CONDITIONS AND COMPETENCE OF PERMANENT ARBITRATION IN THE LAW ON COMMERCIAL ARBITRATION 2010 COMPARED WITH COMMERCIAL ARBITRATION ORDINANCE 2003

Legal basis:

Law on Commercial Arbitration 2010;

Commercial Arbitration Ordinance 2003.

1. What is permanent arbitration?

Permanent arbitration is defined in Article 3.6 of the Law on Commercial Arbitration 2010 as follows: “Permanent arbitration means the form of dispute resolution at an arbitration center under the provisions of this Law and the procedural rules of such arbitration center.”

Permanent arbitrations under Vietnamese law are organized in the form of arbitration centers. According to Article 23 of the Law on Commercial Arbitration 2010: “The arbitration center shall have the function of organizing and coordinating activities of dispute resolution by permanent arbitration, and of assisting arbitrators by providing administrative and office facilities and other assistance during the process of the arbitration proceedings.”

Thus, permanent arbitrations are organizations established in the form of centers, organizations, or associations: having a tight organizational structure; have a fixed headquarters to operate regularly; has its charter and rules of arbitration; exists independently with all the legal signs of a legal entity, of which the most important sign is having its property and being responsible with its property.

2. Permanent arbitration on the Law in Commercial Arbitration 2010 and the Commercial Arbitration Ordinance 2003.

2.1 Same points

(i) Applicable conditions: the parties must have an arbitration agreement before or after a dispute occurs;

(ii) Form of the arbitration agreement: a clause in a contract or a separate written agreement;

(iii) Cases of the invalid arbitration agreement: The dispute arises in a sector outside the competent of arbitration, the person who entered into the arbitration agreement lacked authority as prescribed by law, the person who entered into the arbitration agreement lacked civil legal capacity pursuant to the Civil Code, the form of the arbitration agreement does not comply with regulations, one of the parties was deceived, threatened or coerced during the process of formulation of the arbitration agreement and requests a declaration that the arbitration agreement is invalid.

2.2 Difference points

Criteria	Permanent arbitration	The arbitral tribunal is established at the arbitration centre
Scope of authority	Regulations are clearly and have a broader scope, including disputes between parties arising from commercial activities, disputes arising between parties at least one of whom is engaged in commercial activities, other disputes between parties which the law stipulates shall be resolved by arbitration (Article 2 of the Law on Commercial Arbitration 2010)	Unclear regulation and the scope is narrower: commercial activities are regulated in Article 2.3 of the Commercial Arbitration Ordinance 2003.
Dispute subject	Without limitation, as long as the parties have an agreement and this dispute arises from commercial activities.	Business organization or individual
Form of the arbitration agreement	Forms considered to be in writing: - An agreement established via an exchange between the parties by telegram, fax, telex, email or other form prescribed by law; - An agreement established via the exchange of written information between the parties; - An agreement prepared in writing by a lawyer, notary or competent organization at the request of the parties; - Reference by the parties during a transaction to a document such as a contract, Source document, company charter or other similar documents which contain an arbitration agreement; - Exchange of a statement of claim and defense that express the existence of an agreement proposed by one party and not denied by the other party. (Article 16.2 of the Law on Commercial Arbitration)	Forms considered to be in writing: An arbitration agreement through the mail, telegram, telex, fax, email or other written form which clearly shows the will of the parties to settle the dispute by arbitration. (Article 9.1 of the Commercial Arbitration Ordinance 2003)
The arbitration agreement is invalid	The arbitration agreement breaches a prohibition prescribed by law (Article 18.6 of the Law on Commercial Arbitration). (The Law on Commercial Arbitration has abolished Article 10.4 of the Commercial Arbitration Ordinance 2003 because the new law allows the parties to renegotiate when the arbitration agreement is unclear, if no agreement is reached, the plaintiff has the right to choose (Article 43.5 of Commercial Arbitration Ordinance 2003) to prevent and reduce the nullity of arbitration agreements or the absence of anybody to resolve the dispute)	The arbitration agreement does not stipulate or stipulates the unclearness object of the dispute, the arbitration organization has the authority to settle the dispute, which the parties have not subsequently agreed to supplement (Article 10.4 of the Commercial Arbitration Ordinance 2003).
Conditions for the Court to refuse to accept the dispute	Where the parties in dispute already have an arbitration agreement but one party institutes court proceedings, the court must refuse to accept jurisdiction unless the arbitration agreement is void or incapable of being performed (Article 6 of the Law on Commercial Arbitration 2010).	For a dispute has an arbitration agreement, if one party initiates a lawsuit at the Court, the Court must refuse to accept it unless the arbitration agreement is invalid (Article 5 of the Commercial Arbitration Ordinance 2003).