(Luận văn thạc sĩ) arbitration med arb model international practice and applicability in viet nam

MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY ARB-MED-ARB MODEL: INTERNATIONAL PRACTICE AND APPLICABILITY IN VIETNAM Major: Economics h Specialization: International Trade Policy and Law Code: 8310106 Full Name: Le Hong Nhung Supervisor: Assoc Prof, Dr Nguyen Minh Hang, Ha Noi, 2019 STATEMENT OF ORGINAL AUTHORSHIP The master thesis “Arbitration-Med-Arb model: international practice and applicability in Viet Nam”, which was completed as a result of the course named Master of International Trade policy and Law, is the author‘s sole work with the best devotion, endeavor and hard-working period given The author guarantee that the master thesis have been carried out in conformity with the thesis writing regulation and process issued by the Foreign Trade University h ACKNOWLEDGEMENT This thesis is the result of six months of researching It is an interesting and learning experience In completing this thesis, the author would like to give my special thanks to many people for their significant help, contribution, and recommendations during my writing process Foremost, special mentions and the most sincere thanks should belong to Associate Prof Dr Nguyen Minh Hang, my supervisor at Foreign Trade University With her master knowledge and experiences, she helped me in writing this thesis I could not complete this thesis without her positive suggestions and guidance Secondly, I would also like to give my thanks to the authors who provided me with valuable books for my thesis My last appreciation is to the Faculty of Graduate Studies of Foreign Trade h University for organizing such a meaningful master course and all the support, my family and my friends for their supports and encouragements Hanoi, 15th January 2019 Le Hong Nhung TABLE OF CONTENTS STATEMENT OF ORGINAL AUTHORSHIP ACKNOWLEDGEMENT LIST OF FIGURES & TABLES LIST OF ABBREVIATION SUMMARY OF THESIS RESEARCH RESULT INTRODUCTION .1 Rationale Literature review Research questions 4 Research’s objective .5 Scope of study 6 Methodologies 7 Research disposition CHAPTER 1: THEORETICAL FRAMEWORK h 1.1 Alternative dispute resolutions .9 1.1.1 Background 1.1.2 Definition 11 1.1.3 Methods and forms of ADR 13 1.1.4 ADR and litigation .13 1.2 Mediation 16 1.2.1 Rationale of mediation 17 1.2.2 Definition and process 18 1.2.3 Stages of commercial mediation 20 1.2.4 Types of commercial mediation 23 1.2.5 International organization’s activities for commercial mediation 24 1.2.6 Advantages and disadvantages of commercial mediation 27 1.3 Arbitration 28 1.3.1 Rationale of arbitration .28 1.3.2 Definition and process 29 1.3.3 Stages of commercial arbitration 31 1.3.4 Arbitration agreement 33 1.3.5 Forms of commercial arbitration 34 1.3.6 Benefits and drawbacks of commercial arbitration 35 1.4 The key differences between mediation and arbitration 36 1.5 The understanding of arb-med-arb model 39 CHAPTER 2: INTERNATIONAL EXPERIENCE ON APPLYING ARBMED-ARB MODEL: STUDY OF SINGAPORE 42 2.1 Singapore’s development in mediation and arbitration 42 2.1.1 Singapore’s development in mediation .42 2.1.2 Singapore’s development in arbitration 45 2.2 Singapore's Arb-Med-Arb model .50 2.2.1 SIAC-SIMC Arb-Med-Arb Protocol 50 2.2.2 Procedure of Singapore’s Arb - Med - Arb model 52 2.2.3 Advantages of Arb - Med – Arb 55 h CHAPTER 3: APPLICABILITY OF AMA MODEL IN VIET NAM AND RECOMMENDATIONS 60 3.1 Vietnam’s approach on applying Arb – Med - Arb model 60 3.1.1 Vietnam economy review .60 3.1.2 Vietnam development in commercial mediation and arbitration 63 3.1.3 Arb-Med-Arb applicability in Viet Nam and issues 74 3.2 Recommendations for Viet Nam 79 3.2.1 For Government 79 3.2.2 For associations and enterprises 89 CONCLUSION 91 Conclusions 91 Limitation of research 92 REFERENCES 93 LIST OF FIGURES & TABLES Table 1.1: Comparing ADR and Court Procedure 16 Figure 1.1: Commercial mediation process 20 Table 2.1: Circumstances to use commercial mediation .27 Figure 2.1: Commercial arbitration process 31 Table 2.2: Comparison Between Arbitration & Mediation 38 Figure 3.1: Total Number of New Cases Handled by SIAC (2006-2016) 46 Firgue 3.2: Procedure of Singapore Arb-Med-Arb model 52 Table 3.1: Advantages of Mediation versus Arbitration .55 Figure 3.3: Advantages of Arb-Med-Arb .57 Figure 3.4: Newly established enterprises of May from 2014 – 2018 61 Figure 4.1: Viet Nam’s Arb-Med-Arb model (expected) 75 h LIST OF ABBREVIATION ADR Alternative Dispute Resolution AMA Arbitration-Mediation-Arbitration ARB-MED-ARB Arbitration-Mediation-Arbitration Community Mediation Centres FDI Foreign Direct Investment HKMAAL Hong Kong Mediation Accreditation Association Limited ICC International Chamber of Commerce PD Practice Direction on Mediation PDRC Primary Dispute Resolution Centre SMC Singapore Mediation Center SIAC Singapore International Arbitration Center SICC Singapore International Commercial Court SIMC Singapore International Mediation Center SIMI Singapore International Mediation Institute TRACENT Ho Chi Minh City Commercial Arbitration Center UN United Nations UNCITRAL United Nations Commission on International Trade Law VIAC Vietnam International Arbitration Center h CMC VMC Vietnam Mediation Center WB World Bank WTO World Trade Organization h SUMMARY OF THESIS RESEARCH RESULT The thesis ―Arb-Med-Arb model: international practice and applicability in Vietnam‖ focuses on giving recommendation on how Vietnam can apply the experiences of developed jurisdiction around the world, which in this study are Hong Kong, US, especialy Singapore in order to improve the country‘s commercial dispute resolution context In general, Vietnam‘s alternative dispute resolutions on commercial dispute in general is still limited In addition, the commercial mediation activities is scattered between arbitration center national wide without a uniform Mediation and Arbitration Act until the recent Decree No 22/ND-CP about commercial mediation that have been issued in April 2018 and Law on commercial arbitration issued in June 2010 Despite a remarkable movement, Vietnam regulation still possessed many drawback regarding the code of conduct for mediators and arbitrators The solutions which have been found in the study of the three developed dispute settlement hubs of the world shall help to attract the interest of Vietnam enterprises on using multitiered-clause Arbitration - Mediation - h Arbitration to sellte disputes, improving the standard and conduct of mediator and arbitrator, fortify the enforceability of the mediation settled agreement and arbitration award INTRODUCTION Rationale An era of connection and cooperation is the way people usually call the 21st century An outburst of a smartphone or high-tech computer for instance would imply that its parts are collected and produced in different countries These components are then assembled into the final product and distributed over the world That is international trade at its absolute finest Powering such international trade are complex technologies which have reduced the obstacles for global advertising, near-instant global communication, prompt product and services delivery In conclusion, the term ―globalism‖ has been reconceptualized by technology There are however features of globalism where technology cannot assist (at least not yet) Since the characteristics of international businesses, the contracts signed between the sides are generally quite sophisticated, consisting of a expansive h heavily negotiated clauses regarding to each party‘s commercial requirements In addition to trade terms, parties‘ awareness of the need to have a well-written dispute settlement clause are increasing Go along with the development of technology, the mechanisms for resolving dispute have not stayed immovable and have gradual developed to dedicate to globalism as much as achievable In this field, arbitration has been found an ideal substitute to the traditional court procedures Generally, arbitrations are supposed more efficient and flexible than courts, while the parties are offered confidentiality The enforcement is another enormous advantage of arbitration In particular, an arbitration awards are more readily enforceable than judgment from foreign court The question that people are finding the key is: are we on the top of the progression for dispute settlement clauses? Can arbitration clauses (or any substitute dispute resolution clauses) still be refined? The Singapore International Arbitration Centre (SIAC) and Singapore International Mediation Centre (SIMC) assuredly realize that fact Altogether, the SIAC and SIMC have requested to bring 100 54 Holman Fenwick Willan office,The best of both worlds in alternative dispute resolution: Singapore‘s arb-med-arb protocol, june 2015 http://www.hfw.com/Singapores-Arb-Med-Arb-protocol-June-2015 55 Indranee Rajah, 2016, Enhancing the International enforceability of Singapore judgment, Legal Group, available at: https://www.mlaw.gov.sg/content/dam/minlaw/corp/News/Choice%20of%2 0Court%20Agreements%20Act%202016.pdf [Accessed on 17/12/2018] 56 ICC, 2018, What is mediation?, ICC, available at: https://iccwbo.org/disputeresolution-services/mediation/ [Accessed on 20/11/2018] 57 JMHL, 2012, Hong Kong Mediation Code, JHML, available at: http://www.jointmediationhelpline.org.hk/pdf/pdf4.pdf [Accessed on 23/12/2018] 58 Justice Judith Prakash, 2009, Making the Civil Litigation System more efficient, Asia 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http://heinonline.org/HOL/LandingPage?handle=hein.journals/ohjdpr20&div =22&id=&page [Accessed on 27/11/2018] 92 World Bank Group, 2011, Alternative Dispute Resolution Guidelines Washington: World Bank Group, available at: https://www.wbginvestmentclimate.org/advisoryservices/regulatorysimplific ation/alternative-dispute-resolution/upload/15322_ADRG_Web-2.pdf [Accessed on 06/11/2018] 105 93 William W Park, 2012, Arbitration of International business dispute: Studies in Law and practice, Oxford University Press, 2d Ed, available at: https://books.google.com.vn/books?id=_7bbbYL18AkC&pg=PT746&lpg=P T746&dq=WILLIAM++W.++PARK,++ARBITRATION++OF++INTERN ATIONAL++BUSINESS++DISPUTES:+STUDIES++IN++LAW++AND+ +PRACTICE+pdf&source=bl&ots=URXpthTPED&sig=gkB7oai2XCpGDgjLenbcmYoQo&hl=vi&sa=X&ved=0ahUKEwim2tHpuqLYAhXBrY8KHY 60AycQ6AEIVzAG#v=onepage&q=WILLIAM%20%20W.%20%20PARK %2C%20%20ARBITRATION%20%20OF%20%20INTERNATIONAL%20 %20BUSINESS%20%20DISPUTES%3A%20STUDIES%20%20IN%20%2 0LAW%20%20AND%20%20PRACTICE%20pdf&f=false [Accessed on 13/12/2018] 94 WB, 2011, Alternative Dispute Resolution Centre Manual - A guide for Practitioners on Establishing and Managing ADR Centres, WB, available at: h www.wbginvestmentclimate.org/advisoryservices/upload/15322_MGPEI_Web.pdf [Accessed on 20/11/2018] 95 WTO, 2018, Understanding the WTO: Settling disputes - a unique contribution, WTO, available at: www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm [Accessed on 20/11/2018] 96 WB, 2018, Vietnam Economic Overview, World Bank, available at: http://www.worldbank.org/vi/country/vietnam/overview [Accessed on 1/12/2018] 97 White & Case, 2012, International Arbitration Survey: Current and Preferred Practices in the Arbitral Process, Whitecase, available at: http://www.whitecase.com/sites/whitecase/files/files/download/publications/ article-The-2012-InternationalArbitrationSurveyWhite_CasePLC.pdfhttp://annualreview2012.whitecase.co m/International_Arbitration_Survey_2012.pdf [Accessed on 19/12/2018] 106 98 Yona Shamir, 2003, Alternative Dispute Resolution approaches and their applications, Unesco, available at: http://unesdoc.unesco.org/images/0013/001332/133287e.pdf [Accessed on 8/11/2018] h Appendix List of interviewed experts Nguyen Manh Dzung (Mr.) MCIarb, Director of ADR Vietnam Chambers LLC Deputy Director and Listed Mediator of Vietnam Mediation Center (VMC) Listed Arbitrator of Vietnam International Arbitration Center (VIAC) and Korean Commercial Arbitration Board (KCAB) Member of the ICC International Court of Arbitration Nguyen Trung Nam (Mr.) Tony Nguyen LLM, MBA, FCIArb, CIArb acred Mediator Managing Director of EPLegal h Member of Science Council of VIAC Phan Trong Dat (Mr.) MCIarb, CEDR Accredited mediator Deputy secretary general of Vietnam International Arbitration Center (VIAC) Appendix US mandatory mediation mechanism The US is considered the father of modern mediation of the world The Singapore structure and Hong Kong legislation are the criteria that the thesis chooses for Vietnam to take lessons from in developing international commercial mediation For the conduct of the US, one thing that Vietnam can strongly consider is the mandatory mediation mechanism which many state court of the US currently apply The strong situation of mediation in the US right now resulted from the MultiDoor Courthouse dream back in 1979 of mediation pioneer Professor Frank Sander of Harvard which is a product of the Pound Conference on Perspective on Justice in the Future (Forrest S Mosten, 2001) In his vision, he stated that every US court should give parties various categories of dispute resolution methods at the beginning, ranging from negotiation, mediation, arbitration to adjudication Decades h later, next generations begin to feel his knowledge Many states now require personnel to work as supporter, advisors to dispute parties in advising them the option about ADR rather than adjudication to settle the dispute For example, in Phoenix, Arizona, the court has contributed a whole area‘s level to form a Self Service Center In such establishment, there is no boundary between the disputant and customers They are here for exploring information services by themselves through video, documents and computer programs In addition, the center also offer others services such as mediators, lawyer… Not only Phoenix, Arizona, other courts in many states across the US also has similar services which served both as an information library for disputant to make their choice in selecting ADR or mediation, and an avatar on how US support on the use of ADR or mediation in particular Having such support from the growth of court mediation, the private certainly has its boots According to author Danny McFadden, currently the backup of US courts in referring to mediation is very significant, which is the authority to demand parties to join mandatory mediation For instance, in the Atlantic Pipe Corporation (APC) case, the party petitioned the First Circuit Federal Court since it considered the U.S District Court in the District of Puerto Rico did not have the power to make APC to join mediation and make the payment for the expense of mediation Despite the fact that the First Circuit Court against the mediation, the conclusion still favored the decision of the District Court because they have the authority to demand parties join mandatory mediation according to many reason and explains stated in their arguments (Danny McFadden, 2015) The major event that show how much mediation has gone from such an option to a must process in the court of the US In 2013, the Board of Judges of the United States Bankruptcy Court for the District of New Jersey issued a significant mediation program that is supervised by the court The program aims to promoted dispute resolution of conflict and proceedings for parties One year later, the court announced that it had issued an order implementing a so called Presumptive Referral to Mediation A worth noting introduction is quoted below: h “It appearing that the Court has determined that mediation may produce a mutually agreeable resolution of all or some of the issues between the parties, and has directed that the following claims be refereed to mediation” Source: Presumptive Referral to Mediation (Bankruptcy Court, 2014) Such compulsory mediation program is issued because after many years of consideration the pre mediation in the past, the judges of the Bankruptcy Court found that mediation has not been used much in comparison with it potential After an extensive survey of the working unit, it has been concluded that mediation is favored by many people and companies in settling disputes As a result, for the success of the mediation program, the court has decided that every cases shall be referred to mediation in order to fully exploit the benefits of mediation for both the court, the legal practitioners and disputants in flexibility and cost effectiveness Many people believes that such mediation program is only one in a million which shall have significant effect Appendix Hong Kong regulation Hong Kong‘s mediation is unique in its own way and is a great combination between the East and the West The thesis shall analyze the Hong Kong‗s legislation governing mediation and see if Vietnam can learn anything from it Mediation has originated from Hong Kong since the beginning of the 20th century (A.K.C, 2013) Several commercial areas in Hong Kong has been engaged with mediation which can be named as building, law Hong Kong initiated an orientation plan for house mediation in the year of 2000 and established a Mediation Coordination‘s Office in the block of the Family Court In the same time, a same unit was also established in the division that deal with lands activities years later These offices shall give the parties information regarding mediation whether they want to use such process However, the remarkable day for mediation in Hong Kong shall the date when the Civil Justice Reform (CJR) and the Practice h Direction on Mediation (PD) were issued and applied in 2009 and 2010 The CJR gave an amount of regulation and principles to target the reduction of the expensiveness of proceeding, to handle proceedings as quickly and close to the reality as possible, to facilitate the features of appropriate distribution amount and procedural economy, and promote the settlement of conflicts (A.K.C, 2013) On the other hand, the rule for civil procedure which was also issued in 2009 laid a clear obligation on the adjudication to have the plan for disputes management Belong to such management plan, adjudication now has the duty to support parties in cases settlement and to promote and advises them to refer to ADR procedure that the court thinks it fit If the CJR gives targets and adjusts the altering in court, PD has formed a background for mediation With the governance of the PD, dispute parties shall consider and refer to the mediation in advance of adjudication The parties are ordered to submit paper that stated the fact that they have been informed about the possibility of mediation and to specified that they want to use mediation or not, belong with the explains If they not have an appropriate explain to such rejection on the use of mediation, the court might implement a fine on them (A.K.C, 2013) Despite the fact that mediation for CJR is an optional mechanism, however the interfere of the court in settlement of every single cases and their order for parties to mediate and give them a fine if they are not so in an explainable way shall make the disputants feel the pressure to use mediation because the surrounding force them to so Such scenario obviously has altered the proceedings culture in Hong Kong and the resorting to mediation as a main mechanism among the others ADR which also has been used in many cases Hong Kong is also famous for its ability in settling financial disputes All thanks to the financial crisis before 2010 which has ignited the uprising demand for expeditious, easy and productive method to settling conflict related to financial matters As a result, Hong Kong Government issued the Financial Dispute Resolution Scheme and even set up the Financial Dispute Resolution Centre in 2010 which is a single unique reasonable place for dispute parties to deal with financial conflict between them Every person with accreditation or appointed of Securities and Futures Commission and the Hong Kong Monetary h Authority, namely bankers or security brokers, are demanded to participate in the Financial Dispute Resolution Scheme In Financial Dispute Resolution Centre, dispute parties must refer to both types of ADR which are mediation and arbitration if they are failure to deal with the conflicts on their own Generally, conciliation or mediation before arbitration is an regular process which happens in many countries and provide disputants the chances to join the effort to solve their disputes in advance of a more strict and formal mechanism For Financial Dispute Resolution Centre, mediator and the arbitrator are separated, dispute parties are demanded to go for mediation in the first place, however if they are not success with it they shall refer to the use of arbitration to end the disputes (A.K.C, 2013) Not only the rule apply obligation on the court to facilitate the approach on mediation in order to solve the dispute, the rule also apply to people who has jobs related to law, therefore they shall support court in reaching targets The PD force the lawyers to sign a declaration that they have informed their clients about the availability of mediation, the comparison in term of expenses in mediation to adjudication and the fine of the court place on the refusal of parties to join the mediation without a proper explains Generally, it is crucial for disputant to provide the information as soon as they begin to working on the dispute cases However, parties which might be individuals or cross-border companies has different perspectives, experiences and desires on mediation Then, the lawyers shall have an important roles in explaining the parties about the voluntary and advantages of the process, obligation of the mediators, parties and the lawyers, the secret of mediation and the appropriation of mediation in references to other ADR that is related Once the parties are ready for mediation, the lawyers shall prepare the cases, parties to join the mediation The preparation means: Submitting the mediation certification, Announcements, Answers and court‘s meeting minutes, select the mediators, demanding a writing to mediate for signature, details the confidentiality of mediation in the Ordinances… In the process of mediation, the lawyers shall join in representing their parties in term of interests, legal matters, discussing the agreement if the result is fruitful In addition, they shall inform to the court about h the result of the mediation and ask for court‘s action to terminate the need for further action of adjudication (A.K.C, 2013) With the guide of the CJR, the court – connected mediation services is not being regulated and left to the decision of market The most remarkable units of Hong Kong in term of providing ADR services are The Law Society of Hong Kong and the Hong Kong Bar Association, The Hong Kong International Arbitration Centre, the Hong Kong Mediation Centre Each of these institutions has a mediation service which has many mediators that are qualified: a minimum length of day work in mediation training about facilitative method together with several mediation reviews practices These institution are all parts of the Hong Kong Mediation Accreditation Association Limited – a leading accreditation organization for mediators which was established in 2012 2012 is also a big year for Hong Kong mediation with the introduction of The Hong Kong Mediation Ordinance that later came into force in 2013 This action enacted the Hong Kong Mediation Bill which was introduced in 2011 This action is very significant since many other developed countries has not enacted such type of mediation regulation (Danny McFadden, 2015) The legislation is use when a proportion of mediation is happened in the territory of Hong Kong or follow an agreement to mediate in words that resort to Hong Kong‘s judiciary or the Hong Kong Mediation Ordinance Such Ordinances serves as a foundation for facilitating the resorting of mediation in settling dispute in Hong Kong and also preserve the confidentiality in mediation The birth of such regulations and organizations has unified mediation in Hong Kong Apology legislation is formed in the foundation by the Steering Committee on Mediation of Hong Kong, it has been brought to the table in the year of 2015 This legislation is the experiences that Hong Kong learnt from dozens common law countries which can be named such as US, UK and Australia Therefore, the Apology Legislation is almost the same between the countries It target the definition of an apology, its neutrality unless the parties want it to become h admissibility, when such legislation is applied and how such legislation affect the coverage issues, mostly insurance According to writer Herbert Smith, just a few months ago, the Apology legislation was passed with the target of promoting the dispute resolution mechanism in Hong Kong The Apology Law shall alter the law resulted of an apology which might come in forms of word, oral or action According to the law, an apology shall not means that the party admit to the fault or responsibility, and such an apology be the evidence to the counterparty by the maker On the contrary, it can be possible if the party that made such apology wish it to become evidence which can be used for later proceedings (Herbert Smith, 2017) Hong Kong is the first jurisdiction in the whole Asia to issue the Apology Law, such action might support the scheme of Hong Kong in positioning itself as the center for the international commercial dispute resolution in the Asia Pacific area (Herbert Smith, 2017) Because such Law shall free the apology maker from obligations which shall help to facilitate the possibility of mediation in settling dispute The matter will take time to see, but if Hong Kong success, this will be another lessons for Vietnam in developing the international commercial mediation h