International commercial arbitration an (1)

Chapter 7: Procedure and Evidence Please identify any cases, laws, official interpretations of laws, books, articles, published notes, commentaries or other authoritative sources from your jurisdiction that you would consider as a necessary inclusion in this Chapter, including laws on confidentiality, court/tribunal powers to order interim measures or make adverse inferences and court assistance in document production or witness testimony, etc For any identified cases, please provide a short paragraph on the issue(s) relevant to this i) Chapter Legislation The Civil Procedure Code of Vietnam (the “CPC”) The Law on Commercial Arbitration 2010 (“LCA”) The Ordinance on Commercial Arbitration 2003 (“OCA”) The Resolution 01/2014 of the Supreme People’s Court providing guidance on the Law on Commercial Arbitration (“the Resolution” or “Resolution 01/2014”) ii) Institutional Rules The Arbitration Rules of the Vietnam International Arbitration Centre which comes into force as from 01 January 2012 (“VIAC Rules”) iii) Cases Wisdom Lines v Hao Hung [2012] People’s Court of Ho Chi Minh City Hao Hung, the respondent in an ex parte maritime arbitration, request for refusal of recognition and enforcement of the arbitral award based on purported invalid service of arbitral notices by the ad hoc tribunal The Court in accepting Hao Hung’s request found that the arbitral notices were all served to Ms Kieu Tram, a staff of Hao Hung Since Ms Kieu Tram lacked the authority to represent Hao Hung, the service of arbitral notices was held to be invalid and the petition for recognition and enforcement of Wisdom Lines were dismissed ACL II v Shanghai Zhong Jing [2009] Decision 2611/2009/QDST-KDTM of People’s Court of Ho Chi Minh City In 2005, Shanghai Zhong Jing (“SZL”) concluded a sales contract with ACL II and Cuong Thinh Phat Once the dispute occurred, SZL commenced arbitration against ACL II The VIAC Tribunal decided in favor of SZL in a process conducted without the participation of Cuong Thinh Phat as third party, which was later held by the Court as a violation of the Civil Procedure Code! The Court in setting aside the arbitral award also accepting ACL II’s arguments that Mr Thu, its signatory, was only Vice Director thus lacked the capacity to sign the contract and the arbitration agreement therein Summit Prakasa Asia Pte., Ltd v Agrimex Nghe An., JSC [2006] Decision 04/2006/QĐ of Appellate Court – Supreme People’s Court in Hanoi Summit, the losing party in the VIAC Arbitration, requested the Court to set aside the arbitral award based on violation of due process in arbitral proceedings Summit contended that the Arbitral Tribunal had used Vietnamese in the ex parte Hearing, while the arbitration agreement clearly stated that the language of the arbitration shall be English The Appellate Court – Supreme People’s in Hanoi found that even though the Tribunal had consulted with the parties in the Hearing on the change in the langue of arbitration, Summit did not have the chance to state its opinion Furthermore, the Tribunal had also wrongfully rejected Summit’s request for postponement of Hearing The Court therefore decided to set aside the arbitral award After that, Agrimex, the award creditor, re-litigated the dispute in People’s Court of Hanoi with the final decision was still in Agrimex’s favor Dai Phuc v Salzgitter [2006] Decision 27/2006/QDKDTM-ST of People’s Court of Ho Chi Minh City Dai Phuc as the default party applied to set aside the VIAC Arbitral Award based on purported procedural irregularity According to Dai Phuc, the translator appointed by VIAC for Dai Phuc failed to translate the developments of the Hearing properly, which seriously prevented Dai Phuc from presenting its case In dismissing such application, the Court held that (i) the claim was unfounded and (ii) Dai Phuc admitted that the award was not within the grounds for setting aside arbitral award under Article 54 OCA which were proven by the Court to be exclusive Trang Tien v Teagu [2004] Decision 01/QĐKT People’s Court of Hanoi Trang Tien applied for setting aside of the Arbitral Award resolving the disputes between Trang Tien and its contractual partner, Woolim Corporation based on two grounds: (i) Teagu was not validly authorized by Woolim to commence arbitration against Trang Tien and (ii) unknown arbitration institution named in the arbitration agreement The Court dismissed the former as it was not one of the exclusive grounds for setting aside awards, but accepted the latter under finding that the arbitration agreement was null and void under Article 10.4 of the OCA The Court further remarked that the contract was actually concluded between Woolim and Hanafood – an entity authorized by Trang Tien Therefore, Trang Tien was wrongfully identified as Respondent by the VIAC, while it should have been considered only as a third-party! iv) Books Tran Hoang Hai, Do Van Dai, Collection of judgments, decisions of Vietnamese Courts on commercial arbitration, Lao Động Publisher, 2010 Tran Hoang Hai, Do Van Dai, Vietnamese law on commercial arbitration, National Political Publishing House, 2011 Nguyen Trung Tin, Commercial Disputes Resolution with foreign elements, Publisher of Social Science, 2009 v) Articles Nguyen Vu Hoang, “Select and appoint arbitrators in international trade dispute resolution”, Journal of Commerce, 2001 Do Van Dai, “Setting Aside Arbitral Award in Vietnam”, Conference Paper, VIAC Conference on Setting Aside and Refusal of Recognition and Enforcement of Arbitral Award in October 2013 Do Van Dai, “Power of Vietnamese Court over Foreign Arbitration seated in Vietnam”, Democracy and Law Journal No 11/2012; Nguyen Vu Hoang, “Principles of Arbitration in Commercial Arbitration Law 2010”, Democracy and Law Journal, 2010 Conference Papers, Conference for Commentaries on Draft Law on Commercial Arbitration, November 2011 Conference Papers, Conference for Commentaries on Draft Resolution of the Council of Judges – Supreme People’s Court to provide guidance on certain provisions of the Law on Commercial Arbitration, May 2013 Please indentify and quote any rules of arbitral institutions (referred to above in question for Chapter 1) that relate to the subject matter of this Chapter Article 16 Power of the Arbitral Tribunal to verify facts The Arbitral Tribunal shall have the power to meet or discuss with one party with the participation of the other party by appropriate means in order to clarify the issues relevant to the dispute The Arbitral Tribunal may, on its own initiative or at the request of a party or the parties, conduct fact-finding from a third person in the presence of the parties or after having notified the parties Article 17 Power of the Arbitral Tribunal to collect evidence The Arbitral Tribunal shall have the power to request the parties to provide evidence, and the parties shall be obliged to provide evidence The Arbitral Tribunal shall have the power, at the request of a party or the parties, to request witnesses to provide information and documents relevant to the dispute The Arbitral Tribunal shall have the power, on its own initiative or at the request of a party or the parties, to seek inspection or valuation of the assets in dispute The expenses for inspection or valuation shall be paid by the requesting party or allocated by the Arbitral Tribunal In all circumstances, if the inspection or valuation expenses are not paid in full, the Arbitral Tribunal shall resolve the dispute on the basis of the documents readily available The Arbitral Tribunal shall have the power, on its own initiative or at the request of a party or the parties, to seek expert advice The Arbitral Tribunal shall have the power to request the parties to provide experts with the relevant information or access to the relevant documents, goods or assets The expert shall submit a written report to the Arbitral Tribunal After receiving the report, the Arbitral Tribunal shall send a copy of the report to the parties and request the parties to provide their written opinions on the report The expenses for expert advice shall be paid by the requesting party or allocated by the Arbitral Tribunal In all circumstances, if the expenses for expert advice are not paid in full, the Arbitral Tribunal shall resolve the dispute on the basis of the documents readily available If the Arbitral Tribunal or a party or the parties have already taken necessary measures to collect evidence without success, a written request may be submitted to the competent court to require support in accordance with the law Article 18 Power of the Arbitral Tribunal to summon witnesses The Arbitral Tribunal shall have the power, at the request of a party or the parties and if the Arbitral Tribunal considers it necessary, to summon witnesses to attend a hearing The witness expenses shall be paid by the requesting party or allocated by the Arbitral Tribunal If a witness who has been duly summoned by the Arbitral Tribunal fails to attend the hearing without a legitimate reason and if the absence of the witness causes an obstacle to the dispute resolution, the Arbitral Tribunal shall submit a written request to the competent court to issue a decision summoning the witness to attend the hearing The request shall specify the content of the dispute currently being resolved; the full name and the address of the witness; the reason why the witness needs to be summoned; and the time and the location where the witness is required to be present If a witness who has been duly summoned is absent, the Arbitral Tribunal may adjourn or proceed with the hearing on the basis of the documents readily available Article 19 Power of the Arbitral Tribunal to order interim measures The Arbitral Tribunal may, at the request of a party, order one or more interim measures applicable to the parties in dispute The interim measures shall comprise: a) Prohibition of any change in the status quo of the assets in dispute; b) Prohibition of any specific action by any party in dispute or order that any party in dispute take specific actions aimed at preventing conduct adverse to the arbitral proceedings; c) Seizure of the assets in dispute; d) Order of preservation, storage, sale or disposal of any of the assets of a party or the parties in dispute; dd) Order of provisional payment of money between the parties; e) Prohibition of transfer of asset rights with respect to the assets in dispute The procedures for ordering, changing, supplementing and terminating the interim measures shall be in accordance with the relevant provisions of the law During the arbitral proceedings, if a party has already requested a court to order one or more interim measures as provided in paragraph of this Article and then requests the Arbitral Tribunal to order such interim measures, the Arbitral Tribunal shall reject the request The party that has requested the court to order any interim measures shall immediately notify the Centre of the request A request for interim measures addressed by any party to a court shall not be deemed incompatible with the agreement to arbitrate, or as a waiver of that agreement Article 35 General provisions In all matters not expressly provided for in these Rules, the Centre and the Arbitral Tribunal shall act in the spirit of these Rules and make all efforts for the dispute to be resolved in a fair and efficient manner Are there any requirements or restrictions in your jurisdiction as to persons who may represent a party in an arbitration? If yes, please indicate whether those requirements apply to either domestic arbitrations or international arbitrations or both Parties have the right to authorize their representatives to attend dispute resolution sessions and such representatives can be any person provided that they have a power of attorney and the representative must have full civil act capacity A party’s authorized representative is not Art.55(2) LCA required to be a lawyer Any lawyer who wishes to represent a party in arbitration proceedings still need a separate POA directly issued by such a party What is the body that regulates lawyers in your jurisdiction (e.g., bar council or law society)? Does it have ethical rules or guidelines that bind its members in their conduct of arbitrations within or outside of your jurisdiction? If yes, please identify them The Vietnam Bar Federation is the central body that regulates lawyers in Vietnam, lawyers also regulated by the city bar association that they are members The National Council of Lawyers of the Vietnam Bar Federation has issued the Code of Ethics and Conducts for Lawyers in 2011 to regulate the ethical issues and professional conduct of Vietnamese lawyers In addition, each Bar may have its own Code of Ethics and Conducts for lawyers2 The Law on Lawyers of Vietnam promulgated in 2006 and amended in 2012 provides for the principles, conditions, scope and forms of professional practice by, as well as criteria, rights and obligations of, lawyers, law-practicing organizations and socio-professional organizations of lawyers; the management of law practice and professional practice by foreign law-practicing organizations and foreign lawyers in Vietnam.3 However, there is no specific provision that binds members of the Bar in their particular conduct of arbitrations within or outside of Vietnam Article 22 of LCA provides a national association of arbitrators which should regulates ethical issues but it has not been formed From your experience, how frequently are the IBA Rules of Evidence applied in your jurisdiction? Are they well respected? Based on our experience, the IBA Rules of Evidence is more appreciated as a referential source rather than as binding Rules in the arbitration The authors afraid that direct application of IBA Rules of Evidence, especially the remedies provided therein, may probably impinge on the enforceability of the arbitral award in the context of Vietnam As we explain in Chapter – Answer to Question 3, the alleged partiality is For example, please find the Code of Ethics and Conduct for Lawyers of Hanoi Bar available in Vietnamese at: http://luatsuhanoi.vn/index.php?page=productView&id=870 Article Law on Lawyers interpreted rather capriciously in some instances and may even be assumed from a seemingly unfair conduct of the Tribunal Under such circumstances, it would be daring for the Tribunal to draw adversarial effects from a party’s failure to produce evident, knowing that such course of action may easily be considered as bias in the eyes of the parties The same can be said as to disregarding of witness testimony or expert report because the witness or expert of one party cannot appear at the Hearing without plausible reasons Are there any local procedural particularities in the arbitral process in your jurisdiction that deviate significantly from generally accepted arbitral procedures? Significant deviations from generally accepted arbitral procedures in the LCA and Resolution 01/2014 may include: i Explicit Power of the Tribunal to Summon Witness Both Article 47 of the LCA and Article 11.3 of the Resolution 01/2014 expressly empower the Tribunal to summon witnesses It is understandable if the individual witnesses are within the control of the parties (for example corporate officers, directors, or senior employees of a party) However, there is no statutory restrictions as to who can be summoned as witness by the Tribunal, therefore the Tribunal may even summon individuals who are not within the control of one party (for example subcontractor, former directors etc.) Article 11.3 of the Resolution 01/2014 also provided that local courts shall assist the Tribunal in procuring the attendance of a reluctant witness, if inter alia such a witness is proven to be of decisive importance to the dispute resolution Such explicit power to summon witness of the Tribunal is a major departure from international practice where the Tribunal usually has no jurisdiction over third party One of the rare international counterparts of Article 47 is Section of Federal Arbitration Act of the US, which allows an arbitrator to issue a summons to order the attendance of a third party as a witness at the arbitral proceedings, and the court shall enforce such summon if necessary ii Waiver of rights to object See Alan Redfern/Martin Hunter/Nigel Blackaby/Constantine Partasides, Redfern and Hunter on International Arbitration (Oxford University Press 2009), ¶6.127; Gary Born, International Commercial Arbitration (Kluwer Law International 2009), p 1901 The provision concerning waiver of rights to object under Article 13 the LCA contains a rather significant deficiency: one party may be deemed as losing its rights to object certain irregularities if it does not so within the time-limit stipulated in the LCA Comparing to Article of the Model Law on the same issue, Article 13 undesirably omits an important phrase requires the party to state his objection “without undue delay” Furthermore, the LCA does not specify any time-limit for objection except for jurisdictional challenge which must be set forth at the same time of the Statement of Defense Article of the Resolution 01/2014 was drafted with intention to shed light on this issue though the guidance is still far from convincing Article sets down that when the LCA is silent on the matter, time limit to lodge an objection shall be in accordance with the arbitration rules and the agreement of the parties, or absent such rules and agreement, “any objection must be made before the render of an arbitral award” Nevertheless, the VIAC Rules has yet to set any time bar for procedural objection while to be realistic, it is hard to expect a party to reach a specific any agreement on that matter Accordingly, the LCA is still short of an obligation on the objecting party to lodge its objection immediately (i) it became aware of the violation or (ii) it could, with reasonable diligence, have become aware of it As provided in Article 13 LCA and Article of Resolution 01/2014, real problems will arise because the objecting party may find it tactically advantageous to delay lodging until the last moment, thereby causing potentially significant delay It could also be argued that the tribunal is not well-equipped to counter such “guerrilla tactics” as under both the LCA and the Resolution, the tribunal is not expressly entitled to set out a timelimit for parties to setting their objection(s) if any To the contrary, the prevailed position in international practice concerning waiver of rights to objection is that tribunal, not the Court, is the appropriate authority to interpret the reasonable time period within which the parties should put forth their challenges5 In addition to the limits to party autonomy referred to in this Chapter, are there additional limits found in your jurisdiction? There are seven limits to party autonomy referred to in Chapter namely (i) Parties’ failure to agree, (ii) Fundamental, mandatory due process principles (also known as natural justice UNCITRAL Digest on Article Model Law, ¶2-4 principles), (iii) Other mandatory procedural laws, (iv) Institutional requirements, (v) Third parties, (vi) Arbitral tribunal discretion, and (vii)The role of domestic courts In addition to the seven aforesaid limits, Article 4.1 LCA provides that party autonomy shall be respected if the agreement does not breach legal prohibitions and is not contrary to social morals Such limitations are not specific, at times interchangeable with the seven stated limits and should be interpreted on a case-by-case basis Is arb-med commonly practiced in your jurisdiction? Arb-Med is expressly provided for in both the LCA and the VIAC Rules Besides the rights to conduct negotiation and conciliation on their own, arbitrating parties are also entitled to request the arbitral tribunal to mediate their dispute at any time of the arbitral proceedings under Article of the LCA Article 58 of the LCA and Article 27 of the VIAC Rules also affirms that it is compulsory for the tribunal to conduct mediation if the parties so request If the mediation leads to positive outcome, the Tribunal shall render the Decision recognizing successful mediation which is of equivalent effect to an arbitral award From the authors’ experience, tribunals also frequently enquire whether the parties may wish for their dispute to be resolved by conciliation or mediation However, due to the private nature of arbitral proceedings, it is difficult to know exactly how common arb-med is in Vietnam The good news is that the project to promulgate the first ever Decree on Commercial Mediation in Vietnam is now under construction6; and hopefully certain efforts may be made for the drafting committee to have a grasp on the current practice of arb-med in dispute resolution in Vietnam Is there an implied duty of confidentiality in your jurisdiction? Yes, it is a basic principle in resolving dispute by arbitration that the arbitral proceedings shall be conducted in private manner unless the parties agree otherwise, and the duty of confidentiality is understood as an extension of the privacy of arbitral proceedings Implementing Decision 808/QD-TTg dated 29 June 2012 of the Prime Minister, the Ministry of Justice of Vietnam has established the Drafting Committee and Editorial Board in drafting the Decree on Commercial Mediation in May 2013 The news are available in Vietnamese on the website of the MOJ at: http://www.moj.gov.vn/bttp/News/Lists/TinTucSuKien/View_Detail.aspx?ItemID=208 Article 4.4 LCA Nevertheless, there are little to none courts’ decision or guidance as to the extent of the duty of confidentiality as well as how far the Parties should keep their arbitration in secret Unlike the Parties, Arbitrators, under Article 21.3 LCA, are expressly restricted from divulge any information related to the disputes 10 Are there rules in your jurisdiction that prevent third party funding of arbitration (e.g., an entity not involved in the dispute paying a party's legal fees (all or part) in return for a share of the eventual award)? There is no rule of that effect However it should be noted that there is no reported case of third party funding either as such practice of common law jurisdictions is not well-known in Vietnam  ... Courts on commercial arbitration, Lao Động Publisher, 2010 Tran Hoang Hai, Do Van Dai, Vietnamese law on commercial arbitration, National Political Publishing House, 2011 Nguyen Trung Tin, Commercial. .. Alan Redfern/Martin Hunter/Nigel Blackaby/Constantine Partasides, Redfern and Hunter on International Arbitration (Oxford University Press 2009), ¶6.127; Gary Born, International Commercial Arbitration. .. Nguyen Vu Hoang, “Principles of Arbitration in Commercial Arbitration Law 2010”, Democracy and Law Journal, 2010 Conference Papers, Conference for Commentaries on Draft Law on Commercial Arbitration,