What is international commercial arbitration?

International commercial arbitration is a method of resolving disputes arising from international judicial relations, especially international commercial relations that the law allows to be resolved by arbitration. According to this method, the parties agree to submit the dispute to a certain arbitration agency.

What is an arbitration agreement?

The arbitrator has no automatic authority but can only resolve disputes when the parties have relevant rights and obligations in their agreement. When the parties establish an arbitration agreement, they have given the authority to resolve the dispute to the arbitrator and the court has no authority to resolve that dispute unless the arbitration agreement is invalid or canceled by the arbitrator. the parties themselves. Thus, the arbitrator’s authority is established on the basis of the arbitration agreement.

The UNCITRAL Model Law on International Commercial Arbitration 1985 defines arbitration agreements in Clause 1, Article 7 as follows: “1. “Arbitration agreement” is an agreement by which the parties submit to arbitration any or certain disputes that have arisen or may arise between the parties regarding a defined legal relationship, whether contractual or not. is a contractual relationship. The arbitration agreement may be in the form of an arbitration clause in the contract or in the form of a separate agreement.

From the above provisions, it can be seen that the arbitration agreement is the agreement of the parties to resolve disputes arising from the contract or outside the contract by arbitration. This agreement may be made before or after a dispute arises and may take the form of a clause in a contract or a separate arbitration agreement.

Or the 1961 European Convention on International Commercial Arbitration provides a similar definition: “Arbitration agreement is an arbitration clause in a contract or arbitration agreement, the contract or arbitration agreement is concluded between the parties, or exchanged by letters, telegrams, or other forms of electronic communication, and in relations between countries whose law does not require that an arbitration agreement be made in writing, any arbitration agreement must be signed in the form prescribed by the laws of these countries.”

Consider the Vietnam Commercial Arbitration Law 2010 in Clause 2, Article 3, which states: “Arbitration agreement is an agreement between the parties on the settlement by arbitration of disputes that may arise or have arisen.”

This is a relatively simple and general definition, from here it can be simply understood: an arbitration agreement is an agreement between the parties on a method of resolving disputes, which can be before or after the dispute. dispute occurs.

Meaning of arbitration agreement

First, the arbitration agreement is the basis for disputes to be resolved by arbitration. Agreement between the parties is a prerequisite to give rise to arbitration jurisdiction.

Second, the arbitration agreement allows for the exclusion of the Court’s discretion. Vietnamese law as well as many legal systems around the world recognize the principle that when the parties have a legal arbitration agreement, the Court does not have jurisdiction to adjudicate and this authority belongs to the arbitrator chosen by the parties. select.

Third, freely agreeing to choose elements in the process of resolving disputes by arbitration forms the best conditions for conducting arbitration activities and facilitating the enforcement of arbitral awards.

Fourth, the arbitration agreement is the key point in determining the jurisdiction of the arbitrator because without an arbitration agreement, there cannot be dispute resolution by arbitration.

Equality between the rights and obligations of the parties in the Arbitration agreement

In arbitration proceedings, the parties are guaranteed equality in rights and obligations. First, the parties can agree to choose any arbitration center or establish their own Arbitration Council. to resolve their disputes. Once the form of arbitration has been chosen, the parties have the right to appoint an arbitrator they trust and at the same time the parties can also agree on the time to resolve the dispute, that is, the parties decide when to hold the arbitration. dispute resolution meeting. The Arbitration Council must respect the agreement of the parties. Only when there is no agreement between the parties on the time to hold the meeting will the Chairman of the Arbitration Council have the right to decide. Usually, when the Arbitration Council believes that the information and grounds related to the dispute have been collected sufficiently to warrant a decision, the meeting will be opened. The opening of the trial will be conducted at a location chosen by the parties.

In addition, the parties are also allowed to agree on the language used in arbitration proceedings. This content represents the right to be heard and the right to present of the participating parties. The language used must be consistent with the thinking and perception of the parties about the issue being debated. Lack of this means that a party or parties have been deprived of the right to be heard and presented.

Vietnamese law does not allow parties to freely choose the law applicable to disputes. The law regulates the rights of the parties on the basis of a distinction between domestic disputes and disputes with foreign elements: For disputes between Vietnamese parties, the Arbitration Council applies substantive law. and Vietnamese formal law to resolve disputes. The choice of foreign law by the parties will not be accepted by the Arbitral Tribunal. This provision is a limitation compared to the arbitration provisions of many countries’ laws. However, this regulation is considered suitable for current Vietnamese conditions.

For disputes with foreign elements, the Arbitration Council applies the law chosen by the parties. The choice of foreign law must not be contrary to the basic principles of Vietnamese law. In case the parties cannot choose a law to resolve the dispute, the Arbitration Council will decide.

In addition, the law also limits the freedom to choose the law on arbitration proceedings of disputing parties who are Vietnamese organizations and individuals. The parties have the right to choose an arbitration center or an arbitration council established by the parties to resolve disputes according to regulations on arbitration proceedings. Thus, in all cases, arbitration conducted within the territory of Vietnam must comply with the provisions of law. Therefore, it can be affirmed that this regulation has limited the freedom to choose arbitration procedures compared to many countries in the world.

Court Support for Arbitration Agreements

In the market economy, business disputes are taking place on an increasing trend, the content of the disputes is complex, and the severity of the disputes requires timely resolution, in order to protect the interests of customers. litigants; At the same time, this is also the responsibility of state agencies and jurisdictional agencies to resolve business and commercial disputes. Currently in Vietnam there are two judicial agencies to resolve commercial business disputes: the People’s Court system and the Commercial Arbitration system. Courts and Commercial Arbitration are the methods of resolution. Resolving trade disputes complements each other. The actual operation of Commercial Arbitration Centers requires the coordination of the Court. The Court’s role in the activities of Commercial Arbitration Centers covers the following four issues:

• Appointment of Arbitrators;
• Change of Arbitrator;
• Apply, change or cancel temporary emergency measures;
• Cancel the arbitration award.

As for changing Arbitrators, the Court only supports changing Arbitrators in cases where the remaining members of the Arbitral Tribunal cannot decide or if the Arbitrators or Sole Arbitrator from refuse to resolve the dispute. Consider complaints and resolve complaints about the Arbitration Council’s decisions on jurisdiction. In case of disagreement with the decision of the Arbitration Council regarding jurisdiction, one or both parties have the right to appeal this decision to the Court. In case the Court decides that the dispute does not fall under the jurisdiction of the Arbitration Council, the parties involved have the right to sue to a competent Court according to general procedures.

Regarding summoning witnesses, the Arbitration Council has the right to summon witnesses to the meeting. If the witness does not come, the Arbitration Council has the right to request the competent Court to summon the witness to the meeting according to the provisions of the Civil Procedure Code.

Regarding the procedure for applying temporary emergency measures, the Arbitral Council has the right to apply temporary emergency measures when one or more parties request it. However, it should be noted that the Arbitral Tribunal only has the power to decide to apply some of the listed interim measures The Arbitral Tribunal can only decide to apply interim emergency measures after The Arbitration Council has been established. Other cases are carried out by the Court

Therefore, when requesting the application of temporary emergency measures, parties should take care to submit the request to the correct competent authority. In fact, the Commercial Arbitration Law has foreseen and delineated the scope of authority to apply temporary emergency measures between the Arbitration Council and the Court to avoid conflicts of authority, but still ensure the principle of emergency measures. In all cases, the parties can apply for temporary emergency measures to protect their legitimate rights and interests. The principle of the Law is that if the Arbitral Council has applied a temporary emergency measure, the Court will refuse, except in cases where the contents do not fall within the jurisdiction of the Arbitral Council. If the Court has applied an interim emergency measure, the Arbitral Tribunal must refuse.

Registering the ad hoc arbitration award, the Court where the ad hoc arbitration council resolves the dispute is responsible for registering the ad hoc arbitration award upon request of one or more disputing parties.

Cancellation of an arbitration award, the Court where the Arbitration Council issued the award has the authority to consider and cancel the arbitration award according to regulations when requested by one or more disputing parties.

Under the conditions of a market economy, economic disputes are a normative attribute. Therefore, it is necessary to have competent jurisdictions to resolve increasingly complex and increasingly complex business and commercial disputes.

Along with the maturity of economic courts in the People’s Court system, commercial arbitration centers are also developing. With Arbitrators with extensive professional experience and leading experts in the industry, we believe that the Vietnam International Arbitration Center in particular and the system of commercial arbitration centers in general will continuously grow. meet the new requirements of the country.

With the authority function of being a judicial agency on behalf of the State, the Court will coordinate with commercial arbitration centers to ensure the resolution of commercial business disputes according to the authority prescribed by law.

Content of international commercial arbitration agreement

To resolve disputes by arbitration, the arbitration agreement must contain specific agreements on dispute resolution. To be considered an arbitration agreement, the parties’ agreement must include the content of assigning dispute resolution to arbitration. An arbitration agreement is the parties’ agreement to use arbitration as one of the forms of dispute resolution or to choose arbitration for resolution. Thus, the arbitration agreement does not necessarily specify the specific form of arbitration, organization or arbitration center.

The content of the arbitration agreement refers to determining the order, procedures, authority and responsibilities of the parties involved when needing to resolve disputes or disagreements arising or related to the main contract. International law and national law often stipulate a number of basic terms for arbitration agreements such as form of arbitration, language of arbitration, etc. In addition to these terms, the parties can establish additional terms. a number of other provisions depending on their interests to create favorable conditions for later dispute resolution. Unlike legal relationships in which procedural law is highly influenced by state power, in the field of arbitration, the arbitrator depends on the choice of the parties, this is the content of the agreement between the parties. parties to an arbitration clause is also the difference between an arbitration agreement and a petition.

Most countries’ laws simply stipulate that the arbitration clause must represent an agreement to submit disputes to arbitration without detailing the specific content of the arbitration agreement. That is for the parties to decide for themselves, showing respect for the parties’ agreement so that the agreement is consistent with the provisions of that country’s law.

The international commercial arbitration agreement is invalid

Since the beginning of the twentieth century, the 1927 Geneva Convention (Article 1.2.a) has stipulated that the validity of the arbitration agreement (according to the law applicable to the arbitration agreement) has been considered one of the necessary grounds. to recognize and enforce arbitral awards. Therefore, determining whether the arbitration agreement is valid or invalid is extremely important. An invalid arbitration agreement is a case where the parties agree to resolve disputes by arbitration but that agreement is not recognized as valid. When the arbitration agreement is invalidated, it will result in the case not being resolved in arbitration. International law does not have specific provisions on cases where arbitration agreements are invalid. However, it can be seen that the arbitration agreement is invalid when it does not meet the conditions for the arbitration agreement to be effective, specifically as follows:

Regarding subject capacity: Article VI.2 of the 1961 Geneva Convention stipulates that: “The capacity of the subjects participating in the arbitration agreement is determined according to the law that the parties have chosen to apply the arbitration agreement. , if there is no general choice on this issue, the law of the place where the arbitral award was pronounced shall apply, or if the place of arbitration cannot be determined, the law specified by the conflict of laws rules which applied by the Court of Justice”. However, for each type of subject, the legal content regulating this issue has different regulations, suitable to the characteristics and nature of each type of relationship. In Vietnam, regulations on subject capacity are stipulated in the Civil Code and a number of other specialized documents.

Regarding the authority of the arbitrator: The authority of the arbitrator is to consider whether the subject of the dispute can be resolved by arbitration or not, in other words whether the dispute falls under the jurisdiction of the arbitrator or not. According to the Vietnam Commercial Arbitration Law, the jurisdiction of the arbitrator is determined in cases of disputes between parties arising from commercial activities, disputes arising between parties in which at least one party has active activities. Commercial and other disputes between the parties that are required by law to be resolved by arbitration.

Regarding the form of the arbitration agreement: The laws of most countries and international law on arbitration require that the terms of the arbitration agreement be made in writing. However, legal practice also has exceptions, for example, the 1961 Geneva Convention in Article I.2.a allows arbitration agreements to be signed in oral form if countries do not require written form. . However, it is necessary to determine which countries these are. On the other hand, only when an oral agreement is explained in accordance with the actual situation described, in a way that is not embarrassing and must be agreed upon by the plenipotentiary representatives of each party, will there be sufficient grounds. for workers to negotiate this arbitration.

The form of the arbitration agreement is a document and the popular view of countries today is to widely recognize many forms of “documents” recording the will of the parties. This is specifically recognized in Article 7 of the UNCITRAL Model Law or the 1958 New York Convention. Vietnamese law specifically regulates cases of invalid arbitration agreements in Article 18 of the 2010 Commercial Arbitration Law. Accordingly, The spirit of international law remains the same and there are additional cases where the content of the arbitration agreement violates legal prohibitions and the parties are deceived and threatened with coercion during the process of establishing the agreement. favorable. Such a regulation is completely reasonable and concretizes the Model Law in accordance with Vietnamese law.

Thus, the arbitration agreement is considered a key issue and plays a decisive role in the application of dispute resolution by arbitration. With the main content being the parties’ agreement on procedural law and laying the foundation for the formation and implementation of the entire arbitration process, therefore, the effectiveness of arbitration proceedings depends largely on into the content of the arbitration agreement.