Incompatibility of Vietnam’s Legislation with the New York Convention 1958 and International Practices on Non-Recognition of Foreign Arbitral Awards

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Vietnam's legislative framework regarding arbitration has faced criticism for its inconsistencies with the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958). While Vietnam ratified the Convention, certain provisions within its Arbitration Law and Civil Procedure Code may undermine the principles established by the Convention. For instance, the Vietnamese legal framework imposes stricter requirements for the enforcement of foreign arbitral awards compared to the more liberal standards outlined in the New York Convention. This includes excessive scrutiny of the merits of the dispute or procedural irregularities, which can hinder the swift enforcement of awards and contravene the Convention's aim to facilitate international arbitration.

Vietnam’s Legislative Framework for Arbitration

Vietnam’s legislative framework for arbitration has undergone significant evolution, particularly with the enactment of the Law on Commercial Arbitration in 2010, which marked a critical step towards aligning Vietnamese arbitration practices with international standards. This law provides a comprehensive set of guidelines governing the arbitration process, including the formation of arbitration agreements, the appointment of arbitrators, and the enforcement of arbitral awards. Central to this framework is the emphasis on party autonomy, allowing parties to freely determine the arbitration process concerning their disputes.

In addition to the 2010 law, Vietnam is also subject to various international treaties and conventions, including the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. However, the country has faced challenges regarding the effective recognition and enforcement of foreign arbitral awards. Under Vietnamese law, foreign arbitral awards must adhere to specific procedures and conditions for recognition, which may not always align with the streamlined processes endorsed by the New York Convention. This inconsistency raises concerns among foreign investors and international entities considering arbitration in Vietnam.

Recent developments have attempted to address some of these discrepancies. Amendments in 2015 aimed to promote greater adherence to international arbitration practices, enhancing legal clarity and procedural efficiency. Nevertheless, challenges remain within the Vietnamese legal system, such as limited judicial support for the enforcement of foreign arbitral awards and a lack of familiarity among local courts with international arbitration standards. These issues impede Vietnam’s compatibility with international practices, especially those outlined in the New York Convention, and continue to pose hurdles for investors seeking arbitration as an effective means of dispute resolution in the country.

Key Points of Incompatibility Between Vietnam’s Laws and the New York Convention

Vietnam’s arbitration legislation exhibits several key points of incompatibility with the New York Convention 1958, which can significantly affect foreign investors and international businesses operating in the country. One principal area of divergence lies in the grounds for non-recognition of foreign arbitral awards. The New York Convention stipulates specific grounds under which a member state may refuse recognition, such as public policy violations or invalid arbitration agreements. However, Vietnam’s national laws encompass broader and less defined criteria, potentially allowing for arbitrary rejection of foreign awards, thus undermining the predictability that the New York Convention intends to ensure.

Additionally, procedural inconsistencies become apparent when examining both legal frameworks. While the New York Convention emphasizes the need for simplified procedures in the enforcement of arbitral awards, Vietnamese law tends to impose more cumbersome requirements on parties wishing to seek enforcement. For instance, the necessity to provide extensive documentation can lead to delays and complications, further deterring foreign investors who wish to resolve disputes efficiently through arbitration.

Moreover, the limitations imposed by Vietnamese legislation on the enforceability of foreign arbitral awards further heighten the incompatibility. Specific articles in the Vietnamese Arbitration Law may limit the enforcement of awards rendered in arbitration outside of Vietnam, creating a restrictive environment for international arbitration. This not only leads to uncertainty but also diminishes Vietnam’s attractiveness as a destination for foreign investment.

In light of these discrepancies, foreign investors may encounter legal uncertainties, which can adversely affect their decisions and confidence in Vietnam’s legal landscape. Addressing these incompatibilities is imperative for Vietnam to align its arbitration practices with international standards, thereby fostering a more investment-friendly atmosphere.

Recommendations for Harmonizing Vietnam’s Legislation with International Practices

To align Vietnam’s arbitration laws with the New York Convention 1958 and international best practices, several actionable recommendations should be considered. Firstly, a comprehensive review of existing legislation is necessary. This review should focus on identifying provisions that may conflict with international arbitration standards. By amending such provisions, Vietnam can ensure compliance with the principles established by the New York Convention, which, in turn, enhances the recognition and enforcement of foreign arbitral awards within its jurisdiction.

Secondly, the establishment of specialized arbitration institutions is crucial. These institutions should be equipped with the necessary resources to oversee arbitration processes effectively. Furthermore, they should adhere to international standards while providing a fair and transparent environment for dispute resolution. Institutional changes would not only bolster confidence among foreign investors but also encourage domestic stakeholders to utilize arbitration more frequently as a means of resolving disputes.

Another pivotal aspect involves enhancing training programs for legal practitioners specializing in arbitration. Continuous professional development in the field of arbitration is essential for lawyers, judges, and arbitrators to remain updated on the latest international practices and tribunal procedures. Implementing workshops, seminars, and certification programs led by experienced international arbitrators can greatly contribute to raising the proficiency of Vietnamese professionals, ensuring they can competently handle complex arbitration cases.

Additionally, fostering collaboration between Vietnamese arbitration institutions and their international counterparts can lead to experience-sharing and knowledge exchange. By participating in international arbitration forums and networks, Vietnam can gain insights into best practices and innovations in arbitration, helping to create a more competitive and reliable arbitration landscape.

These recommendations collectively contribute to the overall goal of promoting a robust arbitration environment in Vietnam, ultimately aligning with international standards and enhancing the country’s attractiveness to foreign investors seeking a reliable mechanism for dispute resolution.

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Nguồn: “Incompatibility of Vietnam’s Legislation with the New York Convention 1958 and International Practices on Non-Recognition of Foreign Arbitral Awards”

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Tác giả: Lê Minh Trang

Trên đây là nội dung bài viết Incompatibility of Vietnam’s Legislation with the New York Convention 1958 and International Practices on Non-Recognition of Foreign Arbitral AwardsLDM (Legal de Minimis) chia sẻ đến bạn đọc. LDM được thành lập vào năm 2021 với mục tiêu cống hiến cho công cuộc giáo dục pháp lý của nước nhà. Cùng đội ngũ những luật gia trẻ và tràn đầy nhiệt huyết, LDM nỗ lực từng ngày để trở thành người dẫn đường và đồng hành cùng các thế hệ sinh viên theo đuổi đam mê với nghề Luật. Chúng tôi tự hào là một trong những tổ chức tiên phong về giáo dục, định hướng, kết nối và xây dựng một diễn đàn về học và hành nghề Luật tại Việt Nam. Với phương châm “Cuộc hành trình vĩ đại nào cũng bắt đầu từ những bước chân nhỏ nhất”, LDM mong rằng sẽ góp phần tạo nên nhiều hành trình ý nghĩa cùng thế hệ luật sư hiện tại và tương lai.

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