The Arbitral Award is the decision of the Arbitral Tribunal to settle the dispute and terminate the arbitration proceedings[1]. After the Arbitral Award, the award creditor (i.e., the winning party in the case) will perform the following tasks to request the award debtor to perform its obligations to him/her.
1. Voluntary execution:
Accordingly, the judgment creditor notifies the judgment debtor of the voluntary execution of the judgment or the expiration of the time limit for judgment execution of the Award in the Arbitral Award, but if the judgment debtor does not voluntarily execute the judgement and does not request the cancellation of the Arbitral Award, it has the right to request the competent civil enforcement agency to enforce the Arbitral Award.
2. Request the competent Enforcement Authority:
Accordingly, if the judgment debtor does not voluntarily execute the judgment, the judgment creditor has the right to make an application to the civil enforcement agency competent to enforce the Arbitral Award after the Award is registered.
However, during enforcing an Arbitral Award, there are many arising inadequacies and shortcomings. Through this article, the author outlines some hereinafter typical inadequacies:
a) Firstly, regarding the procedures to receive and accept the request for execution of Arbitral Award of the Arbitral Tribunal:
According to Clause 1, Article 66 of Law on Commercial Arbitration 2010, if the time limit for enforcement of the arbitral award expires, but the award debtor does not does not voluntarily pay and does not request annulment of the Arbitral Award as prescribed under Article 69 of Law on Commercial Arbitration 2010, the award creditor has the right to make an application to competent civil judgment enforcement agency (“CJEA”) to enforce the arbitral award. However, the shortcoming is that the effective date of the Arbitral Award is not the date the Arbitral Award is issued for enforcement at the competent CJEA. The enforceability of an Arbitral Award is determined under Articles 61 and 66 of the 2010 Law on Commercial Arbitration. Under Point g, Clause 1, Article 61 of the Law on Commercial Arbitration 2010, the Arbitral Award shall provide “Time limit for enforcement of the award“. Therefore, to determine the conditions for receiving the written requests for judgment enforcement, the CJEA must rely on the time limit to clear two issues: firstly, whether the time limit for Arbitral Award has expired; secondly, whether the award debtor asks the Court to annul the Arbitral Award, from which the CJEA has grounds to receive the application for execution and settle the case.
Concerning the Arbitral Award, the award creditor has the right to make an application to the competent CJEA to enforce the Arbitral Award after the Award is registered under Article 62 of the Law on Commercial Arbitration 2010. Article 62 of the Law on Commercial Arbitration 2010 states: ” Within 1 year after an Arbitral Award is issued, the party requesting registration of an Award of ad hoc arbitration shall apply for such registration to the competent Court. After receiving an application for registration of an Arbitral Award, the Court shall register or refuse to register the Award.” Therefore, to receive an application for execution, the CJEA must require the litigants to prove that the Arbitral Award has been registered in the Court.
However, in practice, it is difficult to certify the validity of the Arbitral Award. To request enforcement of an Arbitral Award, the party requesting enforcement must prove that the Arbitral Award was not annulled by the Court. In many cases, litigants who request the competent Court to certify an Arbitral Award that has not been annulled have not received an answer from the Court, resulting in delayed or unrecognized execution records at the CJEA due to the failure of certification of the Arbitral Award’s validity. Moreover, the determination of the validity of the Arbitral Award as the responsibility of the CJEA or litigant has not been clearly defined, leading to difficulties in the execution of the judgment.
In this regard, in Petition No. 1680/PTM – VP dated 14/07/2017 of the Vietnam International Arbitration Center on the enforcement of the Arbitral Award, one of the shortcomings when filing a request for enforcement of the Arbitral Award is the fact that the CJEA requires the litigant to provide a Court Certificate of acceptance, settlement of the petition for annulment of the Arbitral Award. While the Court does not have any process or procedure for issuing this Certificate, the issuance of the Certificate is entirely dependent on the practice of each Court. The enforcement of the Arbitral Award is contingent upon the Court issuing a certificate that has limited the legitimate rights and interests of the judgment creditor. On the other hand, the procedure for obtaining confirmation by the Court is an independent administrative procedure, which must be carried out before applying to the CJEA, resulting in the process of requesting the enforcement of an Arbitral Award being doubled in terms of procedure.
At the same time, the Petition also raises the inadequacy of the requirement that the party requesting the Department of Arbitral Award must have evidence that the Arbitral Award has been enforceable. It will be difficult to know whether the Court is processing and resolving the request to cancel the Arbitral Award while the award debtor, who is the subject of the application for cancellation of the Arbitral Award, and the Court, who has the authority to consider cancelling the Arbitral Award, can easily provide information. Therefore, it is more reasonable to obtain information from the party subject to the arbitral award or the Court. The aforementioned Petition reflects the inadequacies recently in requesting for Arbitral Award truthfully.
b) Secondly, regarding the statute of limitations for enforcing the Arbitral Award.
According to the Law on Civil judgment enforcement (Article 30 of the Law On Amending And Supplementing A Number Of Articles Of The Law On Enforcement Of Civil Judgments 2014 and Article 4 of the Government’s Decree No. 62/2015/ND-CP detailing and guiding the implementation of a number of articles of the Law On Amending And Supplementing A Number Of Articles Of The Law On Enforcement Of Civil Judgments 2014), “the statute of limitations for requesting execution is 5 years after a judgment or ruling takes effectiveness. In case a time limit for fulfilling an obligation is set in the judgment or ruling, the 5-year statute of limitations shall be counted from the date the obligation is due. For judgments and rulings subject to periodical enforcement, the 5-year statute of limitations shall apply to each period and be counted from the date the obligation is due”. Under Clause 5, Article 61 of the Law on Commercial Arbitration 2010, the Arbitral Award is final and in force on the date of its signing. However, Clause 2, Article 66 of the 2010 Law on Commercial Arbitration stipulates: “For ad hoc arbitration’s awards, the award creditor may request in writing the competent civil judgment enforcement agency to enforce the award after it is registered under Article 62 of the Law on Commercial Arbitration 2010”, and the time limit for registration is 1 year from the date that the Arbitral Award is issued. The question is, when exactly is the statute of limitations for the execution of a judgment calculated: from the date of the Arbitral Award is issued or from the time the Award is registered in Court? Thereby, the inconsistency between the aforementioned provisions has caused the actual statute of limitations to enforce the Arbitral Award to be less than 4 years from the effective date of the Arbitral Award rather than 5 years. Hence, there is a need for more specific regulations on this issue.
In the next article, the author will present the next inadequacies in the process of enforcing commercial Arbitral Awards, we kindly invite readers to read.
[1] Clause 10 Article 3 of the Law on Commercial Arbitration
