On 13 December 2010, the Vietnamese Ministry of Industry and Trade (MOIT) released Circular No. 40/2010/TT-BCT regulating the sequence and procedures for resolution of disputes in the electricity market (Circular 40).
The dispute resolution body is the Electricity Regulatory Authority of Vietnam (ERAV), a department under the MOIT.
Circular 40 presents a process whereby disputes will be resolved outside of the courts. However, for cases where either party does not agree with the decision on resolution of a dispute relating to a power purchase and sale contract and a contract for provision of auxiliary services, such party has the right to initiate legal proceedings at the court for resolution in accordance with the law.
Scope and applicability
The following disputes fall within the governing scope of Circular 40:
- Disputes relating to power purchase and sale contracts and contracts for provision of auxiliary services between power entities, except for those contracts which have foreign elements
- Other disputes in the activities of electricity generation, electricity transmission, electricity distribution, electricity wholesaling and retailing, electric system regulation and electricity market transaction administration
Circular 40 applies to the following entities:
- Electricity transmission entities
- Organisations and/or individuals whose legitimate rights and interests are violated by electricity entities
- ERAV as the dispute resolution body
Disputes must be settled pursuant to the following principles:
- Dispute resolution must comply with the sequence and procedures stipulated in Circular 40 and the provisions in the relevant laws
- For disputes relating to power purchase and sale contracts or contracts for provision of auxiliary services, dispute resolution must be based on the contents of such contracts
- For disputes relating to electricity activity permits, dispute resolution must be based on the contents of such permits
The statute of limitations for settling disputes is one year, counting from the date a party holds that its legitimate rights and interests are violated, except for force majeure cases. When a dispute arises in the electricity market, the disputing parties must negotiate to settle the dispute by themselves within 60 days. If the parties fail to settle the dispute within such 60 days, one or both parties have the right to bring the case to the ERAV for resolution pursuant to the sequence and procedures stipulated in Circular 40.
The process of dispute resolution by the ERAV comprises four steps:
- Acceptance of dossier requesting dispute resolution
Within five working days from receipt of a dossier requesting dispute resolution, the ERAV must check the regularity of the dossier and notify the claimant of such receipt in writing. If the dossier is not regular, the claimant must supplement its dossier within 15 working days from receipt of such written notification from the ERAV. The respondent may lodge a statement of counterclaim against the claimant.
- Examination and verification of the case
Within two working days from receipt of a regular dossier, the Director of the ERAV must nominate a dispute resolution officer (DRO). Within five working days from receipt of the dossier, the ERAV must send to the respondent a written notice of the dispute and a copy of the claimant's petition for dispute resolution with attached documents. The duration for examination and verification is three months and may be up to six months for complicated cases, counting from the date of receipt of a full regular dossier.
- Opening of dispute resolution session
Within 30 days from the end of the examination and verification period, a dispute resolution session must be held in which the disputants put forward their views and present their documentation and evidence. Witnesses, experts and representatives of organisations or individuals having related rights and obligations may attend to present their opinions. The chairman of the session will make a conclusion on dispute resolution on the basis of opinions expressed during the session and the materials and evidence collected and the reports on examination and verification of the dispute. Minutes of the dispute resolution session must be made in writing and bearing the signatures of the chairman, the clerk of the session, the claimant and the respondent.
- Issuance of decision on dispute resolution
Within five working days from the date of termination of the session, the director of the ERAV must issue a decision on dispute resolution. This decision is final and effective as from the date it is signed and must be sent to the claimant and the respondent within five working days from the signing date.
The losing party must bear expenses for the dispute resolution, unless otherwise agreed by both parties. Such expenses include travelling expenses and other relevant expenses for the officer in charge of the dispute as stipulated by law, expenses for hiring experts and remunerations for the members attending the dispute resolution session.
The ERAV must suspend resolution of a dispute in the following cases:
- The claimant withdraws its petition for dispute resolution
- The claimant is still absent though having been invited to the dispute resolution session for a second time or leaves the dispute resolution session without consent from the chairman of the session
- The parties agree to terminate resolution of the dispute
- The dispute has signs of law violation and one or both parties bring the dispute to another competent body for resolution
If a dispute resolution is suspended, the ERAV must notify the parties of such suspension in writing and explain clearly the reasons for the suspension.
Circular 40 will take effect as from 27 January 2011.
For inquiries related to this Legal Update, please contact:
Dao Nguyen (firstname.lastname@example.org)
Thinh Dan (email@example.com)