(Tiểu luận) discuss the role of international commercial arbitration inresolving disputes related to the responsibilities of commercial legalentities in international transactions

FOREIGN TRADE UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION *** MIDTERM ASSIGNMENT Topic: Discuss the role of international commercial arbitration in resolving disputes related to the responsibilities of commercial legal entities in international transactions Instructor: Mr Ha Cong Anh Bao Course: Law for Enterprise - PLUE401.2 Group Vũ Phi Hùng 2112250038 Nguyễn Vũ Hùng 2112250036 Hà Sỹ Chiến 2112250007 Trần Đức Huy 2113250014 Lê Thành Trung 2113250052 Hanoi, October 2023 TABLE OF CONTENTS TABLE OF CONTENTS ABSTRACT I INTRODUCTION II OVERVIEW OF INTERNATIONAL COMMERCIAL ARBITRATION Definition of International Commercial Arbitration The role of International Commercial Arbitration Responsibilities of Legal entities in International Transactions 3.1 Pre-transaction responsibilities 3.2 During-transaction responsibilities 3.3 Post-transaction responsibilities IV THE APPLICATION OF INTERNATIONAL COMMERCIAL ARBITRATION IN VIETNAM Overview Hypothetical case study related to the application of CISG in resolving disputes between commercial legal entities 10 IV CONCLUSION 12 REFERENCE 13 ABSTRACT This research goes into the critical function of international business arbitration in resolving disputes resulting from commercial legal entities' responsibilities in international transactions International transactions are more widespread than ever in an era characterized by globalization and an increasingly integrated global economy As a result, disagreements between parties participating in such transactions have increased This research investigates how international commercial arbitration can be used to resolve these issues more effectively than traditional litigation The study starts by going through the essential notions of international commercial arbitration, emphasizing its voluntary and consensual nature, flexibility, and neutrality It emphasizes the significance of party autonomy in deciding on arbitration as the preferred method of conflict settlement It also discusses the significance of arbitration agreements and the function of arbitral institutions in the arbitration process In addition, the paper emphasizes the benefits of international business arbitration, such as confidentiality, arbitrator experience, and the enforceability of verdicts under international conventions such as the New York Convention It also includes noteworthy case studies and statistics to demonstrate the effectiveness of arbitration in practice In conclusion, this paper emphasizes international commercial arbitration's critical role in fostering efficient, cost-effective, and impartial dispute resolution in the complex environment of multinational transactions It emphasizes its importance in promoting international business partnerships and assuring global commerce's continuous expansion I INTRODUCTION Due to the expansion of trade and the improvement of transportation, people in the 18th century achieved an increase in international transactions, thus a large number of disputes related to the responsibilities of commercial legal entities in international transactions Facing one of the most controversial issues in the commercializing world, people create international commercial arbitration International commercial arbitration is a private method of resolving conflicts between businesses from different regions In this process, two parties are in a conflict, and one outsider (third party) has a binding opinion The process happened outside the law of the nation that those parties come from They choose a set of rules to govern the argument such as those of the International Chamber of Commerce (ICC), the United Nations Commission on International Trade Law (UNCITRAL), The United Nations Convention on Contracts for the International Sale of Goods (CISG), The purpose of the assignment and your research question or thesis statement is to discuss the significant role of international commercial arbitration in resolving disputes related to the responsibilities of commercial legal entities in international transactions by investigating natural functions and analyzing the process of international commercial arbitration Besides that the report will show the responsibilities of the two conflicted parties and provide a case study in a wide range to strengthen key points This study consists of three sections The first section introduces the main topic, provides background information, and shows the overall structure The next section consists of the definition, the importance of international commercial arbitration and some case studies The last section will interpret the findings and discuss their implications for the study II OVERVIEW OF INTERNATIONAL COMMERCIAL ARBITRATION Definition of International Commercial Arbitration International commercial arbitration (ICA) is a method of resolving disputes between parties engaged in cross-border business transactions through a private, neutral, and legally binding process outside of traditional court systems In this process, the disputing parties agree to submit their dispute to one or more arbitrators who render a final and binding decision, known as an arbitral award, after considering the evidence and arguments presented by both sides (Moses, M.L The Principles and Practice of International Commercial Arbitration 3rd ed Cambridge: Cambridge University Press, 2017) Key elements of international commercial arbitration include: Voluntary Process: The parties involved choose arbitration as their dispute resolution mechanism and agree to the terms of the arbitration process in advance Neutrality: Arbitrators are typically selected for their expertise in the subject matter of the dispute and are expected to be impartial and unbiased Confidentiality: Arbitration proceedings are often confidential, which can be appealing to businesses seeking to protect sensitive commercial information Final and Binding: Arbitral awards are generally final and enforceable in national and international courts Parties have limited rights to appeal, which promotes efficiency in resolving disputes Cross-Border Nature: International commercial arbitration is particularly suitable for disputes arising from international business transactions, as it provides a neutral forum for parties from different jurisdictions Enforceability: The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is a widely adopted international treaty that facilitates the enforcement of arbitral awards in over 160 countries The parties to the dispute often sign an arbitration agreement to start the process of international commercial arbitration The terms and conditions of the arbitration, including the rules of procedure, the choice of the arbitrator or arbitrators, and the location of the arbitration, are set forth in this Agreement The arbitration process can start as soon as the arbitration agreement is signed After hearing evidence and arguments from each side, the arbitrator or panel of arbitrators will reach a ruling about the issue This decision is final and irrevocable and can only be contested under certain conditions, such as when there is a significant irregularity in the arbitration process or where the result is against the interests of the public The United Nations Commission on International Trade Law's (UNCITRAL) Model Law on International Commercial Arbitration is one of the international agreements and national legislation that govern international commercial arbitration A thorough foundation for conducting international business arbitration hearings is provided by this model law On the international scale, the United Nations on International Commercial Arbitration law was signed in 1985 and nearly updated in 2006, consisting of 36 Articles and Chapters Vietnam was also one of the members of UNCITRAL with 157/193 votes For more information, the Law on Commercial Arbitration is currently published on this The role of International Commercial Arbitration A significant element of an arbitrator's job is to make sure that each party fulfills their contractual duties, including delivering the goods, paying the price, providing the services, etc An arbitrator is a neutral, impartial third party who weighs the merits of each side's case and renders a decision after carefully examining the information presented to them The arbitrator should be knowledgeable of the relevant laws and policies They are often chosen by the disputing parties in lieu of formal court proceedings, and may be selected specifically for his or her industry knowledge particularly in complex cases where specialized expertise might be required Before formal arbitration proceedings start, the arbitrator will frequently urge cooperative contact between the parties to the dispute in an effort to achieve a settlement Throughout the arbitration, the arbiter will serve as a referee, fostering conversation The arbitrator will then create a settlement agreement if a settlement is achieved An arbitrator acts like a judge in reviewing and interpreting all the evidence presented to him or her (this may include witness statements, testimony, documentation, and so on), applying the relevant laws and rules to the arbitration, and then making a final decision or 'award' which, like a judge's, is final and binding and can only be appealed against in certain specific circumstances if settlement cannot be reached It's crucial to remember that an arbitrator's job is to interpret and uphold a contract, not to establish governmental policy Arbitration decisions that are based on an individual arbitrator's personal sense of "justice" and "public policy" rather than the actual terms of the applicable contracts can be successfully challenged in court and overturned In other words, the arbitrator's interpretation of the parties' contract is allowed, but interpolation and rewriting are not Document continues below Discover more from: luật kinh Pháp doanh quốc tế PLU410 Trường Đại học… 402 documents Go to course Bài tập tình 29 29 42 110 PLKDQT - Cô Minh… Pháp luật kinh… 100% (17) 15 case - cô Nguyễn Minh Hằng Pháp luật kinh… 100% (12) VỞ GHI PLU410 - ghi Pháp luật kinh… 100% (5) Câu hỏi ôn tập trắc nghiệm môn Luật… Pháp luật kinh… 100% (4) Bai tap Luat Ngan sach Nha nuoc Pháp luật 100% (3) The arbitrator's responsibility includes guaranteeing due kinh… process, applying the appropriate law, issuing a reasoned award, maintaining secrecy, and upholding good faith in the context of intellectual property rights, confidentiality, and other rights and interests Each side must be given a fair chance to present its argument andBT refute the claims made HK18 - Bài tập hóa by the opposing party, according to the arbiter The applicable laws and regulations must hk18 nbk be applied to the arbitration by the arbitrator This includes10regulations governing good Pháp faith, secrecy, and intellectual property rights A rational decision must luật be made by the 100% (2) kinh… arbitrator As a result, the arbitrator is required to provide a justification for their decision, explaining how they read and applied the legislation The arbitrator is required to uphold the arbitration's strict confidentiality When sensitive information—such as trade secrets or other confidential information—is at issue in the dispute, this is especially crucial The arbitrator has the right to demand that the parties cooperate in good faith This means that the parties must abide by the arbitrator's rulings and orders and must not try to mislead one another or the arbitrator Responsibilities of Legal entities in International Transactions 3.1 Pre-transaction responsibilities Transactions that involve foreign entities are subject to continuously evolving regulatory, legal, and compliance obligations Therefore, effectively assessing legal risks and rules that may affect a global deal is critical and considered responsibilities for all international legal entities When structuring an international deal not only is it important to identify interactions that can be generated between companies but also consider the many factors that can affect the transaction A few of those considerations include local antitrust laws, securities regulations, corporate law, and determining which jurisdiction’s regulations will apply Legal entities must also comply with tax implications and accounting methods in any international transaction Local payment structure, as well as available forms of financing, should also be considered Not only can these prevent disparity between the power of bargaining and information between parties but they also make sure that two parties reach an agreement on further contract of how the transaction should be processed It is key for the success of an international deal that both legal entities understand the business landscape of the other, what regulations govern the industry of business, and the relevant compliance obligations that apply to a particular situation 3.2 During-transaction responsibilities Once companies reach an agreement on the terms of a contract, the next step is to verify that all responsibilities made up until that point are carried out, and what type of document and actions are required by international and local laws This is accomplished by conducting lists of responsibilities organized in clear order, which is no easy task, especially when multiple countries are involved It’s important to understand what you are looking to learn from the international and local laws as this will inform the types of documents that will need to be collected during the transaction Conducting an international document search and retrieval requires an understanding of the different document types available locally and the nuances in each jurisdiction such as different naming conventions, etc The Incoterms, widely-used Terms of sale, are a set of 11 internationally recognized rules which define the responsibilities of sellers and buyers Incoterms specify who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities The Incoterms are divided into four principal categories: E, F, C and D Category E (Departure), which contains only one trade term, i.e EXW (Ex Works) Category F (Main Carriage Unpaid), which contains three trade terms: FCA (Free Carrier) FAS (Free Alongside Ship) FOB (Free on Board) Category C (Main Carriage Paid), which contains four trade terms: CPT (Carriage paid to) CIP (Carriage and Insurance paid to) CFR (Cost and Freight) CIF (Cost, Insurance and Freight) Category D (Arrival), which contains three trade terms: DAP (Delivered at Place) DPU (Delivered at Place Unloaded) DDP (Delivered Duty Paid) Of primary importance is that each Incoterms rule clarifies the tasks, costs, and risks to be borne by buyers and sellers in these transactions Familiarizing legal entities with Incoterms will help improve smoother transactions by clearly defining who is responsible for what and each step of the transaction 3.3 Post-transaction responsibilities Once the deal closes, companies should work together to merge their operations, which can generate significant compliance implications in the localities involved Parties must consider what local regulations must be adhered to and how they impact the ownership structure In Vietnam, for instance, depending on the type of business activity being conducted; 100% foreign ownership is not allowed and a joint venture with a local enterprise may be required Legal entities also need to recheck and complete all the terms and conditions which were in the premade contract with their partners or the third parties involved, as well as comply with tax implications and declare needed information to specific departments III THE APPLICATION OF INTERNATIONAL COMMERCIAL ARBITRATION IN VIETNAM Overview In Vietnam, the Law on Commercial Arbitration was signed by Mr Nguyen Phu Trong - Chairman of the national assembly in 2010 It provides for the jurisdiction of commercial arbitration, forms of arbitration, arbitration institutions and arbitrators; arbitration order and procedures; rights, obligations and responsibilities of parties in arbitral proceedings; courts’ jurisdiction over arbitral activities; organization and operation of foreign arbitrations in Vietnam, and enforcement of arbitral awards The Law on Commercial Arbitration represents a total of 82 Articles and 13 Chapters, consisting of: (1) General provisions, (2) Arbitration agreements, (3) Arbitrators, (4) Arbitration centers, (5) Initiation of Lawsuit, (6) Arbitration council, (7) Interim urgent measures, (8) Dispute settlement meetings, (9) Arbitral awards, (10) Enforcement of arbitral awards, (11) Cancellation of arbitral awards, (12) Organization and operation of foreign arbitrations in Vietnam, (13) Implementation provisions Moreover, Vietnam became an official member of the United Nations Convention on Contracts for the International Sale of Goods (CISG) on December 18th 2015, and this Convention takes effect on January 1st 2017 This means that Vietnam is a party to the CISG and is bound by its provisions The CISG provides a uniform legal framework for international sales contracts, covering aspects such as contract formation, rights and obligations of the buyer and seller, remedies for breach of contract, and more The membership in the CISG allows Vietnamese businesses to benefit from the uniformity and predictability of its rules, facilitating international trade and reducing transaction costs Contracts signed between Vietnamese enterprises and enterprises from other CISG member states will automatically be governed by the CISG, unless the parties explicitly opt out It's important to note that Vietnam has made reservations regarding certain aspects of contract formality under Articles 11, 29, and Section II of the CISG These reservations may affect the application of the CISG in specific cases Hypothetical case study related to the application of CISG in resolving disputes between commercial legal entities The hypothetical case study below would allow us to understand the role of international commercial arbitration in resolving disputes over disputes resolution terms between two commercial legal entities in real-life scenarios Case study: The buyer sends an order to the Italian seller for the purchase of 200,000 pairs of shoes at the Italy/Yugoslavia border subject to a framework contract of terms, including an arbitration clause in Moscow In addition, according to this order, the buyer must open a 10 letter of credit to the seller before each shipment The seller accepts this order by means of a confirmation letter About months after receiving the order, the buyer received a document from the seller stating that it did not accept the application of the arbitration clause During that time, the parties negotiated orally many times about the arbitration clause, and at the same time the parties began implementing the contract before reaching an agreement on this clause The buyer has opened the first letter of credit to the beneficiary, the seller, and the seller has shipped a portion of the goods as agreed The buyer then complained to the seller about contract errors and requested arbitration in Moscow according to the original framework contract form The seller did not accept the validity of the arbitration clause in the contract and sued the Italian court Judgment of the Court: The court reviewed the previous transactions of the parties and held that from many customary transactions of the two parties in the past, the seller has the responsibility to promptly warn the buyer about its failure to comply with the agreement to apply the arbitration clause This responsibility is even higher when the seller knows that the buyer has opened a letter of credit for the beneficiary, the seller The court did not accept the seller's argument that the seller's reply letter refusing to apply the arbitration clause constituted an offer to replace the old offer because this letter was sent too late On the contrary, the fact that the seller has partially transported the goods, and then continues to rely on the framework contract form, shows that the seller has accepted the buyer's proposal through action (Article 18.1; 8.3 CISG) Ultimately, the court concluded that the contract was formed on the basis of the original order submitted by the buyer and accepted by the seller, so the arbitration clause was also valid Time limit for inspection and complaints about goods non-conformity: Article 38 CISG: the buyer must inspect within the shortest time allowed by actual circumstances; Article 39 CISG: must notify within a reasonable time after the buyer discovers or should have discovered the non-conformity The CISG is adopted by over 90 countries, including Vietnam and other major trading nations By using the CISG, parties can benefit from a uniform set of rules that apply to their international sales contracts This promotes predictability and reduces the risk of uncertainty that may arise when dealing with different legal systems With this case study, we could see how international commercial arbitration works and the application of 11 CISG in real-life scenarios In addition, it emphasizes the importance of having a United Nations Convention to resolve disputes between cross-border commercial legal entities IV CONCLUSION By researching deeply into the theory of the International commercial arbitration; role and responsibility of different parties in an International commercial arbitration, we affirm that International commercial arbitration is a sophisticated process that solves difficulties and conflicts that occur between two or more parties in international transactions In the twenty century, disputes happen at a significantly higher rate in the commercial field Since the number of transactions between nations is developing at an increasing rate, the number of disputes are also increasing Thus emphasizing the essentiality of International commercial arbitration in the world economy Also, in this essay, we research about the implementation of International commercial arbitration in Vietnam to resolving disputes between parties, Judgments of the Court usually bases on The United Nations Convention on Contracts for the International Sale of Goods (CISG), which is adopted by over 90 countries, including Vietnam and other major trading nations 12 REFERENCE Hồng, D.A (2021) GĨC NHÌN THỰC TẾ VỀ ÁP DỤNG CISG TẠI VIỆT NAM TRONG NĂM QUA – SỰ NGẠI THAY ĐỔI HAY GÁNH NẶNG ‘NHỚ NHÀ’? [online] Chào mừng tới EPLegal Việt Nam Available at: https://eplegal.vn/vi/goc-nhin-thuc-te-ve-ap-dung-cisg-tai-viet-nam-trong-4-nam-qua-su-n gai-thay-doi-hay-ganh-nang-nho-nha/#:~:text=Ng [Accessed Oct 2023] thuvienphapluat.vn (n.d.) Luật Trọng tài thương mại 2010 số 54/2010/QH12 [online] Available at: https://thuvienphapluat.vn/van-ban/Thu-tuc-To-tung/Luat-Trong-tai-thuong-mai-2010-108 083.aspx LawNet (n.d.) Luật mẫu Trọng tài thương mại quốc tế Ủy ban liên hiệp quốc Luật thương mại quốc tế năm 1985 [online] Luật mẫu Trọng tài thương mại quốc tế Ủy ban liên hiệp quốc Luật thương mại quốc tế năm 1985 Số hiệu Khongso LawNet Available at: https://lawnet.vn/vb/Luat-mau-ve-trong-tai-thuong-mai-quoc-te-cua-Uy-ban-lien-hiep-quo c-ve-Luat-thuong-mai-quoc-te-1985-13C93.html [Accessed Oct 2023] admin (2020) KỶ YẾU TỌA ĐÀM: CÁC QUY ĐỊNH MỚI CỦA PHÁP LUẬT TRONG GIẢI QUYẾT TRANH CHẤP KINH DOANH THƯƠNG MẠI [online] Luật sư Đà Nẵng - Luật sư FDVN Available at: https://fdvn.vn/ky-yeu-toa-dam-cac-quy-dinh-moi-cua-phap-luat-trong-giai-quyet-tranh-ch ap-kinh-doanh-thuong-mai-2/ [Accessed Oct 2023] International Trade Administration (2020) Know Your Incoterms | International Trade Administration [online] www.trade.gov Available at: https://www.trade.gov/know-your-incoterms 13 More from: Pháp luật kinh doanh quốc tế PLU410 Trường Đại học… 402 documents Go to course 29 29 42 110 Bài tập tình PLKDQT - Cơ Minh… Pháp luật kin… 100% (17) 15 case - cô Nguyễn Minh Hằng Pháp luật kin… 100% (12) VỞ GHI PLU410 - ghi Pháp luật kinh… 100% (5) Câu hỏi ôn tập trắc nghiệm môn Luật… Pháp luật kinh… 100% (4) Recommended for you 192 11 85 Ahead with CPE SB - quan hệ kinh tế… 100% (1) Pathways LS Student Book Leve… Pháp luật kinh… 100% (1) Ielts Vocabulary Booster Pháp luật kinh… 100% (1) [ Group 4] Analysis 18 on China's Belt an… quan hệ kinh tế… 100% (1)