Decision No. 08/2021/QD-PQTT 

Claimant:  HTK Company Limited  

Stakeholders:  DTL Corporation  

Regarding: Request to annul arbitral award due to incomplete contract negotiation 

Case Summary 

On 12/12/2018, DTL issued the bidding dossier for package No. 11 of the content of procurement of imported coal for a trial run and operation of the expanded VT 4 thermal power plant.  HTK Company was granted a bid guarantee by the Joint Stock Commercial Bank for Investment and Development of Vietnam with a guaranteed value of VND 11,200,000,000 and won the bid.  On 14/4/2019, DTL sent an email to HTK Company drafting a coal supply contract, according to which the delivery plan remained the same as in the bidding dossier.  However, after many meetings, the parties could not agree on the delivery plan, so the two sides stopped negotiating the contract.   

On 23/5/2019, the Joint Stock Commercial Bank for Investment and Development of Vietnam sent a letter to HTK Company with the content of DTL complaining about HTK’s violation of the completion of the contract, and at the same time requesting the Joint Stock Commercial Bank for Investment and Development of Vietnam to transfer the bid guarantee to the DTL.  HTK Company has repeatedly sent written objections to the complaint of the DTL.  On 18/6/2019, DT sent a notice of bidding results of package No. 11 to HTK Company.  On 8/10/2019, HTK Company sent a letter to DTL expressing its opinion on the bid guarantee and requesting DTL to give feedback, stating that if DTL does not provide feedback before 11/10/2019, HTK Company will initiate a lawsuit at the Vietnam International Arbitration Center.  

On 18/10/2019, HTK Company initiated a lawsuit against DTL at the Vietnam International Arbitration Center. 

On 01/11/2019, the Joint Stock Commercial Bank for Investment and Development of Vietnam informed HTK Company that the Bank had debited HTK’s account to pay the bid guarantee for the DTL. HTK Company initiated a lawsuit to force DTL to pay a bid guarantee of VND 11,200,000,000. The legal consulting fee is VND 120,000,000.   The arbitration fee is VND 437,826,000.  The bank interest rate is VND 1,134,933,333. 

Arbitration award of dispute No. 62/19 dated 01/12/2020 of the Board of Directors of Vietnam International Arbitration Center. Refusing to accept HTK’s requests to DTL for the refund of the bid guarantee amount of VND 11,200,000,000.  Payment of the 80% legal consulting fee is VND 120,000,000 and the bank interest rate is VND 1,134,933,333. 

On 18/12/2020, HTK Company filed a petition to annul Arbitration Award No. 62/9 dated 01/12/2020 because the arbitral award violates the principle that arbitrators must comply with the provisions of law stipulated in the Law on Commercial Arbitration as one of the basic principles of Vietnamese law. The bidding contract is not based on the provisions of the bidding law, in Article 21 of Decree 63/2014/ND-CP and Article 12.1(g) of the Law on Bidding 2013, Article 3 of Circular No. 19/2015/TT-BKHDT.  Due to the delay in the bid evaluation process, HTK Company did not comply with the deadline for evaluating bids, and HTK Company did not violate when it failed to keep the delivery schedule. The judgment of the EIA does not respect the principle of freedom, voluntariness, and agreement of the parties as stipulated in Article 3.2 of the Civil Code 2015. During the contract negotiation period, on 23/4/2019, the two sides temporarily agreed on the delivery schedule from June to September 2019, but there were some contents that the two sides could not agree on such as arrival time, loading and unloading capacity… Due to the delay in evaluating bids, HTK Company no longer has goods to issue to DTL according to the agreed schedule on 23/4/2019. HTK Company proposed to change the delivery schedule differently from the original agreement, namely from September to December instead of from June to September 2019, but on May 13, 2019, TD proposed that the schedule should be from July to September 2019. Because the plan of DTL does not ensure the interests of HTK Company, HTK Company does not agree. Thus, the two parties voluntarily negotiated with each other on the delivery plan in accordance with the principles of the Code of Civil Procedure but could not agree. The Board of Directors did not respect the process and results of the agreement made in the last meeting on 13/5/2019. However, they still based their actions on the provisional agreement from 23/4/2019, which did not respect the freedom and voluntariness of the parties. The Board of Directors did not respect the will of the plaintiff and defendant during the negotiation stage when they believed that HTK Company offered a new delivery schedule that was not in accordance with the tender documents and commitments in the bidding documents.  DTL did not respect the factory’s test run plan, and proactively made delivery schedule requests that were not in accordance with the factory’s test run plan, so it had no right to request or accuse HTK Company of not following the factory’s test run plan.  

Stakeholders: HTK Company believes that due to the violation, HTK Company is not considered to have a violation when it fails to keep the delivery schedule as agreed by the parties is unfounded. During the entire proceedings at the arbitration, the DTL requested but HTK failed to provide a legal basis that HTK was entitled to change the supply plan according to the bid and that the change of the supply plan was not infringing. According to Point b, Clause 3, Article 14 of Decree No. 63/2014/ND-CP: “Any documents sent by the contractor after the time of bidding closure to amend and supplement the submitted bid dossier are invalid”.  The judgment of the Board of Directors has fully considered the opinions and recommendations of the parties and has shown the appropriate legal bases for bidding to settle the dispute, not violating the principle of freedom of voluntary agreement of the parties as prescribed. HTK’s reliance on one-sided judgments about the contents of the parties disagreed during the contract negotiation process to believe that the EIA violated the principles in Clause 2, Article 3 of the Civil Code 2015 is inappropriate and not true to the legal nature.  The will throughout the bidding and contract negotiation process is that the contractor must supply coal in accordance with the trial run plan of VT 4 Thermal Power Plant and in accordance with the commitments on coal supply proposed by the contractor in the bid dossier, but HTK has stated that it cannot supply coal over time proposed in the Tender Dossier, and that the proposal for the new coal supply plan is outside the time required by the Tender Dossier and the Tender Dossier.  

Representative of the People’s Procuracy. The application review panel has strictly complied with the procedural law, the litigant has fully exercised his rights and obligations as prescribed by law. The arbitral award has complied with the provisions of the law, so there are no grounds to accept the requesting Party’s request to annul the arbitral award.  

Judgment Of The Court 

The requesting party contends that the arbitral tribunal is not independent, impartial and objective based on the use of some inappropriate sentences in the judgment of the arbitral award is groundless, because the analysis and evaluation of the content of the case is the right of the arbitral tribunal. Today’s session panel finds that the arbitral tribunal uses the sentences and words are appropriate to the style to reflect the development of the case without violating the law, violating ethics, not showing the non-independence, impartiality and objectivity of the arbitral tribunal. The requesting party believes that the arbitral award violates the principle, does not respect the principle of freedom, voluntariness and agreement of the parties in the provisions of the Civil Code. The arbitral tribunal improperly applied the provisions of the Law on Bidding, Civil Law and Commercial Law to settle the case. In fact, the parties have not agreed on a specific delivery schedule because delivery plans are always changing. Because the DTL is at fault for violating the provisions of the Law on Bidding when carrying out the process of evaluating bids for package No. 11, it is proposed that the new delivery time of HTK Company is in line with the actual project implementation schedule of DTL and HTK Company is considered error-free as unfounded. The arbitration award in dispute No. 62/19 dated 01/12/2020 of the Vietnam International Arbitration Center established in Hanoi does not violate Clause 2, Article 68 of the Law on Commercial Arbitration. Therefore, HTK Company’s request to cancel the Arbitration Award in Dispute No. 62/19 dated 01/12/2020 is unfounded. 

Court Decision 

Do not accept the request of HTK Co., Ltd. to cancel the Arbitration Award in Dispute No. 62/19 dated 01/12/2020 of the Vietnam International Arbitration Center (VIAC). 

Legal basis 

Clause 2, Article 31, Article 414, Article 415 of the Code of Civil Procedure; Article 3, Article 68, Article 69, Article 71 and Article 72 of the Law on Commercial Arbitration;  Resolution No. 326/2016/UBTVQH14.