Dispute resolution by commercial arbitration has long been considered an effective method, in line with international trade practices. The parties can actively select arbitrators with expertise, confidentiality of information and ensure the expediency of dispute resolution. However, despite reaching a favorable arbitral award, the winning party's journey is not over. Practice shows that the judgment enforcement stage is the most important and difficult "bottleneck", especially in Vietnam – where the competent authorities still have many inconsistent interpretations of the legal position and enforcement effect of arbitral awards.
Need to prove that the arbitral award is not required to be annulled?
One of the typical and repetitive problems in current practice is the fact that judgment enforcement agencies require the judgment creditor to provide a court document confirming that the arbitral award is not required to be annulled. This request leads to the consequence that the enforcement of the arbitral award is stalled, directly affecting the legitimate interests of the winning party. This is not only a procedural barrier but also a systemic legal issue related to the perception of the nature and validity of arbitral awards in Vietnam.
According to the provisions of Clause 5, Article 4, Clause 5, Article 61, Article 66 of the Law on Commercial Arbitration 2010, arbitral awards are final, effective from the time of promulgation and are not subject to appeal or protest according to appellate or cassation procedures. Clause 1, Article 69 of this Law also stipulates that only in case there is a petition for annulment of an arbitral award within the statutory time limit (30 days from the date of receipt of the award), the court will consider it. Thus, the law does not require any court certification procedures before organizing judgment enforcement. However, in the practice of applying the law, there are many cases in which the judgment enforcement agency requires a court document certifying that the arbitral award is not requested to be annulled before issuing an enforcement decision. On a legal level, this argument has no basis. The law does not provide that obligation belongs to the judgment creditor, and the judgment enforcement agency is not given the authority to request such a confirmation. The examination of whether or not a petition for annulment of an arbitral award is the responsibility of the judgment enforcement agency, with appropriate professional measures to ensure compliance with the law.
The request to provide a written confirmation from the court can be considered an extra-legal "codification", leading to the situation that the judgment enforcement agency sets up an unnecessary pre-inspection mechanism on its own. This invisibly reduces the significance of arbitration as an independent, effective and alternative method of dispute resolution to the court. Because if you have to rely on the court's confirmation, the arbitral award will no longer be final at the time of promulgation as the original will of the legislator. As a result, the interests of the winning party are delayed, and the losing party has more time to disperse or hide the assets, affecting the ability to recover the judgment enforcement obligation.
This problem reflects a larger reality: the mechanism to support the enforcement of arbitral awards in Vietnam is still inconsistent and has not been properly recognized by competent state agencies. Instead of promoting the effectiveness and efficiency of arbitration, many procedures also carry a heavy control mindset as for court proceedings. This is contrary to the spirit of the Law on Commercial Arbitration and the policy of encouraging arbitration recorded in Vietnamese law.
Premise for the losing party to delay judgment enforcement
In addition to causing difficulties for the winning party, the above request of the judgment enforcement agency also becomes a premise for the losing party to delay the judgment enforcement. Specifically, the process of enforcing the arbitral award in fact also faces another noteworthy problem, which is the abuse of the right to request a postponement of judgment enforcement or request the court to cancel the arbitral award from the losing party. According to Article 68 of the Law on Commercial Arbitration 2010, the request for annulment of an arbitral award is only made on the basis of limited and specific grounds. This is a mechanism to protect fairness and ensure that arbitral awards are in accordance with the legal order of Vietnam. However, the reality shows that there are many cases where the losing party has taken advantage of this right as a strategy to delay the performance of its obligations, even if there is no solid legal basis to prove that the arbitral award was violated.
Department of Civil Judgment Enforcement of Ho Chi Minh City. Source: Thanh Nien Newspaper.
As a result, the arbitral award, which was supposed to be enforced immediately, was suspended for a considerable period of time. And in many cases, the party requesting judgment enforcement is forced to fall into a state of "waiting in indefinite" just because the court has to conduct the process of reviewing the application for annulment of the arbitral award according to the procedural order. An important point is that the Commercial Arbitration Law does not stipulate that the filing of a request for annulment of an arbitral award will automatically lead to a postponement of judgment enforcement. However, due to the lack of a specific and uniform guidance mechanism, stakeholders often take advantage of this embarrassment to slow down the process of organizing judgment enforcement. The problem becomes even more serious when considering the actual impact of delays, which can come from assets being transferred, changing the status quo, or even disappearing from the "control" of the judgment enforcement agency. The winning party, even if it has an arbitral award in hand, is still at risk of never "recovering" its rights. At that time, the most important goal of commercial arbitration is to protect the legitimate, prompt and effective interests of the disputing parties has been completely nullified.
It is necessary to remove bottlenecks at the judgment enforcement stage soon
From the above two issues, it can be seen that risks in the judgment enforcement stage are the factors that make businesses and investors, especially foreign investors, continue to be concerned when choosing arbitration as a dispute resolution mechanism in Vietnam. A method that is expected to be flexible, professional and effective is dependent on administrative procedures and the perception of applying the law is not consistent. To overcome these shortcomings, it is necessary to change from many sides. First of all, the judgment enforcement agency needs to be properly and fully aware of the immediate enforcement effect of the arbitral award. Any additional requirements that are not provided for by law, such as the requirement for written confirmation by the court, should be removed. At the same time, it is necessary to develop a mechanism for direct information exchange between the judgment enforcement agency and the court to check whether or not a petition for annulment of an arbitral award without interrupting the interests of the winning party.
At the same time, the legal provisions related to the right to request the cancellation of arbitral awards and the mechanism for postponement of judgment enforcement also need to be amended in the direction of limiting the abuse of the rights of the losing party and clearly defining specific cases and conditions leading to the suspension of judgment enforcement. Only when the law ensures transparency, clarity and consistency in application can commercial arbitration truly become a reliable and effective dispute resolution channel for the business community.
An arbitral award should not only be a document expressing legal victory but must be a tool to ensure practical effectiveness. The legal corridor on arbitration in Vietnam has been designed relatively fully and in accordance with international practices. The remaining problem is that the enforcement process needs to be synchronous, consistent and respect the spirit of the law. At that time, commercial arbitration will bring into full play its value as a civilized and modern dispute resolution method, contributing to building a more stable and attractive business environment for domestic and foreign investors.
Lawyer Nguyen Nhat Duong
HM&P Law Firm
Read more: Cần sớm gỡ bỏ nút thắt trong thi hành phán quyết trọng tài
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