Recently, in Vietnam, Arbitration dispute settlement has been developed solidly alongside the reform of the judicial system of Vietnam in the system of the Courts and the Procuracies which help to achieve a sane and fair judicial system.

However, misunderstanding on the jurisdiction between Arbitration and the Court has resulted in many arbitration agreements being inconsistent with Vietnamese law as well as the judicial practices. This misunderstanding indirectly raises numerous issues for the parties and wastes their time in determining which agencies have jurisdiction over the dispute.

Arbitration jurisdiction

Arbitration has jurisdiction to resolve disputes (i) between parties arising from commercial activities, (ii) which have at least one party has commercial activities, or (iii) which are required by law; and the parties had an arbitration agreement.

In cases of subsistence of the arbitration agreement, but a party brings an action before the Court, the Court shall refuse to accept it unless the arbitration agreement is invalid or impracticable.

Solving conflict of jurisdiction between Arbitration and the Court

When resolving the above-mentioned disputes, the Court shall determine whether the parties had an arbitration agreement. The Court must also review the documents attached to the petition to determine whether the Court has jurisdiction over the dispute even regardless of the subsistence of an arbitration agreement between the parties.

On a case-by-case basis, the Court will handle as follows:

• In case the parties did not have an arbitration agreement; or there was a legally effective judgment, a decision of the Court, or a legally effective Arbitral decision, award which held that agreement arbitration did not exist; the Court shall accept and settle the dispute according to its jurisdiction.
• In case the dispute has a valid arbitration agreement, the court shall return the petition and attached documents, evidence to the plaintiff. If the Court discovers that the parties had a valid arbitration agreement after accepting the case, the Court shall terminate the case, return the petition and attached documents to the plaintiff.
• In case there was a request for Arbitration to resolve the dispute, and the arbitral Tribunal has been resolving that dispute, the Court shall return the petition to the plaintiff even though (i) the Court finds that arbitration does not have jurisdiction; (ii) there is no arbitration agreement; or (iii) arbitration agreement is invalid, but the plaintiff requests the Court to settle the dispute. If the Court has accepted the dispute, the Court shall terminate the dispute unless the Court accepted the dispute before the request for arbitration. After the decision of the Arbitral tribunal, the plaintiff requests the Court to settle the dispute, the court shall accept and settle the dispute according to civil procedures.

Disputes which have arbitration agreement fell into one of the following cases shall be settled by the Court (unless otherwise agreed by the parties or provided by law).

• There was a Court decision to annul arbitral award, arbitral tribunal’s decision on the recognition of the parties’ agreement.
• There was a decision of the arbitral Tribunal, the arbitration Center to terminate the dispute settlement.
• The parties agreed to settle the dispute at a specific arbitration Center, but that Center was terminated without a successor arbitration organization, and the parties could not agree on the selection of an alternative arbitration Center to resolve the case.
• The parties reached a specific agreement on the selection of the ad hoc Arbitrator, but at the time of the dispute, because of force majeure events or objective obstacles that Arbitrator could not participate in the dispute settlement, or Arbitration Center, the Court could not find appropriate Arbitrator as agreed by the parties and the parties could not agree on the selection of alternative Arbitrator.
• The parties reached a specific agreement on the selection of the ad hoc Arbitrator, but at the time of the dispute, that Arbitrator refused to be appointed or arbitration Center refused to appoint the Arbitrator, and the parties could not agree on the selection of alternative Arbitrator.
• The goods, services supplier and the consumer had an arbitration agreement which was recognized in the general conditions for the supply of goods, services prepared by the supplier, but when a dispute occurred, the consumer does not agree to choose Arbitration to settle disputes.

In case the parties reached an agreement to settle the dispute by Arbitration and also had an agreement to settle the dispute by the Court, but the parties did not have a re-agreement or a new agreement on the competent agency when the disputes occurred (without falling into the cases analyzed above).

• In case the plaintiff requested Arbitration to settle the dispute before asking the Court to settle the dispute; or requested Arbitration to resolve the dispute when the Court has not yet accepted the case, the Court shall refuse to accept the case. In this event, upon receiving the petition, the Court must return the petition. If the Court has accepted the case, it shall terminate the case because the dispute is not under the jurisdiction of the Court, so it must return the petition and attached documents.
• In case the plaintiff requests the Court to settle the dispute, right after receiving the petition, the Court must determine whether one of the parties has requested Arbitration to settle the dispute.
• Within 05 working days from the date of receiving the petition, if the Court determines that the defendant, the plaintiff has requested Arbitration to settle the dispute, the Court shall return the petition to the plaintiff. If the defendant, the plaintiff has not requested Arbitration to settle the dispute, the Court shall accept the settlement according to general procedures.
• In case the Court has accepted the case but discovers there was a request for Arbitration before the Court accepts the case, the Court shall terminate the case since it is not under the jurisdiction of the Court, and then return the petition and attached documents.

This article contains legal knowledge and technical terms, for readers who have questions about this area of expertise, please contact our lead trial lawyer Mr. Stephen Le (hoangchuong.le@letranlaw.com). Mr. Stephen Le has participated in resolving many commercial disputes at the Vietnam International Arbitration Center (VIAC) and participated in international dispute cases together with many foreign lawyers at the Singapore International Arbitration Center (SIAC).