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Legal Update

Commercial Arbitration Developments in Vietnam

19 September 2011
Mayer Brown JSM Legal Update

On 28 July 2011 the Vietnamese Government issued Decree No. 63/2011/ND-CP (Decree 63) guiding the implementation of certain provisions of Law 54-2010-QH12 on Commercial Arbitration, in particular providing further details on procedural and administrative matters relating to the establishment, operation and termination of arbitration centres (including foreign arbitration centres). Decree 63 also contains some guidance on the enforcement of injunctions issued by arbitration tribunals.

Scope of Decree 63

Decree 63 provides detailed regulations regarding:

  • the powers and functions of the State bodies responsible for the administration of commercial arbitration and licensing of arbitration centres;
  • procedures for the licensing of arbitration centres (including documents required to be submitted, contents of the charter, rules regarding the choice of name and timescale of the application) and grounds for the compulsory termination of the arbitration centre and procedures to be followed in the event of voluntary termination;
  • procedures for the licensing of branches and representative offices of foreign arbitration centres in Vietnam and grounds for the compulsory termination of the arbitration centre and procedures to be followed in the event of voluntary termination; and
  • provisions for the enforcement of injunctions issued by arbitration tribunals.

The key provisions of Decree 63 are presented below.

Licensing of Vietnamese arbitration centres

The licensing of an arbitration centre (including any branch or representative office) is a two step procedure requiring firstly an establishment licence issued by the Ministry of Justice, and secondly an operation certificate issued by the Department of Justice in the locality where the arbitration centre has its headquarters. An arbitration centre may commence operations only from the date of issuance of its certificate of operation. Details relating to the application for an establishment licence are contained in the Law on Commercial Arbitration with further details added in Decree 63 relating to the contents of the charter. Decree 63 also provides details of the application process for an operational certificate, including the documents that must be submitted and the time-frame of the application.

Licensing of foreign arbitration centres in Vietnam

Foreign arbitration centres which are legally operating in their country of origin are permitted to operate in Vietnam in the form of either a branch or representative office. A branch is permitted to conduct arbitration activities in Vietnam, whilst a representative office may seek out and promote opportunities for its parent arbitration centre but may not itself carry out arbitration activities.

Decree 63 sets out details of the licensing procedures and provides that a foreign arbitration centre must obtain an establishment certificate from the Ministry of Justice for the establishment of a branch or representative office. In the case of the establishment of a branch, an operation certificate must be applied for after issuance of the establishment certificate. Decree 63 provides details of the application file and the documents required to be submitted.

Withdrawal of establishment licence and certificate of operation

The establishment licence and certificate of operation of a Vietnamese arbitration centre will be revoked in the following circumstances:

  • if, after the imposition of an administrative penalty, the arbitration centre commits a repeat offence;
  • the arbitration centre fails to conduct any of the activities stipulated in its charter or establishment licence for a period of five years from the date of the establishment licence;
  • the arbitration centre fails to apply for a certificate of operation with the local Department of Justice within 30 days from receipt of its establishment licence; or
  • the arbitration centre has failed to amend its charter and/or procedural rules by 31 December 2011 to ensure they are compliant with the Law on Commercial Arbitration.

In the case of a foreign arbitration centre, the establishment licence (in the case of a branch or representative office) or certificate of operation (in the case of a branch only) may be revoked in the event of the first two circumstances listed above.

Names and logos of arbitration centres

An arbitration centre's name must be in Vietnamese and include the words "Arbitration Centre". If an arbitration centre wishes to use a foreign name it must use the direct Vietnamese translation. The name must not be the same as, or cause confusion with, the name of an existing arbitration centre and must not breach the historical, cultural and ethical traditions and customs of Vietnam.

An arbitration centre may use a logo but must not use the national flag, Party flag, national emblem, images of leaders or of the currency of Vietnam in its logo.

Enforcement of injunctions issued by arbitration tribunals

Decree 63 confirms that injunctions issued by arbitration tribunals (including decisions amending, supplementing or rescinding an injunction) shall be enforced in line with the law applicable to the enforcement of civil judgments and injunctions issued by the Court.

Transitional provision

Arbitration centres established prior to 1 January 2011 (the effective date of the Law on Commercial Arbitration) must amend and/or supplement their charters and procedural rules by 31 December 2011 to ensure they are compliant with the Law on Commercial Arbitration.

Effectiveness

Decree 63 takes effect on 20 September 2011 and replaces Decree No. 25/2004/ND-CP dated 15 January 2004.


For inquiries related to this Legal Update, please contact Mai Phuong Nguyen and Kevin B. Hawkins or your usual contacts with our firm.

Learn more about our Vietnam offices and Litigation & Dispute Resolution practice.

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