“Seat of Arbitration” and “Place of Arbitration” – What Do They Mean in Vietnamese Law?

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In international arbitration, the determination of the “seat of arbitration” is important since the law of the country where the seat of arbitration is located will generally govern the arbitration proceeding. In addition, international arbitration rules distinguish the seat of arbitration from the place of arbitration which is the physical place where the hearings take place. In Vietnam, the Commercial Arbitration Law 2010 does not contain a clear definition of “seat of arbitration” and “place of arbitration”.

Section 3.8 of the Commercial Arbitration Act 2010 provides that:

Place of dispute resolution means the place where the arbitral tribunal shall proceed with the resolution of disputes as agreed by the parties, or as decided by the arbitral tribunal if the parties have not entered into such an agreement. If the place of dispute resolution is in the territory of Vietnam, then the award is deemed to have been made in Vietnam besides the fact that the place where the arbitral tribunal holds the hearing to render the award”

There are three places shown in the layout above:

(1) venue for dispute resolution (địa điểm giải quyết tranh chấp);

(2) the place where the award is made (nơi phán quyết được tuyên); and

(3) the place where the arbitral tribunal holds the hearing.

It is unclear which of the above three locations will be considered the seat of arbitration under Vietnamese law. It would be more reasonable to consider the place where the award is rendered as the seat of the arbitration. This is due to the fact:

· the expression “where the award is made” is the same as that used in the 1958 New York Convention on the recognition of foreign arbitral awards;

· the drafting team’s proposal for the Commercial Arbitration Act 2010 explains that the place of dispute resolution is the place of arbitration; and

· The Vietnamese Code of Civil Procedure 2015 also refers to the country where the award is made when considering the grounds for rejection of a foreign arbitral award seeking recognition. For example, under the Vietnamese Civil Procedure Code 2015, Vietnamese courts can reject a foreign arbitral award if the arbitration procedure relating to that award does not comply with the law of the country where the award is made. In this context, the country where the award is rendered must be the country of the seat of the arbitration.

Despite the arguments above, the Supreme Court’s guidance from the Commercial Arbitration Act 2010 suggests that the venue for dispute resolution is a legal concept and not a physical one. This seems to indicate that the place of dispute resolution could also be a seat of arbitration.

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