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More businesses choose arbitration instead of going to court

The number of business disputes brought to commercial arbitration has been increasing steadily. Around 146 cases were resolved at VIAC (Vietnam International Arbitration Center) in 2015, while 80 cases were resolved in the first half of 2016.
VietNamNet Bridge - The number of business disputes brought to commercial arbitration has been increasing steadily. Around 146 cases were resolved at VIAC (Vietnam International Arbitration Center) in 2015, while 80 cases were resolved in the first half of 2016.

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The number of dispute cases resolved at VIAC

The figures were released by Phan Trong Dat, deputy secretary general of VIAC, at an international commercial arbitration workshop held days ago in Hanoi.

Of the cases resolved at VIAC, two-thirds were disputes among Vietnamese businesses.

In the past, bringing cases to the court was the top priority for businesses. In many cases, involved parties did not respect the decisions made by arbitrators, even though the contracts signed between them showed that disputes would be settled at arbitration centers.

Do Trong Hai, president of Bizlink, a law firm, noted that the trend of settling disputes with arbitrators has become clearer since 2010 as Vietnam has integrated more deeply into the global economy and more international transactions have been made. 

Businesses have the right to choose arbitrators and the languages to be used in dispute settlement. 

In many cases, involved parties did not respect the decisions made by arbitrators, even though the contracts signed between them showed that disputes would be settled at arbitration centers.

The Vietnamese law is not a must for involved parties, while they can choose the laws of other countries, even though their disputes are arbitrated by Vietnamese arbitration centers. Businesses can also negotiate with each other to shorten the dispute time.

In principle, the request by involved parties to cancel arbitrators’ rulings is still ensured. However, it is only the court which can make decisions on canceling the judgement; the number of canceled judgements is on the decrease.

According to Dat from VIAC, in 2015, no VIAC decision was annulled. Meanwhile, the time for dispute settlement has been shortened to six months. In some cases, it took 24 days only to make a judgement.

Before signing agreements with arbitration centers, enterprises have the right to know about the service fee they have to pay. The fee will be paid by the loser of the case. 

However, Dang Xuan Hop, partner of Allens& Linklaters, an arbitrator of VIAC, pointed out that the proportion of cases resolved at VIAC was still low compared with the total number of dispute cases.

The figure that 146 dispute cases were resolved at VIAC in 2015, much higher than 63 cases in 2010, showed businesses’ higher interests in commercial arbitration. However, this does not mean that arbitration is the choice of the majority of businesses.

Hai commented that in many cases, Vietnamese businesses only chose arbitration for dispute settlement because their foreign partners requested this. The passivity was explained by the lack of knowledge about international laws.


DDDN


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