KhattarWong LLP

Asialaw Vietnam Analyst March 2009

By Dung Le

Foreign arbitration awards are recognised and enforced in Vietnam on the basis of reciprocity on the part of the country from which such judgment originates or a specific international treaty or convention between
the country of the judgment and Vietnam.

Vietnam is a party to the New York Convention 1958 on the recognition and enforcement of foreign arbitration awards (FAA). It has also entered into a number of bilateral treaties on mutual judicial assistance.

The three pillars of the regime of recognition and enforcement of FAA in Vietnam consist of (i) the Ordinance on recognition and enforcement of foreign arbitration awards, September 14 1995 (the Ordinance); (ii) the Civil Procedure Code, June 15 2004; and (iii) the Law on Enforcement
of Civil Judgment, November 14 2008.

Under Vietnamese law, a foreign arbitration award refers to an award made outside the territory of Vietnam by an arbitrator appointed by mutual agreement of the parties, or an arbitration award made within the territory of Vietnam by an arbitrator other than a Vietnamese registered arbitrator.

A FAA requires the approval of Vietnamese judiciary in order to be enforceable in Vietnam. Pursuant to Article 4 of the Ordinance, the state organ responsible for the analysis and decision on the recognition and enforcement of FAA is the Peoples’ Court of provinces and cities under central authority.

Procedural rule
Interested parties must submit an application with the Ministry of Justice (MOJ to recognise and enforce the FAA in Vietnam. This includes, among other things, a copy of the relevant international treaty of which Vietnam is a participant, a valid copy of the foreign arbitration award and a valid copy of the arbitration agreement. Documents made in a foreign language must be translated into Vietnamese and certified in accordance with the laws of Vietnam.

Within seven days of receiving the valid application file, the MOJ will transfer the file to the province or city’s court where the principal office of the organisation against which enforcement is sought is located, or
where the individual against whom enforcement is sought permanently resides or works,
or where the relevant assets are located.

Within two months from receiving a file, the relevant court shall make a decision either to suspend or begin a court hearing. The hearing must be held within 15 days from the date of issuance of decision by the court. At the hearing, concerned parties are allowed to present their arguments, but the court has absolute discretion in making a decision on the recognition and enforcement of the foreign arbitration award in
Vietnam.

The interested parties, however, are entitled to appeal against the court decision to the Supreme Court. The Supreme Court shall review decision made by the courts of provinces or cities within one month from
the date of receipt of a notice of appeal. The decision of the Supreme Court is final and
binding. A FAA which is recognised by a court and permitted to be enforced in Vietnam shall be of the same force and effect as any other decision of the court.

Practical issues
There are a number of issues in the procedure of recognition and enforcement of FAA in Vietnam. One of the issues is inappropriate implementation of the Ordinance by the judges. There were instances where
the trial council conducted an analysis of the factual content of the case which had
already been decided by foreign arbitrator. But according to the Ordinance 1995, the court should only check that the FAA and attached documents are not in violation of Vietnamese laws.

Enforcing the FAA is also be fraught with difficulties because the legal framework for enforcement of civil judgments in Vietnam is still under development.

However, since the WTO accession in 2007, the Vietnamese government is making strong efforts to strengthen the regime by introducing new legislation and detailed guideline regulations. The recent issuance of the Law on Enforcement of Civil Judgement, due to take effect on July 1 2009, is expected
to significantly improvement recognition and enforcement of FAA in Vietnam.