VietNamNet Bridge – Vinalines, the country’s largest shipping firm, has asked the Hanoi People’s Court to annul the judgment of the Vietnam International Arbitration Center (VIAC).

Seven months after handling the lawsuit filed by Vinalines, the Hanoi People’s Court has dismissed it. As a result, the involved parties in the case have have no more appeals.

Vinalines must obey the verdict released by VIAC earlier this year in a dispute case with the SK E&C, a South Korean construction group.

SK E&C, a member of the SK E&C – Vinawaco joint venture, the contractor of the project, claimed that Vinalines must pay for a batch of steel stakes the contractor had brought to the construction site before the government asked that the project be closed in 2012.

In early 2014, VIAC said that Vinalines had to pay VND65 billion, or $3 million to SK E&C, the contractor of the project, for the construction of a harbor at Van Phong transit port in Khanh Hoa province.

When it petitioned the court, Vinalines said VIAC’s decision was contrary to the major principle of Vietnamese laws.

However, the arguments raised by Vinalines were rejected by the court, which said Vinalines could not show any evidence to prove its case.

Vinalines lost the case even though it was backed by the Ministry of Transport.

The ministry had requested that the Hanoi Court ask them to try the case soon in order to help ease Vinalines’ difficulties. Vinalines also petitioned the government, asking for the relevant ministries’ intervention to help speed up the trial of the case.

Vinalines has declined to comment about the court’s judgment.

Meanwhile, lawyers have cited the Commercial Arbitration Law which says that Vinalines must respect the judgment of the arbitrators, because it had previously agreed to have the dispute arbitrated by VIAC.

The court will only annul arbitrators’ judgments if the arbitration proceedings committed serious violations.

Under current laws, if Vinalines ignores the court’s judgment, the South Korean side can take necessary measures to force Vinalines to obey the judgment.

SK E&C, in fact, has taken action twice before. When Vinalines did not pay compensation as ordered by VIAC, the South Korean partner requested the Korean court to seize Vinalines’ ships in South Korea.

In March 2014, a Vinalines Sky ship was seized in South Korea. Vinalines then had to pay a deposit of $3.1 million to ransom the ship. Later, another ship, Vinalines Trader, was seized in June and Vinalines had to pay $296,000 to get the ship back.

A source said that in an effort to avoid similar damages, Vinalines, while waiting for the court’s final decision, requested that South Korean authorities postpone the VIAC’s judgment enforcement.

However, as the final decision has been made, the request to postpone VIAC’s enforcement is no longer effective.

VNE