Vietnamese law, consistent with the New York Convention 1958 (“NYC“), adopts a pro-enforcement framework for foreign arbitral awards. Domestic courts are not empowered to re-examine the merits of disputes decided by arbitral tribunals; instead, judicial review is confined to narrowly defined grounds, largely procedural in nature.
This article builds on our earlier discussion of the Supreme People’s Court’s Decision No. 03/2023/KN-KDTM in our June 2024 article titled “Vietnam Supreme Court Upholds Recognition and Enforcement of ICC Arbitral Award in Landmark Decision“, which reaffirmed a pro-enforcement approach to foreign arbitral awards in Vietnam. While that decision underscored judicial restraint at the highest level, recent case law suggests that questions remain as to how lower courts apply NYC-type grounds in practice.
Against that background, this article takes a closer look at how those grounds are applied and why the boundary between legality review and impermissible merits review may be tested in certain cases – particularly where objections are based on public policy and, to a lesser extent, due process. It also notes a recent regulatory development concerning arbitration within Vietnam’s International Financial Centre that may further reinforce the policy direction towards finality and restrained court intervention.
Finally, we offer practical guidance for parties to an arbitration across contract drafting, during the arbitration, and at the enforcement stage.
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