VIAC and CIETAC cohosted the Seminar on International Arbitration: Facilitating China and Vietnam Trade and Investment

HANOI, Vietnam – On the afternoon of May 8, the Vietnam International Arbitration Centre (VIAC) and the China International Economic and Trade Arbitration Commission (CIETAC) cohosted the Seminar on “International Arbitration: Facilitating China & Vietnam Trade and Investment.

The seminar focused the current trade and investment landscape between China and Vietnam, as well as assessing the impact of international arbitration on cross-border investment and trade activities between the two countries. The seminar featured speakers from both VIAC and CIETAC, as well as lawyers and economic experts. The seminar also had the presence of nearly 150 participants, including lawyers, legal professionals, representatives from enterprises, business associations, educational institutions, and media units in Hanoi.

Dr. Vu Tien Loc – Chairman and President of VIAC, Deputy cum Member of the Economic Committee of the Vietnam National Assembly delivered his opening remark in the Seminar

In his opening remark, Dr. Vu Tien Loc - Chairman and President of VIAC, Deputy cum Member of the Economic Committee of the Vietnam National Assembly, shared that in recent years, both economies have faced significant challenges due to the pandemic, trade tensions, and the disruptions in global supply chains. Despite these risks and the downturn in global trade, the trade and investment relationship between Vietnam and China has remained resilient and maintains its robust development momentum.

Notably, the Regional Comprehensive Economic Partnership Agreement (RCEP), which officially entered into force on January 1, 2022, significantly impacts regional economic integration in general, and Vietnam - China economic cooperation in particular. The entry into force of RCEP has created new opportunities for businesses in both Vietnam and China to participate more in new regional chains of value and production.

 According to Dr. Loc, to support sustainable bilateral trade and investment, lawyers and associations need to focus more on supporting and guiding businesses and investors in proactively preventing and managing contractual risks, and effectively handling disputes in commercial transactions and investment activities. This would promote trade and investment flows between the two countries.

"In this context, international arbitration has gained worldwide recognition as an effective method for resolving cross-border disputes”, emphasized Dr. Vu Tien Loc.

Dr. Vu Tien Loc also expressed his gratitude to CIETAC for their cooperation in this seminar. VIAC looks forward to maintaining the cooperative relationship with CIETAC, with both organizations continuing to collaborate and support each other in future events.

Mr. Wang Chengjie - Vice President and Secretary General of the China International Economic and Trade Arbitration Commission (CIETAC)

Mr. Wang Chengjie - Vice President and Secretary General of the China International Economic and Trade Arbitration Commission (CIETAC), shared insights from CIETAC's dispute resolution practices. He began by highlighting the strong bilateral cooperation between Vietnam and China. In recent years, China has remained Vietnam's largest trading partner and second-largest export market, while Vietnam has also emerged as China's largest trading partner in ASEAN.

"Risks can arise at any point in time in economic and trade cooperation. But ultimately, regardless of the type, it can be categorized as a legal risk, ultimately" emphasized Mr. Wang Chengjie. 

In addition, he shared insights on different scenarios in which risk can arise in CIETAC's dispute cases and presented the advantages of arbitration as a dispute resolution method. The CIETAC representative also expressed a desire for further cooperation with VIAC in the future to contribute to the economy, society, and trade cooperation between Vietnam and China.

The Seminar commenced with a panel discussion on the Introduction of Arbitration Systems in Vietnam and China. Representing VIAC to share about the arbitration system in Vietnam, Mr. Vu Anh Duong – Permanent Vice President cum Secretary General of VIAC stated that the legal framework on arbitration in Vietnam was first established and developed in the early 2000s with the 2003 Ordinance on commercial arbitration being the first. Subsequently, the Law on Commercial Arbitration in 2010 was developed based on theoretical analysis, practical experience from the application of the Ordinance and the incorporation of the core principles of the Model Law on International Commercial Arbitration of the United Nations Commission on International Trade Law (UNCITRAL).

Mr. Vu Anh Duong – Permanent Vice President cum Secretary General of VIAC

Mr. Vu Anh Duong also shared that commercial arbitration and other Alternative Dispute Resolutions (ADRs) are increasing in popularity and have had positive contributions to promoting cross-border trade as one of the most important criteria to ensure contract enforcement. International arbitration plays a neutral role, resolving commercial disputes without the need for civil procedures in national courts. In addition, arbitration is a resolution with advantages in terms of confidentiality, time and cost efficiency and its arbitral awards are recognized and enforced in over 170 member states of the 1958 New York Convention.

In recent years, VIAC has seen an increase in the number, value and complexity of disputing cases. Cases involving enterprises with investment capital from China or of Chinese nationality have always been among the leading foreign disputing parties at VIAC. The areas of disputes in these cases are often related to transactions for the sale of goods, manufacturing, construction, logistics, etc.

Ms. Lu Fei - Director of CIETAC Business Development Division also introduced the China International Economic and Trade Arbitration Commission (CIETAC) with the attendees. CIETAC, similar to VIAC, is the first arbitration organization in China and is associated with the formation and development process and important milestones of Chinese arbitration system. With its longstanding history, CIETAC has built a professional dispute resolution system that is constantly perfecting and staying up-to-date with international arbitration trends as well as expanding its network in many regions domestically, regionally, and globally.

Ms. Lu Fei – Director of CIETAC Business Development Division

In China, the current Law on Arbitration was first issued in 1994 adopting the basis of the UNCITRAL Model Law. Most recently, in 2021, the Chinese Ministry of Justice promulgated the latest Draft for comments on the Revision of the Arbitration Law. This Draft has continuously identified, selectively adopted and learned from the practice of international arbitration and the changes in policy and law in China in the past thirty years.

Following these presentations, a panel discussion was moderated by Mr. Phan Trong Dat – Acting Director of Vietnam Mediation Centre (VMC), a division of VIAC. The discussion focused on dispute management experiences within the specific context of each country’s arbitration system, as well as the response to the practice of receiving and resolving disputes. Moreover, the speakers also had a Q&A session to answer questions from the attendees regarding their presentations.

Mr. Phan Trong Dat – Acting Director of Vietnam Mediation Centre (VMC), a division of VIAC

As the leading dispute resolution institution in each legal/judicial system, VIAC and CIETAC have always prioritized improving, upgrading, and perfecting the arbitration services, researching and developing other ADR services, such as mediation, combining mediation and arbitration, the appointment of experts, etc. The two parties have also caught up with the digital transformation surge by implementing technology in dispute resolution activities. Recognized by APEC as a dispute resolution organization, CIETAC has launched a CIETAC-APEC Online Dispute Resolution Platform. The platform has integrated online dispute resolution services to provide mediation and arbitration services for resolving cross-border commercial disputes between small and medium-sized enterprises. And regarding VIAC, in the upcoming June, will officially launch their first online case management platform. Thus, together with MedUp – an Online Mediation platform previously launched by the Vietnam Mediation Center (VMC), a division of VIAC, VIAC will soon offer both digital and traditional in-person mediation and arbitration services.

Continuing the Seminar, Mr. Phan Duc Hieu – Member of the Standing Committee of the National Assembly's Economic Committee, VIAC’s listed Arbitrator, along with the experts discussed and answered questions from the attendees regarding the challenges in cross-border investment and response strategies. Mr. Hieu acknowledged that as trade and investment relations increase, transactions become more complex, and disputes are more likely to arise due to differences in political systems, legislation, and languages.

Panel discussion on Challenges in Cross-border Investments and Coping strategies

Sharing his insight on the matter, Mr. Nguyen Duy Linh – Partner at Vietnam International Law firm (VILAF), pointed to a number of major legal risks, such as risks that arise from the choice of law, and the incompatibility of regulations, instability and incompletion in policies or the lack of uniformity in the applicable law.

Numerous shortcomings remain in the recognition and enforcement of foreign arbitral awards and the judgment of foreign courts when implemented. In addition, there is a risk of disputes arising between the Vietnamese Government and foreign investors. Mr. Linh commented that if the application and interpretation of laws in the dispute resolution process lack impartiality, a dispute can arise between the Vietnamese government and foreign investors. For instance, since the year 2004 up to the present, there have been 11 disputes arising between foreign investors and the Vietnamese government, with 2 out of the 5 ongoing cases involving Chinese contractors.

Proposing solutions to prevent disputes, Dr. Nguyen Thi Thu Trang – Director of WTO Centre & Economic Integration, Vietnam Chamber of Commerce and Industry (VCCI), advised enterprises to carefully assess the contract terms before signing and implementing the transaction thoroughly. She emphasised the importance of contract drafting comprehensive and clear as well as anticipated potential risks. Additionally, she recommended considering appropriate dispute resolution mechanisms in case a dispute arises. According to Ms. Trang, once a dispute occurs, enterprises should take into account arbitration, mediation, or the dispute resolution mechanism that the parties have agreed on.

Representing CIETAC, Mr. Wang Haocheng – Deputy Secretary General of CIETAC Hong Kong Arbitration Center, also agreed that enterprises in international business must focus on understanding their partner and thoroughly examining the regulations of the countries where they are conducting investment and business activities. On the other hand, it is also necessary to carefully review and research related legal issues in the contracts' drafting, concluding, and implementing process. At the same time, they should consider seeking legal consulting services, building a prevention and dispute resolution mechanism and choosing an appropriate dispute resolution method in order to proactively strategize a clear action plan and avoid being passive when disputes arise.

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