Khoá luận tốt nghiệp: Alternative dispute resolution (ADR) methods in American and Vietnamese contract law: A comparative perspective

LE HONG ANH453522 ALTERNATIVE DISPUTE RESOLUTION ADR METHODS IN AMERICAN AND VIETNAMESE CONTRACT LAW: A COMPARATIVE PERSPECTIVE BACHELOR'S THESIS Hanoi- 2023... LE HONG ANH453522 ALTERNA

LE HONG ANH

453522

ALTERNATIVE DISPUTE RESOLUTION (ADR) METHODS

IN AMERICAN AND VIETNAMESE CONTRACT LAW:

A COMPARATIVE PERSPECTIVE

BACHELOR'S THESIS

Hanoi- 2023

LE HONG ANH

453522

ALTERNATIVE DISPUTE RESOLUTION (ADR) METHODS

IN AMERICAN AND VIETNAMESE CONTRACT LAW,

A COMPARATIVE PERSPECTIVE

‘Major: Comparative Law

BACHELOR'S THESIS SUPERVISOR PHD CANDIDATE DO THI ANH HONG

Hanoi - 2023

STATUTORY DECLARATION

1 herewith formally declare that I myself havewritten the submitted Bachelor's Thesisindependently, the conclusions and data in theBachelor's Thesis are truthfid and reliable /

Confirmation of supervisor Author of Bachelor's Thesis

PhD Candidate Do Thi Anh Houg Le Hong Anh

Iam also thanlfil to the Comparative Law Institute at Hanoi Law University fortheir prompt provision of essential resources, which played a pivotal role in inspiringand cading the timely completion of my Thesis.

Finally, I am genanely gratefil to my family and friends, whose voneaveringencouragement and support have been instrimental in my academic prasiats and thesuccessful completion of my Thesis./

Author of Bachelor's Thesis

Le Hong Anh:

LIST OF ABBREVIATIONS

TE “mnph gata for example)

ate et cetera (end co fort)

CAMCA Commercial Arbitration and Mediation

Centre for the Americascrc Civil Procedure Code

FAA Federal Artitration Act

IAICA Inter-American Convention on

Intemational Commercial ArbitrationIesIp Intemational Centre or Settlement of

Investment Disputes

MLICC UNCITRAL Model Law on

International Comm erciel Conciistion

UNCITRAL United Nations Commission on

International Trade Lew

UAA Uniorm Arbitration Act

UMA Uniform Mediation Act

us the United States of America

nyc New York Convention

RUAA Revised Uniform Arbitration Act SMA Society of Maritime Arbitrators

‘TABLE OF CONTENTSide cover

1 Rationale of the Thesis

2 Literature review of previous studies related to the Thesis

3 Scientific and practical significance of the Thesis

4, Research ob jectives of the Thesis

5 Research objects and research scope of the Thesis

6 Methodology and research methods,

7 Thesis structure

(Chapter 1: THEORETICAL ISSUES OF ALTERNATIVE DISPUTE

RESOLUTION METHODS

1-1 The concep t of contract and contract dispute resolution

LLL The definition of contract

1.1.2 The definition and characteristics of coutract dispute

‘ontract disp ute resolution

L2.L The concept of contract dispute resohution

1.2.2 Significance of contract dispute resolution

1.3, Alternative disp ute resolution methods

13.1 The definition of alternative dispute resolution methods

1.3.2 Classification of alternative dispute resolution methods

1.3.3, Distinction between alternative dispute resolution methods and

tigation

Conclusion for Chap ter 1

12,

7779

"

"13131415

1819Chapter 2: ALTERNATIVE DISPUTE RESOLUTION METHODS INAMERICAN AND VIETNAMESE CONTRACT LAW

3⁄1 Alternative disp ute resolution methods in American contract lw

DLL Neg jation as am alteruative dispute resolution method in

2020

American contract law 203.1.1.1 Choice of negotiation 202.1.1.2 Conduct of negotiation proceedings 202.12 Mediation as an alternative dispute resolution method in American

contract law 2L

21.21 Principles 212.1.22 The mediation agreement a2.1.23 Conduct of mediation proceedings 221.24 Effectiveness of medietion decision 232.13 Arbitration as an alternative dispute resolution method in Americancontract law 2421.3.1 Principles 2421.32 The esbitration agreement 2521.33 The jurisdiction, ”3.1.3 4 Conduct of sbitretion proceedings 272.1.35 The srbitration award 282.1.36 The arbitration cleuse in contract 29Alternative disp ute resolution methods in Vietnamese contract law 292.2.1 Negotiation as an alternative dispute resolution method in

Vietuamese contract lav 2922.1.1 Choice of negotistion, 302.2.1.2 Conduct of negotiation proceedings 302.2.2, Mediation as an alternative dispute resolution method in Vietnamese

contract law 31

33.21 Principles 312.2.2.2 The mediation agreement 3222.23 Conduct of mediation proceedings 222.2.4 Effectiveness of mediation decision 342.2.3 Arbitration as au alternative dispute resolution method in

Vietnamese contract law 352.23.1, Principles 352.2.3.2 The arbitration agreement 382.2.33, The jurisdiction 38

2.2.3.4, Conduct of arbitration proceedings 42.23.5 The arbitration award 43.3.3.6 The arbitration clause in contract AI3⁄8 Alternative disp ute resolution methods in American and Vietnamese

2.3.1 Provisions ou negotiation in American and Viehtanuese coutract lawfrom a comparative perspective 423.1.1 Choice of negotiation 423.1.2 Conduct of negotiation proceedings 43.3.2 Provisions ou mediation in American and Vietnamese contract lawfrom a comparative perspective

23211 Principles

23.2.2 The mediation agreement

23.23 Conduct of mediation proceedings

23.24 Effectiveness of mediation decision SRERER

2.3.3 Provisions ou arbitration in American and Vietnamese contract lawfrom a comparative perspective 4

23311 Principles 4

33 3.2 The arbitration agreement 4

2333 The jurisdiction, a233.4 Conduct of arbitration proceedings 4

2335 The ebitration everd 423.36 The arbitration clause in contract 42.3.4, Reasons for similarities and differences “Conclusion to Chapter 2 stChapter 3: IMPLICATIONS TO IMPROVE ON ALTERNATIVEDISPUTE METHODS IN VIETNAMESE CONTRACT LAW 333.1 Guiding principles for the proposals to imp rove provisions on

alternative disp ute resolution methods in Vietnamese contract lay 523.2 Specific proposals fo improve provisions on alternative disp ute resolution

‘methods in Vietnamese contract law 33.2.1 Specific propesals to improve provisions ou negotiation in Vietnamese

‘contract law 33

3.2.2, Specific proposals to improve provisions ou mediation in Vietnamese

‘CONCLUSION

REFERENCES

1 Rationale of the Thesis

In en era of burgeoning global business and trade, the management of contractualdisputes has emerged as a criticel expecting research on Alternative Dispute Resolution(ADR) methods in contrect law in both the US and Vietnam holds immense significance,

as it unveils the complexities, chellenges, end prospects entwined with resolvingintemetionel commercial conflicts

“The selection ofthe US for comparative analysisisinherent toits status as a globaleconomic powerhouse end a leader in international business trensections Its legalsystem, rooted in the Common Lew tradition, has exerted significant influence onintemetionel commercial lev and ADR practices, rendesing it an ideal subject forcomparative study Furthermore, the diverse nature of Américen society, its receptivity

to ADR mechanisms, end its impact on contrect relationships make it a pertinent andinsightful context for comparative analysis

By jucteposing Americen ADR methods with those employed in Vietnamesecontract law, this comparative perspective offers a comprehensive understanding of thediverse approaches to dispute resolution within contrasting legal systems and culturalsettings, The exeminetion of Vietnem's Civil Law-based legal framework and its

‘waditional, historical, end institutional influences provides a dymemic contrast to theAmerican legal context, affording sich tepestry of insights into the complexities ofcross-cultural dispute resolution While ADR methods have edvencedin the US, they arenot as prominent in Vietnam, meking œ compatison between the tvo countiesindispensable for gleening valuable insights thet cen inform the improvement of ADRprovisions in Vietnamese contract lew Therefore, this comparative perspective net anycnsiches scholarly understending of ADR methods in American and Vietnemese contracttow but also offers practical implications for legal practitioners, policymakers, andentities engaged in trensactions This endeavor not only facilitates the advancement ofADR practices in Vietnam but also alignswith the broader global discourse on enhancingspute resolution mechenisms across diverse legal systems and cultures

Therefore, these factors collectively justify the selection of the topic "A

Comparative Analysis of Alternative Dispute Resolution (ADR) Methods in American

‘and Vietnamese Contract Law fos the Bachelor's Thesis,

2 Literature review of previous studies related to the Thesis

2.1 Foreign researches

Mose, D., H Kleines, B (1999), "The Emergence of Alternative DisputeResolution in Business Today" published in Equal Opportunities International, focus onthe growing relevance of altemetive dispute resolution methods in the contemporery

‘business landscape, The meteril discusses vasious ADR techniques, their epplicationsin

‘business settings, and he potentil benefits associated with their adoption

Marat Mukhamediyevs 2011 Master's Thesis on “Alternative Dispute Resolution

in Business Contracts, especially mediation clauses” from the Faculty of Lew, LundUniversity, delves into the utilization of ADR, specificelly medistion clauses, within

‘business contracts The Thesis provides insights into the advantages and challenges ofincorporating mediation clauses into business agreements

Elena Nosyreve's work in 2001, “Alternative Dispute Resolution in the UnitedStates and Rusia: A Comparative Evaluadion" published in the Annual Survey ofInternstional & Comperstive Le, offers e comparative analysis of ADR precticesin the

US end Russia This sesearch explores the similarities, differences, and effectiveness ofADR systems in these to counties

“Alternative Dispute Resolution: A Lawyer's Guade to Mediation and other FormsofDispute Resolition" by Alexander H Bevan, published in 1992 by Sweet & Mexwell

in London describes some of the best known veieties, such as arbitration, adjuckcationend mediation General comparisons are drawn with other dispute resolution processes

to give practical advice on the most eppropriete fom of ADR to use for a given set ofciscumstences The text includes a mumber of cese histories, conging from personal injuryisputes to construction litigation The author has also provided semple ADR clauses to

‘benefit those drafting an ADR clause for insestion into a contractor lease

Stephen Balthasay's "International Commercial Arbitration — A Handbook"(second edition), published by Hert Publishing is a comprehensive guide to nternetionalcommercial arbitration The hendbook covers vasious aspects of the arbitration process,

including its applicstion in resolving commercial disputes on a global scale

The sforementioned studies have contributed mumerous legal principles andprovided « broader perapective on the regulation of alternative dispute resolution intheUnited States, Nonetheless, the research’s scope remains restricted, end no comparativeenalyses of ADR methods in American contract lew with Vietnam heve been conducted.2.2 Domestic researches

Truong Nhet Quang "Legal regulations on Contracts - Basic legal issues"provides an in-depth exploration of fundamental legal issues concerning contracts Thisresource addresses key concepts and regulations seleted to contract lew, offeringcomprehensive insights into contract formation, performance, and other essential aspects

Do Ven Dai (2017), "Commercial Arbitration Law of Vietnam - Verdicts andVerdict Comments" focuses on the commercial bitration law in Vietnam, possiblyoffering a collection of verdicts end insightful comments perteining to commercialsrbitration cases This meterial is beneficil in understending the practical epplication ofcommercial arbitration lew and ts impact on legel decision-making,

Nguyen Hien Phuong 122) discusses the "Law on contracts from the perspective

of comparative lew", This resource provides a comparative anelysis of contract lews,potentially shedding light on similertien differences, and best practices in contract+sgvlation from « global perspective This is valuable for undesstending how Vietnam'scontract law aligns with or diverges from legel frameworks in other jurisdictions

The "Judicial Manual on Arbitration and Mediation” euthored by contributinguthors from the Supreme People’s Cot end IFC, is e comprehensive guide tosrbitrtion and mediation practices in Vietnam, This resource offers practical insights,procedural guidelines, and best practices for resolving disputes through erbitration andsmedistion within the Vietnamese legel system

The "Proceedings of the Faculty Scientific Conference" by the Faculty ofEconomic Law (2020) titled "Resolving Business and Commercial Disputes throughNegotiation and Mediation - Practice end Recommendations for Improvement” presentsacademic research andl practical recommendations based on conference proceedings Itoffers valuable insights into methods for effectively resolving business end commercial

disputes through negotiation end medistion.

‘Nguyen Thi Kh (1997) in “Eeonemie Contracts and Forms of Economic DisputeResolution" provides foundstional insights into economic contracts and the various forms

of dispute resolution commonly utilized within economic contexts

Bui Thi Thuỷs (2021) "The law regarding the resolution of business disputesthrough negotiation mediation and enforcement in Tiemam” offers sn in-depthexploration of the legel framework end practical applicetion of dispute resotutionmethods in the Vietnemese business context

It cen be concluded thet the majority of researches about altemative disputeresolutions in Vietnamese contract law hes not given a comparison view with Americayet Hence, the study “Alternative Dispute Resolution (ADR) Methods in American andVietnamese contract law - Á comparative perspective” does not coincide with theseprevious studies Thisis a completely new study thet focuses onthe Vietnemese contractlew of alternative dispute resolutions in compasing with America’s

43 Scientific and practical significance of the Thesis

4.1 Scientific siguificance

The Thesis holds scientific significance in its potential to contsibute to cross.cultural legal enalysis, reforms, economic implications, and comperetive legal studies Itoffers velusble insights into the intesplay of cultural factors, legal reforms, economicimpects, and comparstive legel research within the context of internetional contrect awend ADR practices

3.2 Practical significance

The Thesis provides valuable guidance for stakeholders in cross-border trensactions

‘by comparing ADR fremewarks and practices in Américan and Vietnamese contract lew Itcffers actionable insights for legel practitioners end businesses, as well as policyrecommendations The comparative study sims to enhance ADR practices in bothjwisdictions promoting more efficient and equitable resolution of international contractsputes, Overall, the Thesis equips stakeholders with practicel recommendstions forpostive influence inintemstiona contact law and ADR processes

4, Research objectives of the Thesis

Firsdly, st endeavors to conduct a comprehensive comperstive analysis of theprevalent ADR methods in Americen and Vietnamese contract lew Moreover, theexploration of historical, cultul, and institutional contexts within both legel systems is

en essential component, The Thesis also seeks to ciiticelly assess the practicalimplications of ADR methods within Americen and Vietnamese legal landscapes.Finally, the formulation of policy recommendations to snhanee the utilizetion andffectivencss of ADR methods in both Americen and Vietnamese contract lew stands azsignificant objective

45 Research objects and research scope of the Thesis

S Research objects of the Thesis

The research object of the Thesis is the assessment and comperison of ADRmethods within the legal frameworks of American and Vietnamese contract law Thisinvolves the exploration of the epplicetion, effectiveness, end cultural influences on ADRmethods, aiming to provide e comprehensive understanding of how these methods areutilized in the resolution of contractual disputes in both legal systems The researchdelves into the precticel implicetions, including enforcesbility and judicial support, andsims to identify potential areas for cross-jurisdictionel leaning and improvementAdditionally, the Thesis examines policy recommendations for enhancing the utlizetionend effectiveness of ADR methods in both American and Vietnamese contrect law.5.2 Research scope of the Thesis

The Thesis explores end compares ADR methods in American and Vietnamesecontract lw, considering historical, culture, end institutional influences It assesses thepracticel implications of ADR methods and aims to provide insightsinto their impact andviebility within cach judsdeHon Additionelly, the Thesis formulates policyrecommendations to enhance the ullizetion end effectiveness of ADR methods in bothegal systems

6 Methodology and research methods

61 Methodology

In the Thesis, the waiter uilizes the methodology of dielectical matesislism andhistorical materislism rooted in Marxist-Leninist philosophy Furthermore, in order to

casry out the set sesearch tasks, the Thesis applies Ho Chi Mink’ thoughts onthe Stateend Law, viewpoints of the Communist Party and Stete of Vietnam regarding theesteblishment of a rule of lew state, judicial reform, and international integration Thesemethodologies sim to provide comprehensive insights into the comparative analysis ofADR methods, considering legel, cultural, and policy fectors within both legal systems

62 Research methods

First the snelysis method, combining theoretical research with practice, is themein method used in this Thesis to clasify the reguletions on altemative disputeresolutions in contract lew

Second the synthess method is the method used mainly inthe process of collectingdocuments, opinions, end solutions to complete the lew on regulations on alternativedispute resolutions in Vietnam

Third a systematic method is used to sequence end find consistency amongcommon issues of alternative dispute resolutions legiletion

Fourth comparative legel anslysis involves a detailed examination endcomparison of the legel frameworks, ststutes, and judicial precedents related to ADRmethods in American end Vietnamese contract law It aims to identify similarities,ferences, and potential ereas for crossjtristictional leerning end improvement

7 Thesis structure

In adeltion to the preface; literature review of previous researches related to thetopic; conclusion end references, the contents and results of the Thesis include threechapters

Chapter 1 Theoretical issues of altemative dispute resolution methods incontractew

Chapter 2 Altemtive dispute resolution methods in American end Vietnamesecontract law

Chapter 3 Implications to improve provisions on alternative dispute methods inVietnamese contract law

CHAPTER 1 THEORETICAL ISSUES OFALTERNATIVE DISPUTE RESOLUTION METHODS1.1 The concept of contract and c

1.1.1 The definition of contract

A contracts the legal basis to ensure the implementation of civil exchanges thatere taking place more and more excitingly in ell areas of social life, binding the parties

“agreement to the [seme] thing"? There must be evidence thet the pasties hed each,

from an objective perspective, engaged in conduct manifesting their essent, and acontract will be formed when the pasties have met such requirement ? This subjective

approach empehsizes the notion of consent and the legel consequence of the contract,

is to “create am obligation to do or not to do a particular thing” A contract isconsidered to be concluded by means of an abstract process of the “meeting of thewills" The subjective method is @ way of understanding contracts where the partiesinvolved have « personel understending of what they agreed to If two parise enteredinto « contract with different understendings of what the terms meent, the contractwould be considered invalid It seems to the euthor thet, nevertheless, this theory ofcontract focuses on the partied individual beliefs and intentions, rather than enobjective interpretation of the contracts terms

` Ngực Him Mug Q02), Z8 on connect ftom te perspective ef conpentve la, People's Poe

Inthe objective approach, the conlractis presumed as the voluntary attention ofaperty tobe bound, andthe conduct ofthe partyintending to be boundis a consequence

of thet intention As for Robert W Emerson and John VU Herdhwick, “contract is an

agreement that is legally enforceable, expressly or implicitly” 6 This approach

emphasizes the legally binding element of the contractual agreement, The objectivetheory of contract is the idee thet « contract is not just en agreement bebween tropasties, but rather @ series of ections that give the appearence of an agreement Thisneans thet the intentions of the parties involved ere not es importent as their actionsend the way those actions are interpreted by an outside observer It is author'sunderstanding thet by focusing on external actions rather then intemal thoughts endbeliefs it provides a clear and objective standard for determining whether a contrectexists and whet its terms are

According to another interpretation, Vietnemese researchers Ngo Huy Cuong!

defined “A contract is a method of organizing social life When the parties enter into

‘a contract, it means that they have wished to cooperate together to meet their ownneed, to shave interests together, and to refrain from infringing on each other'sinterests, of society “® This definition reflects & viewpoint aligned with the objectivetheory of contracts, This perspective emphasizes the collaborative end cooperativenature of contractual agreements, framing them az a means for individuals to worktogether to fulfill their respective needs end interests while respecting societal welfare

“The focus on shared interests and the avoidance of inftinging on cach others rightssigns with the objective theory's emphasis on observable actions and the externalmenifestetions of mutual assent

In general, contract lew is exercised and governed either under common lew{wisdictions, civil lew juistctions, or mixed-lew jurisdictions thet combine elements

of both common and civil lew Common law jurisdictions typically require contracts

to include consideration in order to be valid, wherees civil end most mixed-lew

‘ice Dean Cl aw Fac, Beøi La Uns

Ngọ Hay Cuong 2013), Test Book of Conract Lae ~ Genera, (For postgraduate trông), Einoi Notional

‘Universty Publishing Howse, Hana, £9.

jusisdictions solely require @ mecting of the minds between the pasties It can be seenthet different approaches ere starkly adopt, they all recognize the cherecteristic element

of & contract as the unity of will to create legel consequences thet bind the parties toestablish « contractual relationship From the ebove analysis,e contract cenbe definedthet: “A contract is an agreement whereby one or more entities bond themselves to one

‘or more other entities in order to transfer property, do or not do a certain job

1.1.2 The definition and characteristics of contract dispute

From legal perspectives, the definition of « dispute can be found in meny legal

dictionies, especially cited in Black's Lew Dictionary (2TM edition), « dispute is

defined as "A conflict or controversy; a conflict of claims or rights; an assertion ofaright, claim, or demand on one side, met by contrary claims or allegations on theother"® The definition of a dispute as presented portrays it as a conflict or controversyrooted in cleims or rights, however, the evowed description may pose limitetions inencapsulating the intricacies of contemporary legel disputes This defiition's focus onopposing cleims and allegations may inadvertently oversimplify the multifacetednature of legal conflicts Consequently it runs the sisk of excluding the diverse errey

of dispute scenarios that exist within the legal realm

According to Brown and Marsiott’s ADR Principles & Practice, « dispute is "aform of legal conflict resolved through negotiation mediation, conciliation or thirdparty settlement." By encompassing multiple avenues for sesolution, it emphasizes theadaptability end flexibility necessary for effectively addressing legel conflicts On theother hand, while the definition emphasizes the diverse renge of resolution avenuesavaiable, it may not comprehensively account for certsin complex, multi-faceted legalconflicts thet require e more tailored or nuanced epproach.Moreover, the broadness ofthe definition might lack in addressing the nuances end complexities present indifferent types of disputes, potentilly requiring further elaboration to truly seflect thediverse nature of legal conflict resolution methods

Charles Fried, & prominent legel scholar end former US Solicitor General,

°

defines a contract dispute es “a conflict between the parties to a contract concerningtheir respective rights and obligations wnder that contract" He emphasizes theimportence of understanding the specific contractual terms end the pastieg intentionswhen defining a contract dispute, Fried's definition revolves primarily around conflictselated to sights and obligations While thisis e significent aspect of contract disputes,

it may overlook other potential sowces of conflict, such es disputes over contractformation, terminstion, or other consequential issues

Besides, Ewan McKendick, « leading authority on contract law, describes acontract dispute as "4 disagreement bebween parties to a contract concerning itsformation, interpretation, performance, or termination." McK endsick recognizes thatcontract disputes cen arise at various stages of the contracting process, from theFormation ofthe agreement tots execution and eventual conclusion His definition cen

‘be an addltionel point to the Fried!s definition above

According to above enslysis, the combination of those defition can become thebest definition of "a contract dispute", thereby a contract dispute cen be asserted asfollow: A contract dispute are conflicts or disagreements that arise from contractualrelationships between the parties regarding the implementation or non-performanceofrights and obligations in the contract, leading to the rights and interests of the

‘parties being violated

By enalyzing the definition of criminal measures, itis obvious thet a contractispute hes the following cheracteristics) Mrstly, e contract dispute takes many

&fferent forms in practice It often arises from contract violetions This breech canmenifest in various forms, such es non-payment, delayed performance, substanderddeliverables, or violations of contractual terms, triggering contentious disagreements+sgarding liability end contractual enforcement However, not all contract violationslead to disputes Secondly, a contract dispute need qualify the following elements: ()

A contractual relationship existe between the patties, (i) There is a violstion ofobligations (or alleged violation of obligations) by one party in the selationship; (i)

‘There is a disagreement between the parties regarding the violation or handling theconsequences arising from the violation Thirdly, classifying types of contrect disputes

10

‘based on the following criteria: the legal natwe of the contrac, field where contractualfeletions miss; disputed value ond foreign clements in the dispute, cíc Theclassification of contract disputes is significant in choosing the form of disputeresolution end the choice of applicable Inv Some common examples includedisogreements over the terms of the contract, interpretetionel issues and embiguities

‘within the contrect, particularly in understanding clauses, obligations, or rights, breech

of contract, and fraud, Finally, the legel framework and eveileble remedies heavilyinfluence the dynamics, strategies, and outcomes of contract dispute resolution Thelegel and remedial fremework governing contract disputes pleys @ pivotal role inshaping the cheracteristics and resolution strategies of such disputes

1.2 Contract disp ute resolution

1.2.1 The concept of contract dispute resolution

Dispute resolution is the process through which competent agencies ororganizations review relevant documents and evidence to handle civil, marital andFamily, business, commercial, end lebor disputes and protect the legitimete sights and

interests of individuals, agencies, and orgenizetions."° Contract dispute resolution

specificelly involves the selection of competent agencies or orgenizetions by thepasties involved in a contractual relationship These agencies or orgenizetions considerend make decisions to resolve conflicts of interest thet may esis? during theimplementation of the contract If the pasties are uneble to resolve the dispute on theirown, & competent dispute resolution agency will handle the matter Overall, contractGispute resolution can be implied thet a method employed to address conflicts,disagreements, or breaches of rights and obligations that arise from contractual

© aimisuy of Paste Extbsk of Lege Sciences (2006), Law Ditionary, Buycopedia Publishing Howse and

Judicial Poblching Howse» 287

"

other legel entities bound by the contract terms Legal representation often plays @crucial role in advocating for the partied interests Additionally, mediators orarbitrators sre commonly involved in elternative dispute resolution methods,facilitating communicetion and guiding negotietions to resolve the dispute

Ininstances of contractual disputes, the applicable lew serves as the interpretiveframework employed to discemn the entitlements and duties of the parties The disputeresolution clause within the contract outlines the adjudicating authority and proceduralguidelines for dispute resolution This clause is important in contracts involving cross-border elements and state entities, often designating the authorized appointee andaddcessing sovereign immunity Despite its customary inclusion, ambiguity in theseprovisions can lead to adverse legel consequences for the parties

In term of the selection of dispute resolution methods Contract disputeresolution principles emphasize flexibility, allowing pasties to choose the most suitableresolution method Different counties may have varying regulations encouragingpasties to engage in mediation or negotiation before other procedures The choice ofdispute resolution method is based on the important principle of the partie sight toself determination, protected by law Although the choice of dispute resolution methodprimarily depends on the determinstion of the pastiesinvolved, there are casesin whichthe patties are bound by an agreement within the contract (ex an arbitrationagreement), or in some instances, the aggrieved party may choose the appropristemethod themselves"!

Interm of the participation in dispute resolution Contract dispute resolution istypicelly a voluntery process, meaning thet all parties involved must agree toppasticipate in the chosen method This allows for the pasties to have control aver theprocess and actively engage in resolving the dispute

1.2.2 Significance of coutract dispute resolution

Contract dispute resolution is a criticel process for effectively addressing andresolving disagreements that may emerge bebween partiesinvolvedin a contract When

bì

isputes arise, having a well-defined process in place becomes essential to ensurefeimess and effectiveness in resolving the istues at hand, To begin with itis aimed atresolving the dhspute by finding a solution thet is agreeable to all parties involved Thisinvolves adékessing the specific issues that led to the dispute end working towards @mutually satisfactory outcome, Another vital objective of contract dispute resolution

is the protection ofthe rights and interests of the parties It focuses on upholding theterms end conditions outlined in the contract, ensusing that all involved parties honortheir obligations By addressing breaches or violations of the contract in a fair andeppropriate manner, the resolution process underscores the impostance of upholdingcontractusl agreements, which in tum helps to meintein trust end confidence in thecontractual relationship đieient dispute resolution procesces also sive to minimizethe costs and time associated with resolving the dispute In many cases, traditionallitigation can lead to lengthy, expensive legal bettles that can strein resources andprolong the resolution process In contrast, altemnative methods can offer quicker andmore cost effective avenues for resolving disputes, ellowing the parties to seve bothtime and money while achieving a resolution Last but not least, preserving therelationship between the parties is another crucial objective of contract disputeresolution Especially in cases where ongoing business relationships are at stake,resolving the dispute in a timely and feir menner becomes imperative, By finding @+esolution that satisfies the interests of pasties involved, contract dispute resolution canplay a vite sole in maintaining end musturing the reletionship, all owing the pesties tocontinue cooporete together effectively

1.3 Alternative disp ute resolution methods

1.3.1 The definition of alternative dispute resolution methods

Contract disputes are on inevitable aspect of modem business andl legalenvironments Contractual ADR methods refer to the specific ADR mechenisms thatpasties agree to use in their contract to resolve disputes that may arise, These methodsexe included in the dispute resolution clause itself end provide « pre-determinedframework for sesolving disagreements

Presented by Mose and Kleiner in The Emergence of Alternative Dispute

B

Resolution in Business Today, ADR defined as a struchwred process aimed at creatingaresolutionfor a dispute through the usage of any technique benefiting the disputents,with assistance of a neutral party, as well as, not requiring a court decision (or any’other binding riding issued by third party on the case settlement) The generalobjective of the ADR is to settle a conflict in en amicable way and cut off potentiallitigation costs to businesses by setting eside the possibility of adjudicetion Bylitigation costs be understand time, emotional wear-and-tear, financial expenses, andpartner relationships” The authors emphasizes the structured nature of the process,indicating a deliberete end methodical approach to resolving disputes Addibonslly,the emphasis on amicably settling conflicts and reducing potential litigetion costssigns with the broader objective of ADR Nevertheless, it may overlook certaincomplex cases where formal legal adjudication is unavoidable

According to the definition analyzed by Marat, ADRprocediares are alternative

to the administration ofjustice However, ADR carmot substitute adjudication andegplication of any ADR techniques carmot be an obstacle to bring a dispute to a court

or arbitration While this definition effectively delinestes the role and Limitations of

ADR, it may also potentielly underscore an overreliance on formal legal proceedings,potentially hindering the uptake of ADR in cestein conterts, Additionally, the need forstuiking « balanee between ADR and formal edjudicetion could present chellenges indetermining the most appropriate approach for individual disputes

Tareeent years, there hes been more discussion about taking e systems approach

in order to offer different kinds of options to people who are in conflict, end to foster

“appropriate” dispute resolution “That is, some cases end some complaints, in fect,

cought to go to formal grievance, to a court, to the police, to 8 compliance offices, ortoe government Other conflicts could be settled by the parties if they hed enoughsupport end coaching and yet other cases need mediation or erbitration Thus

‘Mos, D., Kier, B1099, The Buergoce of Atemtve Dupe Resolition ix Buabass Tod, Đguổ

oppotwitesbeematenal (Vel TỶ Na 56) SE

lager Maser Tess, Puby of Lew Land Uravesay.» 3

“Tymch 3 001), ADR eel Hoyo 4 Stems Approach to Covfict Management, Negotiation Toanal, Vohmne

4

“alternative” dispute sesolution usually means “a method that is not the courtsHowever, ADR is also increasingly being adopted as a tool to help settle disputes

‘within the coust system 15

Accordingly, ADR can refer to any method of resolving disputes outside ofingation regrouping all processes and techniques of conflict resolution oeetsTingoutside of any governmental authority They have in common the aims of hưng the

‘adlversial attitude and encouraging more opermess and better commustication betweenthe parties to a dispute This leads to earlier settlement in appropriate cases with asaving in managerial and legal time, expense and worry A by-product of ADR is thatitis much more likely, where relevant, that the parties can continue to work togetherfor the dispute has been terminated

1.3.2 Classification of alternative dispute resolution methods

Appropriate dispute resolution may teke many forms Basicelly the intervention

of « third party making the decision is at the extreme end of appropriate disputeresolution It is commonly celled ebitretion There are other forms, including:concilistion, medistion, carly neutrel evaluation, mini-tials, med-arb, arbimed, fact-finding sights-besed medistion, interest-based medistion, neutral-based medition

Generally, ADR maybe classified into three major areas!”

‘Peis Andree (2000), Aermatvedipae resolution: 28T, scence, cult as, Treo, korn Le PS

° Eeavth Glaser (2001), ConnactDitptes cut Ateratve Dspte Resohton: Some Obcervations, Aavocste

(Wexcouver Bur Assocation) 59 Advocate (Vancoure), Vol S8 Pat S,p 725-726

`E Fidur, WL Ury and B Paton C01), Getmg to Yes Negonaing Agreement without Ging in, Pangan

Banke,p Số

1s

‘The result of negotiations often comprises commitments end agreements on specific

solutions to resolve previously arisen disputes.”

‘The advantages of this method include: @) No requirement for complexprocedures, (i) Not restricted by stringent legel procedures, (i) Cost effectiveness;Gx) Minimal damage to the relationship between the parties; (Q Preservation of

‘business confidentiality Dispute resolution through negotistion often takes placeduring contract performance (upon occurrence of @ violation) or after the contractseletionship ends, initisted by one party proposing solutions to resolve impasses oremerging disagreements, leading to negotiations and compromises

However, the drawback of dispute resolution through negotietion lies in thesequicement for both parties to be sincere, honest, end possess high degree ofcooperstion, end seemingly, each party may need to "compromise" in order to expectsuccessful negotiations, The negotistion outcome entirely depends on the volunteryagreement of each pasty, so itis not highly regerded in legal terms Fusthuumore, if @ispute arises even after a successful negotiation, st may be chellenging for a party toinitiste legal action, especially in determining the basis for the Iav st - whether itisdue to # contract violation, improper implementation, or feltwe to fulfil commitmentsmede during the negotistion process Enforcing on agreement reached throughnegotiation may also present challenges

1 Out-of- cout mediation

Medistion, skin to negotiation, stands as « chosen method for resolving disputes

by the involved parties, Differing from negotistion, medistion contains an element of

‘neutral third party This third part, jointly accepted or designated, acts ax a facilitator

to guide the parties in reaching suiteble solutions toresolve conflicts and put an end tohostilities The mediator isnot acting asa judge or counsel, and has no power toimpose

& decision on the parties”

“Conciliation” is aterm thet has led to some confusion with “mediation” As the

nguyen Thí He (1997), Feowmic Conracts ed Fors of Economic Dispute Rsolsion, Dong Nei Plier House Deng Nap Số

‘Black's Law Dictionary, Sanh Baton (1091),

16

to terms, "mediaion" and "conciistion" heve come to be used in practice, thisGistinction is often bhured, end the words used interchangeably Fusther, where «concilistion service is provided by a cout, the process offered may be celled

medistion'Some people, notebly those in the building industry, see concilistion as

medistion, with the concilister (6) imposing no decision and (b) not even gving enopinion Others, refering to the London Common Law end Commesciel BarAcsocition Pilot Scheme proposal, see conciliation as being distinct from medistion

in thet the concilietor does, ultimately, give en opinion end an assessment as to the

likely tial outcome >1

However, the preference for the term “mediation” in this context is twofold.Fisstly, "concilistion’ canries connotations of industriel relations and family matters,whereas “mediation’ better conveys the concept of 8 neutral intermediary facilitetingcommunication and negotietion between conflicting pasties Additionally, the term

“mediation” is stendard in the US, where IDR (Europe) Limited has developed andpromoted the process under this name Notably, IDR emphasizes ‘commercialmedistion to differentiate it from family mediation, encompessing a brosd rang: ofdisputes including personal injury, partnership disputes, and other conflicts thet may

‘be categorized as‘commerciallitigetion’ in court

The techniques of medistion can be illustrated by the story of two cookssquabbling over en orange The medietor esks each cook why they want it — to learnthet one wants the peel for marmalade, the other the flesh for juice The result is enoptimisation of both pasties’ interests The cooks end the mediator have looked et theproblem from the point of view of interest rether than sights and positions, they hevelooked at the problem together.

‘The method of this resolution offers numerous benefits “A lack of awarenessabout the benefits of mediation leads to Inge amounts of money being spent by

iy Lawrence M904), Reeron”, vee Pauly Court Jounal, Lav Jounal Lary Heal,

Py

° Alnus H Bevan (1992), s1prab-2

0

businesses on court proceedings.” “But it is not just about financial and time costsit's also about relationship costs Lengthy legal proceedings mean Inmdreds ofthousands of broken commercial relationships,” ssid Arnaldo Abruzzini, SecretaryGeneral of Eurochambers (the Association of European Chambers of Commerce andIndustry) First, to avoid the expenses and time commitments associated with legalproceedings Engaging in litigation can impose significant financial burdens on one orboth parties, impacting business reputetion and access to funding Second, litigentsmay prioritize non-legal concems over legal matters For instance, e transportationcompany discovering a flew in e recently purchased warehouse may prioritize swiftrepairs over a lengthy tsiel, as delays could disrupt operations or lead to loss of

1.2.23 Arbitration

Despite being procedurally less formal then litigation end being private (untillitigated), arbitration is most like litigation and can be something of a misfit withinADR Itis binding and basically adversasiel end has been eround for hundreds of years

Acbitration is a method in which the parties agree that e neutral third party(exbitretor or arbitral tribune) will sender a legelly based decision after the pasties have

an opportunity to present their case Arbitration arises either by virtue of clauses in.

contracts or terms of collective agreements or “voltoitarily’” once conflict hesdeveloped Its longevity suggests thet in practice as well as theory it has merits Itiswidely usedin international trade disputes This form of dispute resolutionis governed

by confidential erbitration principles, safeguarding the confidentiality of business

° Bxedlundxts (2014), Mediation aol for growth, ressreease,Brssts,p 9

Black's Law Dictony

18

matters and personal reputstion®”, Arbitration isan altemative to litigation, but likelitigation, & decision (qrard) made in arbitration proceedings is binding upon theparties asif made by « cout judge

Resolving disputes through arbitration can be quite costly" The expenses

sssociated with erbitration are usually erteblished beforehand and often supass those

of ADR methods It is however, less expensive than the cout aystem The mejoradvantages of arbitration are: (1) the matter can be heard comparatively comp, (2)the evidence and the award are private; 3) the parties can determine who the decision-cer will be; (4) the rules for abitration can be determined by consent ofthe parties

‘Although most of the above advantages are in contrast to litigation, it must besid that its finality’ gives it an edge over other Less ‘intrusive! ADR methods in thetyes of some critics of ADR These people argue thet the proponents of alternativedispute resolution overstate their case, that either the pressures of non-binding methodslend to unfit agreement or the process does no more than what would have happenedanyway, and the finality of arbitration gives it a rigour which is absent elsewhere 2

Arbitration exists in two forms: ad-hoc arbitration, also known as temporaryaubitration, and inctittional arbitration A&ho sbitration is established on atemporary basis to address & specific dispute upon the request of the parties and issubsequently dissolved after resolving the case Thus, it ensures fleribilty, speed, and

bi for simple disputes where swift resolution is sought,

1.3.3 Distinctions between alternative dispute resolution methods audgio

The differences between ADR methods and litigation are profoundly rooted intheir fundamental nature Littgstion is adversarial in formal cout setings, whileADR methods mich as mediation and arbitration stress collaboration and consznsus-building This contrest significantly impacts conflict resolution dynamics and long-

ian Thong Ath GOI, TY lạt reser commercial cmtmad spars rough ébinton, Jans of

"Nguyen Thi Van Anh, Thm Thi Thờ: Tiny (2020), The process of rsohing đồi Dwough commerciat

Tp,

° Rieder H Bevan (1992) ig04,p 7.

ro

term relationships between disputing parties ÁddiHondly, the determination of

‘outcomes sets ADR methods apart from litigation In litigation, decisions are imposedbby ajudge or jury, leading to binding resolutions Conversely, ADR methods prioritizevoluntary agreements reached through negotietions or determined by e neutral thirdparty, highlighting the control and flexibility in ADR versus the authoritative neture

of judicial determinations in litigation They are, ADR methods comparedvofavourably with itigetion for theirs leck of vigour including the lack of coutmendate dhuing the interlocutory stages and for the very finality saised aboveMoreover, the formal and informal settings of these resolution methods contibots totheir disparities, Litigation occtws in formal, intimidating cout settings, while ADRmethods often occur in more informal, flexible, and private settings, shaping the netureend tone of the resolution process In terms of advantages, ADR methods offertimeliness and costeffectiveness, providing fester resolution end reduced costscompared to protracted and expensive litigation Additionally, the involvement of aneutral third party in ADR processes guides pasties towerd solutions, and ADR alsooffers confidentiality and privacy, allowing pasties to openly discuss without feer ofdam aging reputations or relationships, unlike public litigation proceedings

Conclusion of Chap ter 1

In the exploration of the theoretical issues suxounding ADR methods in thecontext of contract lew, it becomes evident thet ADR presents e multifaceted approach

to resolving disputes thet incorporates various methodologies, including erbitretion,medistion, and negotietion Furthermore, this chapter has delved into the inherentGifferences between ADR and traditional litigation, highlighting the distinctiveattributes and benefits of ADR in fostering cooperation, preserving relationships, andexpediting the resolution process

The theoretical issues in Chapter 1 of this Thesis form the basis for the enlysis

of curent regulations in Vietnam end American contract law in Chapter 2 and theproposal for new seguletions on ADR in Chapter 3

CHAPTER 2 ALTERNATIVE DISPUTE RESOLUTION METHODS

IN AMERICAN AND VIETNAMESE CONTRACT LAW2.1 Alternative disp ute resolution methods in American contract law

3.1.1 Negotiation as an alternative dispute resolution method in Americancontract law

Section 2 of the FAA upholds the validity end enforcesbility of arbitrationageements, unless œ ground exists in lew or equity for their revocetion Thisunderscores the legel foundation enabling parties to engege in negotistion with theassurance that arbitration agreements are binding and enfosceeble, thereby influencingthe negotistion landscape Section 3 of the FAA provides the provision for courts tostay proceedings in ections referable to erbitretion, underscoring the FAA's impact onthe negotistion process by facilitating the progression of disputes to xbitrationFurthermore, Section 9 of the FAA specifically addresses the confirmation ofecbitration awards, shơw cesing the legal fram ework's influence beyond the negotiationphase by establishing the procedure for confirming arbitral awards in cout andenforcing them asif they were « coust judgment

28 USC § 636(c) the Magistrate Judge shall have the authority torrefer cases to ADR

programs and to grant relief from the requirements of these ADR local nles"*

American judges encourage litigants, courts advisers andlawyersto contact and

` Cried Sears Dumict Cot ADR Local Hales xvikbe at stp jim cnduscomts govacabules/ADE,

consult with trust units of ADR under their jurisdiction, in order to analyse the optionsfor each individual case ADR is accomplished by e plurslity of procedures, includingnegotiation, supervised by a specially appointed ADR magistrate”, "The Cout shalldesignate one of its magistrate judges as the ADR Magistrate Judge The ADRMagistrate Judge is responsible for overseeing the ADR Unit, consulting with the ADRDirector and legal staff on matters of policy, program design and evaluationeducation training and administration "5t

The encouragement of litigants, cout advisers, endlewyersto engage with ADR,

‘units under theis jurisdiction reflects e proactive effort to analyze the available optionsfor each individuel case, This approach underscores the importance of facilitetinginformed decision-making and leveraging ADR procedures, including negotiation,under the supervision of a specially appointed ADR magistrate The designetion of anADR Magistrate Judge responsible for oversesing the ADR Unit emphasizes thesignificence of ADR within the cout system and the commitment to its effectiveadministration In light of this, it is crucial to continue promoting awareness andunderstanding of ADR methods among legal professionals and stakeholdersAdditionally, ongoing education, treining and program design efforts under theoversight of the ADR Magistrate Judge will further enhance the functionality andaccessibility of ADR methods within the judicial system

2.1.1.2 Conduct of negotiation proceedings

It seems thet there is curently no specific governing provision for negotiationIewsin the US, acknowledging that cachnegotistion hasits own distinct traits end thatthere is no single or exclusive method for organizing a bargeining session

‘As past of the overell dispute resolution approsch, most contracts require thepasties to mect in an attempt to resolve the dispute, Many contracts require the parties

to negotiste This may require named persons or senior executives to negotiate, Some

Atemasve Dspue Eesousion methods, Las Youmal Lire - HenGnbna vue a

‘nps seni g/L Page unde he joumulsi sists 20176id=760colechnrjoumals inde,

clauses contain an obligation to negotiste in ‘good faith’ or engage in ‘bona fide"negotiations The lew conceming the requirements of “good faith’ is not setled

2.1.2, Mediation as an alternative dispute resolution method in American

‘coutract law

2121 Principles

First the principle of freedom of will: In the US, mediation is & consensus

‘building process where parties resolve disputes with « medistor's guidance This activepasticipetion simsto generate outcomes aligning with their interests, often resulting ingrester satisfaction then litigation Pasties have freedom in enforcing agreements andcan seek support from legel counsel or other individuals during medistion

Second, principle of confidentiality: Under UMA regulstions, all pasties andpauticipents in mediation, including medietors ond lawyers, are granted varyingdegrees of privilege to prevent disclosure of medietion discussions Pasties cen waivethese protections but must sill uphold the sights of other participants Additionally,UMA places constraints on mediators, prohibiting them from disclosing medistiondetails to the cotxt or providing testimony on their opinions or essessments in court

Thừa the principle of equality: Equality is exemplified through the openexpression of cach party's viewpoints end their voluntary agreement to uphold the finaldecision In addition, equality is established when mediation aids in eddressingisputes at their core, Specifically, the active pasticipation of the involved parties inthe mediation process contributes to producing mutually satisfactory outcomes Theessence lies in all disputing pasties feeling content and gratified with the rent, andvoluntarily honoring it, independent of any imposition by judicial authorities

2.1.23 The mediation agreement

Regarding formal validity, a valid agreement to mediate (AtM) must be bothformally end substentively veid 3? Formal velidity relates to the extemal expressionofthe agreement Unlike agreements to arbitrate, for an AIM to be Formally valid there

3

sư special requirements outside ofthe applicable contract lay regpiremsntz Thunsuch agreements do not have to bein writing or signed However, the cout in somesates, for exemple, a Texas appellate cout affirmed enforcement of « handwrittensediation agreement, tating thatthe pastes "agree[d] to enter nto aformal setlementagreement" because hay terms were set forth and there was no language cleriĐTng

that the parties did not intend to be bound by the handberitten agreement."

Ith regard to subtantive vali, the substantive validity of AIM is « materthat can be afected by public policy and mendatory overriding rules, as the partiescannot escape these rules through contractual straagemtents Public policy festsagreements that involve mutters that cannot be subject fo party autonomy, auch axpublic ndniniauetion and contracts involving third pastes There have been instances

of American courts refusing to enforce an AtM calling for medistion contrary to state

lew For instance, in Garrett v, Hooters-Toledo®, the dispute involved a mediation

clause that required the employee to request medision within ten days of « claimsing If the employee filed to bring the claim within his period the clause indicated

‘that this was a forfeiture of the claim 39 Moreover, the mediation would have to take

pltce in «city other than the employee's work place, Ưnnwptisngiy, the court heldthatthe clause was unconscionable, asthe tems ofthe ceuse imposed “im andbarriers that would routinely defer former employees from vindicating their rights "37

21.2.3 Conduct of medision proceedings

UMA estebishes general principles and common privileges fr pastes engeeinginmedistion Additionslly, UMA doesnot enforce specific procedures, prionitizing thefreedom of decision-making forthe entities invelved It also allows individual statesthe autonomy to adopt mediation methods and procedure that alignvwith their customsand speificities

In the US, the development of private professional mediation centers extemal

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tothe cotrls hasledto courts delegating or refering disputesto there medistion centerswhen deemed suitable Through agreement documents, courts can collaborate withmedistion centers by trensfersing some of their jurisdiction to these entities, The couststhen exclusively handle cases unresolved through medkation Despite their affilistionwith the court system, međiaion centers operate as independent legal entities, distinctfrom the courts

2.1.2.4 Effectiveness of mediation decision

Cuurently, there are tro distinct perspectives regarding the legal validity ofmedistion outcomes in the US One perspective treats mediation agreements asenforceable contracts, subject to contract principles Some states may enforce orallyagreed mediation settlements based on genuine consent, while others require writtendocumentetion The second perspective considers mediation ageements as coutjudgments, but U.S, lew doemtt inherently recognize their general enforceability

‘without legel evaluation and serutiny

Under contract lew, courts will epply principles of contract lew to enforce

nedistion agreements In HIM Portland Devito Bualders, the FirstCircuit held that

pasties have to abide by a mandatory mediation agreement thet is past of « med/erblouse The Cleiment intended to initiste erbitretion without going through me distionend referred to the US Supreme Court’ sjudgements in favor of arbitration The FirstCiccuit nonetheless rejected this argument: “Under the plain language of the contractthe arbitration provision of the agreement is not triggered until one of the partiesrequests mediation As e consequence of the legelly flawed application of the FAA,the US courts seem to be confused ebout how exactly @ medietion agreement isto beenforced *! Whereas some courts order a stay of the proceedings,” others order

*Eg,hJaijgiia Howing Auchan v Dore & Associates Conracting he ,(2000); Lakeland Fre District

‘Deter Totasmaarn (2008), Agreements to Negotiate i he Trouretional Context ~ awe of Contract Law andBWectve Dupute Recolition, Ung L Ray,p 08

HIM Pordand LEC Devito ules (l4 Cx_2003)

“9 Drateng Camstee UREA (1909) dnt deme Drop, annotation to Ace 5

tw erder specie pafommance

specific performance Agein other couts dismiss the clsim with or withoutprejudice

2.1.3 Arbitration as am alternative dispute resolution method in American

‘contract law

21.3.1 Principles

First, over the past few decades, the U 8 Supreme Coust has adopted a highlyfevoursble approach towerds exbitration end taken the view that, “courts must placearbitration agreements on an equal footing with other contracts end thet the FAA

“requires courts to enforce privately negotiated agreements to arbitrate, like othercontracts, n accordance with their terms." Accordingly, the U.S Supreme Court hasfound thet the FAA pre-empts any legel rules "hanging on the primary characteristic4ƒ an axbitration agreement” Under this approach, party autonomy is the primarylegal concept on which arbitration is based Under the FAA, exbitration is a matter of

“consent not coercionTM* The patties determine the scope of the arbitration agreement end are generally free to structure the arbitral procedure as they see ft

Second impartiality of arbitrators The principle of ensuring the impartiality ofccbitrators is instrumental in safeguarding the integrity of arbitration in Americancontract dispute resolution Legal provisions and case lay in the US emphasize theimportence of selecting neutrel and independent arbirators to preside over arbitrationproceedings The imperticlity of erbitretors is crucial in upholding the feimess andcredibility of the ebitvetion process, thereby enhancing the legitimacy of arbitralswards and decisions

Third finality and enforceability of awards Acbitral awards ere expected to befinal and enforceable in Americen contract dispute resolution The legal bass for thisprinciple encompasses provisions within the FAA and judkciel precedent, whichemphasize the conclusive nature of arbitral awards Once an arbiral awerdisrendered,

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* To nfornaion Sciences he 489 05 468,479

Nelsen SA Aoanal Feeds Bueraatona Cơ, 559 US 652 Q010), /8uereen Byres Co v Bala Colors

it is typically binding on the parties and subject to limited grounds for challenge orappeal This principle reaffirms the notion that arbitration serves as a vieble andconclusive method for resolving disputes, contributing to the efficiency and certainty

of the arbitration process,

Fouwth limited judicial intervention The principle of limited judicialintervention in arbitration proceedings is rooted in legal provisions and case lew thataffirm the deference to arbitration as a preferred method of dispute resolution TheFAA embodies this principle by imposing restrictions on judicial interference inarbitration, thereby underscoring the autonomy and effectiveness of the arbitrationprocess This legal basis reflects a judicial policy thet prioritizes the enforcement ofarbitration agreements end the limited involvement of courts in arbitral proceedings,

‘thereby aligning with the overarching principle of party autonomy

3.1.3.2 The arbitration agreement

‘The arbitration agreement is the basis of the erbitrel proceedings and vests thearbitral tribunal with the power to decide the dispute submitted to it The parties caneither submit en existing dispute to arbitration or agree that future disputes beaxbitrated

Regarding the doctrine of separability If the axbitration agreement were nottreated es seperate from the main contract in which it is contained, the jusisdiction of

‘the arbitral tribunal would stand and fall with the enforceability of the main contract,

‘This would provide pasties opposing arbitration with an effective tool with which toobstruct the arbitral process, by merely alleging thet the mein contract is

‘unenforceable In order to shield the arbitral process from such manoeuvres, the courtshave developed the doctrine of separebility, pusuant to which the agrement to arbitrate

is independent of the mein contract inthe sense that allegations of the invalidity of themein contract do not necesgarly affect the erbitation clause, Rether, the pasty opposing

arbitration must direct its chellenge specifically to the asbitration clause.”

= sen Ban 01), benno Commer bioaton— A Hnuboo( een edn Hat RN,

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mua Paine Cơ v Food & Conlon hốy Co (961; Buckeve Check Catling Bx v Cendega, (2008);

m

Regarding the law applicable to the arbitration agreement Pursuant to Asticle

3 FAA, an arbitration agreement “shall be valid irrevocable, and enforceable, saveupon such grounds as exist at law or in equity for the revocation of any contract."Aabitration agreements are hence governed by the general principles of contract lew.Inthe US, contract law is a matter of state lew There is no natiomvide federal statutory

contract law.‘

Reagrding the form of the arbitration agreement Both the FAA and the NYCprovide thet arbitration agreements must be made in writing ® however the arbitration

agreement need not necessarily be signed in order to be enforceable According to

the predominant view, an enforceable arbitration agreement can be made by way of

email or other electronic communication *! An arbitration agreement cannot, howeves,

‘be implied in Fact or law The U.S Supreme Court hes held thet, to the extent thetstate laws provide for stricter form requirements, such requirements violate the FAAand ere therefore pre-empted by federal law S2

Regarding the effect of the arbitration agreement The srbitration agreementvvests the arbitral tribunel with the juisdiction to decide disputes felling under theagreement (prorogation) and deprives the otherwise competent cous of jucisdiction(derogation) If the arbitral tribunal lecks juisdiction, the award can be set aside(wacated) end enforcement of the award can be refused." The question whether thearbitral tribunal has jurisdiction is therefore of utmost importance A valid arbitrationagreement divests the courts of the jurisdiction that they would otherwise heve over

‘matters felling within the scope of the arbitration agreement If a claim covered by avalid arbitration agreement is brought to court, the court must, on the application of &party, stay the court proceedings until completion of the arbitration in accordance with

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thế terms of the agreement “If an arbitral ewardis rendered without a valid arbitrationagreement, the arbitral award can be set aside (vacated) and can be refusedenforcement 5

2.1.33 The judsdiction

In the US, matters relsted to the question of jurisdiction of the arbitral tribunalare referred to as gateway matters Determining whether the arbitral tribunel holdsjurisdiction lies with either the court or the tribunel itself In First Option Chicago,Inc v Kaplan, the US Supreme Court decreed that courts, unless the arbitrationagreement indicates otherwise, are responsible for resolving questions of exbitrebility,encompassing whether the dispute aligns with a valid arbitration agreement The Courtemphasized the necessity of “clear and unmistakable" evidence signifying the pastiesintent to delegate such decisions to the arbitral tribunal (known es Kompeterc-

Kompetene) ‘1 Notably, the incorporation of the UNCITRAL Arbitration Rules has

been regarded ae sufficiently clear evidence of jwisdiction delegstion Manycontemporary œrbitration rules encompass delegetion provisions meeting this

prerequisite

‘Where a foreign cout has made e decision on the jurisdiction of an arbitraltribuol, this does not preclude a U.S cowt from examining jurisdiction de novo.Wherever a jurisdictional dispute arises out of an exbitration agreement, US cowts,

‘by defult, will examine the dispute on an independent and de novo basis withoutregard, inter alia, tothe existence of foreign judicial proceedings considering the samejurisdictional isrue

21.3.4 Conduct of arbitration proceedings

Firstly, when a dispute arises, both parties are typically required to contact thearbiwation institution, providing essential details such as names, addresses, end a briefoverview of the dispute, Upon receipt of this information, the arbitration institution isresponsible for furnishing the parties with explanstory materials and initial documents,

Sane 3 FAR, Arrbe HỢ) NÝC,

‘Arucl 10@)(4) FAA, ticle VO NYC.

”