VIAC Rules of Arbitration 2017 - The Highlight

18/03/2017 11:02

On February 3, 2017, Viet Nam International Arbitration Centre (VIAC) has released the Rules of Arbitration – 2017 edition (the Rules 2017). This is the new Rules of Arbitration which shall enter into force as from March 1, 2017 and replace the previous edition of 2012.

The three highlights in the Rules 2017 that are worth mentioning include the provisions on multiple contracts (Article 6), consolidation of arbitrations (Article 15) and expedited procedure (Article 37). Overall, these three new provisions consistently involve dispute arising out of separate legal relationship, which helps save time, costs and effort of the parties – target of every arbitration user.

Specifically, Article 6, “Claims arising out of or in connection with more than one contract may be made in a single Request for Arbitration to be resolved in a single arbitration, irrespective of whether such claims are made under one or more than one arbitration agreement.” With this new provision, VIAC has met the need of the parties, especially the claimant, in revolving dispute arising from multiple contracts which are related to each other and/or fall under a group of transactions. For example, in the case where seller and buyer enter into several sale contracts, when there is a breach of contractual obligations in some of the signed contracts, the infringed party can now submit its claims in one request for arbitration at VIAC.

Article the 15 provides that: “1. Parties may agree to consolidate two or more arbitrations pending under these Rules into a single arbitration. The Centre shall decide on whether the arbitrations are consolidated upon its consideration on relevant matters. 2. Unless otherwise agreed by the parties, the arbitrations shall be consolidated into the arbitration that commenced first.” Similar to Article 6, Article 15 allows the parties to resolve their disputes arising from separate contractual relationships, but the difference is that these disputes has commenced arbitral proceedings separately and the parties wish to resolve them in one arbitration. This new provision of the Rules resolves procedural issues of the related arbitrations, especially with respect to the disputes that involve multiple parties, has complicated nature and related merits. Take credit agreement or loan contract which involves three parties (bank, borrower and guarantor) as an example. In this event, instead of pursuing two separate arbitration against the borrower and guarantor as before, the bank can now request to consolidate them into one arbitration if there is agreement of the parties.

These two provisions not only meet the need of reality but also comply with the current regulations on commercial arbitration. Clause 4 Article 7 of the Resolution number 01/2014/NQ-HĐTP of the Judge Panel under Supreme Court regarding consolidation of arbitrations as follows: “The consolidation of dispute arising from multiple legal relationships to resolve in one single arbitration happens in the following circumstances: a) the Parties agree to consolidate their disputes; b) the Rules of Arbitration provides for consolidation of arbitration.” Thus, with the new provisions of the Rules 2017, parties can now resolve different disputes of different legal relationships in one arbitration without referring to the law.

It can been seen that the resolution of different disputes in one arbitration in accordance with Article 6 and 15 helps parties save a considerable amount of costs of arbitration which is previously regarded as a drawback compared to litigation cost at the court. Furthermore, this technique also allows the Arbitral Tribunal to consider the matters more carefully and comprehensively and thus render a more fair and convincing award.

In addition to these two highlights, the Rules 2017 also provides for an expedited procedure in Article 37. This procedure may include decreased number of arbitrator (01 sole arbitrator instead of 03 arbitrators as normal), decreased time limits in normal proceedings and hearing via teleconference or videoconference. This provision is especially beneficial to the parties to disputes which has simple nature and clear legal issues, helps save time and costs while pursuing an arbitration at VIAC, save effort, travelling and accommodation expenses of foreign parties and/or arbitrators (if any).

In summary, the release of the Rules 2017 is a positive sign aiming to improve arbitral proceedings as well as the quality of arbitration service at Vietnam International Arbitration Centre in particular and in Vietnam in general. This promises to facilitate both domestic and foreign enterprises in their business activities and fair competition.

Lawyer - Arbitrator Dao Ngoc Chuyen


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