [5], the Chief Justice of the Supreme People’s Court has the authority to decide on the temporary suspension of the enforcement of the Appellate Decision no. 24/2022/QD-PT by the High People’s Court in HCMC.
3.4. The subsequent stages of the procedure after the Chief Justice of the Supreme People’s Court issued the Decision no. 03/2023/KN-KDTM on appeal according to cassation procedure
(a) After the Chief Justice of the Supreme People’s Court issued the Decision on appeal according to cassation procedure, this Decision and the case documents must be sent to the Supreme People’s Procuracy. After 15 days of reviewing the case documents, the Supreme People’s Procuracy must transfer the case documents to the competent court of cassation (Article 336 of the Civil Procedure Code 2015).
(b) According to Article 337.2(a) of the Civil Procedure Code 2015, the Judges’ Council of the Supreme People’s Court shall review the Decision according to cassation procedure with the Panel consisting of five Judges (“Cassation Review Panel”).
(c) The Cassation Review Panel shall conduct the cassation review in accordance with the prescribed procedure from Article 338 to Article 343 of the Civil Procedure Code 2015; then issue Cassation Review Decision in accordance with the provisions from Article 344 to Article 348 of the Civil Procedure Code 2015.
(d) The Cassation Review Decision will then be sent to the involved parties; to the High People’s Court in HCMC; to the Supreme People’s Procuracy and the enforcement agency.
(e) Besides, the Decision of Judges’ Council of the Supreme People’s Court may also be requested for reconsideration (Articles 358, 359, and 360 of the Civil Procedure Code 2015).
4. Conclusion
Overview of the procedure on recognition and enforcement in Vietnam of foreign arbitral awards shall be described as follows:
[1] Article 3.10 and 3.11 of the Law on Commercial Arbitration 2010:
“10. Arbitral award means a decision of the arbitration council settling the entire dispute and terminating the arbitral proceedings.
- 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.”
[2] Article 39.2(e) of the Civil Procedure Code 2015
“e) The Courts of the areas where the persons who are obliged to execute award of foreign arbitration reside or work, applicable to judgment debtors being individuals, or where the judgment debtors are headquartered, applicable to judgment debtors being agencies or organizations, or where exists the property relating to the enforcement of foreign arbitral award, shall have the jurisdiction to resolve the application for recognition and enforcement in Vietnam of foreign arbitral awards;”
[3] Article 426 of the Civil Procedure Code 2015
“Article 426. Ensuring the right to appeal
The involved parties shall be entitled to appeal and People’s Procuracies of provinces and the Supreme People’s Procuracy shall be entitled to appeal against Court decisions to recognize and enforce or not recognize civil judgments or decisions of foreign Courts or decisions to recognize and enforce foreign arbitral award to request High People’s Court to review under the provisions of this Code.”
[4] Article 331.1 of the Civil Procedure Code 2015
“Article 331. Persons competent to appeal according to cassation procedures
- The Chief Justice of the Supreme People’s Court and the Chairperson of the Supreme People’s Procuracy shall be competent to appeal according to cassation procedure against the legally effective judgments or decisions of the High People’s Court; legally effective judgments or decisions of other Courts when it is deemed necessary, except for cassation decisions of the Judges’ Council of the Supreme People’s Court.”
[5] Article 332.2 of the Civil Procedure Code 2015
“Article 332. Postponement and suspension of enforcement of legally effective judgments or decisions
- Persons who have appealed according to cassation procedures legally effective judgments or decisions shall have the right to decide on the suspension of enforcement of such judgments or decisions until the cassation decisions are made.”
