Vietnamese enterprises settle disputes by bringing cases to the court, while they do not have the habits of using economic arbitrators.

According to Hoang The Lien, Deputy Minister of Justice, while settlement disputes via arbitration proves to be a popular and favourite way in other countries, this is not considered an effective way in Vietnam. In the country, more than 95% of cases end up in court.

According to the Ministry of Justice, the commercial contracts of businesses all do not have the provisions on settling disputes through arbitration. Some of the contracts have provisions about arbitration, but they prove to be vague and difficult to be implemented. An official from the ministry said that even the very big national contracts, including the contract on purchasing aircrafts, also do not have detailed provisions on settling disputes through arbitration. This is very risky for the parties in the contract as there will be no clear mechanism on dispute settlement once disputes occur.

There are many reasons behind the situation, including the unclear legal framework and the habit of Vietnamese businesses of not using arbitration services, the non-state agencies. Besides, there are still problems with the qualification and practice of arbitrators.

However, Mr Lien said that once the market economy develops, arbitration services will become more popular and favoured by businesses. The Ministry of Justice has asked functional units to consider developing arbitration agencies.

There are six arbitration centres operational nationwide, and the number proves to be big if compared to many other countries, but the operation capability of the centres is not good enough. The centres are now lacking qualified experts and facilities for practising.

The International Arbitration Centre next to the Vietnam Chamber of Commerce and Industry is the only centre which has regular jobs to do. Every year, the centre deals with 20-30 cases, while other operational centres deal with 3-5 cases only a year, and some of them sit idle all the time.

The Ministry of Justice is undertaking many research works in order to find out the solutions to develop arbitration centres in Vietnam. This proves to be a very important task, as the building up of mechanism for dispute settlement is a part of the commitments Vietnam has made when joining WTO. In many agreements, Vietnam and partners have agreed to settle dispute through arbitration.

The ministry has found out that one of the work that needs to be done to develop the trade arbitration in Vietnam is to perfect the legal framework. Currently, the arbitration services are covered by the Arbitration Ordinance which was enacted in 2003. However, experts said that in the new circumstances, it is necessary to have the arbitration law.

Source: VietnamNet