MỤC LỤC
In conclusion, the significance of this thesis – “Impact of Public Policy on Commercial Arbitration in Vietnam” stems from its contributions to the development of the legal framework for the recognition and enforcement of foreign arbitral awards in Vietnam, its insights into international practices and standards, its analysis of recent legal developments, and its practical implications for businesses and investors. Moreover, Akosua Serwaah Akoto’s article “Public Policy: An Amorphous Concept in the Enforcement of Arbitral Awards”, published in 2021, has played a crucial role in simplifying and consolidating the understanding of public policy, clarifying the complexities surrounding the concept, and thus providing a cohesive and accessible explanation.
An international arbitral award must be final so that it may be subject to a request for judicial recognition and enforcement in a particular state, as the provisions of the New York Convention, which govern the recognition and enforcement of arbitral awards (Uncitral Secretariat et al., 2017, p. Recognition refers to the formal acknowledgment by a country’s judicial system that an arbitral award is valid, final, and legally binding, involving a review of the award to ensure that it meets certain legal requirements and criteria for recognition in that jurisdiction.
Such public policy is well-defined as evolving out of an international consensus involving universal standards that are widely recognised and deemed unacceptable in most civilised countries, such as bribery, corruption, slavery, religious discrimination, murder, and terrorism. The International Law Association (“ILA”) Resolution of 2002 provides a useful framework for understanding the concept of public policy in the context of international arbitration, distinguishing between procedural public policy and substantive public policy, each serving distinct purposes in the arbitration process.
The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, a cornerstone of international arbitration, incorporates a public policy exception that allows courts to refuse the recognition and enforcement of foreign arbitral awards that violate public policy (Schreuer et al., 2018, p. By upholding public policy while respecting party autonomy, the international arbitration framework strives to provide an effective mechanism for resolving cross- border disputes in a manner that is consistent with the principles and values of different legal systems.
The limitations of the Geneva Protocol’s enforcement mechanism became apparent over time (Contini 1959, p. 1 Geneva Protocol on Arbitration Clause in Commercial Matters, 1923, Article 1. 4 Geneva Protocol on Arbitration Clause in Commercial Matters, 1923, Article 3, “Each Contracting State undertakes to ensure the execution by its authorities and in accordance with the provisions of its national laws of arbitral awards made in its own territory…”. 289–291), prompting the need for further developments in the field of international arbitration. Most fundamentally, both instruments established, if only imperfectly, the basic principles of the presumptive validity of international arbitration agreements and arbitral awards and their enforceability by specific performance, as well as the parties’ autonomy to select the substantive law governing their relations and to determine the arbitration procedures.
National courts in these jurisdictions often adopt a pro-enforcement attitude towards arbitral awards, considering them an integral part of public policy itself, and exercise their discretion to refuse recognition and enforcement of foreign arbitral awards under the New York Convention in exceptional cases only13. They require a direct and clear contradiction between the foreign arbitral award and the fundamental moral and legal principles of the forum state in order to refuse enforcement, meaning that mere inconsistencies or disagreements with foreign law or decisions of foreign courts are not deemed sufficient to invoke the public policy defence. Due to London’s prominence as an arbitration centre, the enforcement of foreign arbitral awards in the United Kingdom is frequently viewed as a “secondary” issue in comparison to other aspects of international commercial arbitration and international commercial law in general (Vargiu & Ahmed, p.
Only in exceptional cases where there are significant procedural irregularities or a clear violation of fundamental principles of justice will German courts consider refusing the recognition and enforcement of a foreign arbitral award based on public policy grounds (Solomo 2017, 364–367). Additionally, in Germany, the evaluation of a violation of public policy is impacted by the existence of a sufficient connection to the forum, known as “Inlandsbeziehung.” This implies that the level of scrutiny applied to a foreign arbitral award will hinge on the degree to which it is connected to Germany. The respondent argued that the award violated public policy and raised numerous objections, including the alleged incorrect interpretation and application of the law by the arbitral tribunal, the conduct of oral hearings at a location other than the seat of arbitration, the exceeding of the time limit for rendering the award, one arbitrator allegedly falling asleep during the proceedings, and the allocation of costs to the respondent.
While India has historically adopted a more interventionist stance in relation to public policy, recent reforms have aimed at striking a balance between ensuring public interest and promoting a pro- arbitration environment. Indian courts have shown a greater willingness to recognise and enforce foreign awards, taking into account the principles of international comity and the restrictive interpretation of public policy grounds. Overall, the evaluation of the international application of public policy on the recognition and enforcement of foreign arbitral awards highlights a general trend towards a pro-arbitration approach in many jurisdictions.
The court, upon receipt of the application, would assume the responsibility of accepting the application and summoning the relevant individuals or organisations involved to provide clarification on any ambiguous aspects of the application.41 Depending on the circumstances of each case, the court might issue a decision to suspend or terminate the application review process, or convene a meeting specifically dedicated to the examination of the application.42 During this meeting, the Application Review Panel would exercise its authority to render a decision on whether or not to recognise and enforce the foreign arbitral award in accordance with the applicable legal. In the event of an appeal, the Vietnamese Supreme People’s Court would assume direct review of the application, with its decision being deemed final.45 In cases where no appeal was lodged, and the award is accepted, the court would transmit a copy of the decision to recognise and enforce the foreign arbitral award, along with a copy of the award itself, to the competent Civil Judgment Enforcement Agency in compliance with the provisions of the Vietnamese Law on Enforcement of Civil Judgments.46. Although the rate of cassation and reopening trials for judgments and decisions, including those related to the recognition and enforcement of foreign arbitral awards, is generally low (SPC 2023), these provisions serve as a foundation for the Vietnamese court system to rectify any errors that may have occurred during the proceedings and were not yet resolved by the appellate-level court, particularly if they significantly impact the rights and interests of the parties, the public, or the State53.
In specific cases, when one such error of the above principles arises, which could be considered a misapplication of public policy as a refusal ground for the recognition and enforcement of foreign arbitral awards in Vietnam, the process of appeal provides an avenue for parties to challenge decisions that they believe to be incorrect or unjust, and have the opportunity to present their arguments before a higher court, which can review the case and rectify any mistakes that may have been made. Luckily, in 2020, recognising the significance of evaluating the actual situation of recognition and enforcement of foreign arbitral awards in Vietnam, as well as the conformity of Vietnam’s arbitration law with the standards of the Vietnamese and international arbitration systems, the Ministry of Justice published a database (“Database”) containing basic information on the recognition and enforcement of foreign court judgments and decisions and arbitral awards in Vietnam that were rendered from 1 January 2012 to 30 September 2019 (MOJ 2020). The application review panel in this case took a reasonable and aligned approach with the spirit of the New York Convention and the provisions on the violation of fundamental principles in the CPC 2004, evaluating that recognising and enforcing the foreign arbitral award would violate the principles of the Civil Code 2005 and the Law on Commerce 2005, which are related to respecting the freedom and voluntary commitment of the parties to the agreement.
It is worth noticing that the arguments and insights regarding the definition of public policy in relation to the LCA 2010 and the Resolution are based on research conducted by former judges, scholars, and legal specialists rather than being derived from an authoritative body. This might mean there could be a more unpredictable application of the law in the future, creating opportunities for its potential abuse and contributing to the challenges in ensuring a dependable and uniform approach in interpreting and applying the concept of public policy in the recognition and enforcement of foreign arbitral awards. It is worth noting that almost all Codes and Laws in Vietnam have provisions or dedicated chapters on “basic principles.” This allows the requesting party to easily invoke the ground that an arbitral award is “contrary to the basic principles of the law in Vietnam.”.
In sum, these countries not only prioritise specialised education and training for judges in the field of international arbitration but also actively engage in international forums and cooperative programmes, thereby enhancing their expertise and contributing to the development of a robust arbitration ecosystem. A primary function of this court is the adjudication of applications pursuant to Section 101 of the Arbitration Act 1996, particularly those seeking the recognition and enforcement of arbitral awards originating from foreign states that are parties to the New York Convention. In addition to their dedication to facilitating the framework for the recognition and enforcement of foreign arbitral awards, the aforementioned countries also prioritise the monitoring and evaluation of this process, including the aspect of applying public policy considerations.
By establishing a specialised division or court, Vietnam can assemble a team of specialists with the knowledge and experience to handle requests for recognition and enforcement of foreign arbitral awards This centralised approach would not only reduce the load on provincial courts but also facilitate a more streamlined and efficient resolution of these cases. In conclusion, Vietnam has the opportunity to transform its arbitration landscape and enhance its position on the global stage by drawing valuable lessons from countries known for their pro-arbitration stances and limited scope of public policy application, such as the United States, the United Kingdom, India, France, and Germany. By incorporating academic perspectives, including the notable contributions of a former judge and many other scholars, a deeper appreciation of the intricacies and challenges inherent in enforcing foreign arbitral awards in Vietnam, especially relating to public policy, has been attained.