Institution profile: VIAC (Vietnam)

Summary of findings

  • Number of arbitrations filed in 2017 doubled from 2011. This has been achieved through a steady annual increase.
  • The total amount in dispute reached an unusually high peak in 2014 with $255 million.
  • The number of domestic arbitration cases is much higher than the number of international arbitrations, although the number of both domestic and international arbitration is experiencing steady growth.
  • Sale of goods claims form the dominant sector of dispute, with virtually half of the arbitrations (48%) relating to this That could explain the high number of domestic cases. The construction sector is the second most arbitrated sector (17%).
  • China (including Hong Kong) dominates as the main country of origin of parties (25%), followed by Singapore (15.8%) and South Korea (14.7%). 41% of the parties originate from the Asia Pacific region (excl. China).

Snapshot of VIAC as an arbitral institution

By Vu Anh Duong, Vietnam International Arbitration Centre

The main driver that helps to develop the arbitration market in Vietnam is the determination of the Vietnamese government to bring Vietnam into an era of wide and comprehensive socio-economic integration (Vietnam has become the signatory of more than 16 new free trade agreements). Some of the key initiatives include:

  • Greater economic integration: Together with economic integration, the number of cross-border transactions increases exponentially; and arbitration as an internationally-accepted and preferred method of dispute resolution, hence, gradually is spread over, used and paid attention to, at first in disputes with foreign elements.
  • Harmonisation of domestic laws and international standards: As one of the commitments and efforts of the Vietnamese Government to make alternative dispute resolution mechanisms available to both foreign and domestic businesses, the legal framework for arbitration is built up with references from typical international standards (UNCITRAL Model Laws, UNCITRAL Rules of Arbitration, etc.), such as Vietnam Law on Commercial Arbitration 2010.
  • The pro-activeness of prominent arbitration institutions in the market: In Vietnam, VIAC is the first and most long-standing arbitral institution. VIAC is a pioneer in promoting the use of arbitration and contributing to promoting the awareness and the capacity of businesses (educating users) in using alternative dispute resolution as advanced dispute resolution methods. For that purpose, VIAC has contributed to completing the legislation on arbitration, especially, the drafting of the Vietnam Commercial Arbitration Law. Furthermore, VIAC has invested its resources to organise various conferences, seminars and training courses to businesses and international conferences; established international cooperation with prestigious arbitration institutions in the region as well as in the world to keep it on pace with the international trends.

The Government’s policy to encourage the use of arbitration for dispute settlement has worked quite effectively in practice. Increasingly, enterprises are aware of the advantages of arbitration and gradually have shifted to using arbitration as an alternative of the traditional choice of court litigation. Parties have better control over the arbitral proceedings. Using arbitration saves time and cost for disputing parties – according to statistics maintained by VIAC, the average duration of a VIAC arbitration proceeding is around 156 days while such duration at the Court is 400 days. the arbitration law has been improved; at the same time, the Court’s role in assisting and supervising arbitration is, day-by-day, getting better and better.

VIAC has established its reputation and credibility in the field of dispute settlement services as the arbitral institution providing arbitration services with international standards for the business community in Vietnam. In recent years, the growth rate of domestic cases outnumbers its foreign-related counterparts, which mostly reflects that arbitration at VIAC is more and more preferred by FDI enterprises.