One of the fundamental characteristics of commercial arbitration as a dispute resolution method is the finality of arbitral awards. Under Clause 5, Article 61 of the 2010 Law on Commercial Arbitration (the “LCA”), an arbitral award takes effect from the date it is issued and is not subject to appeal through appellate procedures as a court judgment would be. However, in order to safeguard the legality of the arbitral proceedings and to protect public order, the law still provides disputing parties with a limited mechanism of judicial supervision: the right to request a court to set aside an arbitral award.

Grounds for setting aside an arbitral award

Under Clause 2, Article 68 of the LCA, an arbitral award is set aside if it falls into one of the following five cases:

No arbitration agreement exists, or the arbitration agreement is invalid

If no arbitration agreement exists, or one exists but is invalid under Article 18 of the LCA (for example: the dispute arises in a field outside arbitral jurisdiction, the person who agreed lacked civil act capacity, the form of the agreement fails to comply with statutory requirements, or the agreement was entered into as a result of unlawful deception, threat, or coercion), then the Arbitral Tribunal lacked jurisdiction to resolve the case from the outset, and an award rendered on that basis has no legal value.

The composition of the Arbitral Tribunal or the arbitral procedure was inconsistent with the parties’ agreement or contrary to the LCA

This ground protects the parties’ autonomy to determine how the arbitral proceedings are organized (the number of arbitrators, the method of selecting/appointing arbitrators, the language, the seat of arbitration, etc.), as well as ensuring compliance with the mandatory procedural requirements of the LCA. The violation must be serious and must substantively affect the lawful rights and interests of the party requesting the setting-aside; not every formal or procedural irregularity results in an award being set aside.

The dispute falls outside the jurisdiction of the Arbitral Tribunal

Where an award contains content that exceeds the jurisdiction of the Arbitral Tribunal, or resolves matters outside the scope of the arbitration agreement, the portion exceeding that jurisdiction is set aside. The law expressly provides that this ground may be applied to set aside only the part exceeding jurisdiction, without necessarily setting aside the entire award, provided the remaining part can be separated independently.

The evidence supplied by the parties on which the Arbitral Tribunal relied to render the award was falsified; or an arbitrator received money, property, or other material benefit from a disputing party in a manner affecting the objectivity and fairness of the award

This is a ground rooted in “procedural fraud,” protecting the integrity of the arbitral process. The party requesting the setting-aside must prove a causal link between the fraudulent conduct (falsified evidence or an arbitrator’s receipt of a material benefit) and the content of the award

The arbitral award is contrary to the fundamental principles of Vietnamese law

This is a broadly framed ground, reflecting a public-order reservation mechanism similar to the grounds for refusing recognition and enforcement of foreign arbitral awards. In judicial practice, this is also the most commonly invoked ground, yet at the same time the most controversial, due to the lack of clear criteria for what constitutes a “fundamental principle of Vietnamese law.” In principle, courts should apply this ground cautiously and restrictively, only where the award violates legal principles that are foundational and core to the legal system (for example, the principles of equality, good faith, and consistency with social ethics).

Procedure for requesting the setting-aside of an arbitral award

Eligible parties and the application

The right to request the setting-aside of an arbitral award belongs to the disputing parties (claimant, respondent) who participated in the arbitral proceedings. The application must be filed within 30 days from the date of receipt of the arbitral award — the time limit runs from the date the requesting party actually received the award, not the date the award was drafted or issued. Where the requesting party can prove that filing beyond this deadline was due to a force majeure event, the period during which the force majeure event existed is not counted toward the above 30-day time limit.

The application must be accompanied by documents and evidence proving that the invoked ground for setting-aside is well-founded and lawful.

• The application to set aside an arbitral award must contain the principal contents required under civil procedure law for applications for resolution of civil matters, including (without limitation): the date of the application; the name and address of the requesting party and of related parties; the legal basis and factual grounds for the request; and the specific relief sought by the applicant.
• The application must be accompanied by: the original or a duly certified copy of the arbitral award; and the original or a duly certified copy of the arbitration agreement.

Jurisdiction and procedure for resolution at court

Under Article 7 of the LCA (as amended and supplemented), the court with jurisdiction to consider an application to set aside an arbitral award is the People’s Court of the locality where the Arbitral Tribunal rendered the award (under current regulations, this is the competent regional People’s Court with corresponding territorial jurisdiction).

Procedure for handling the application:

After accepting the application, the court is responsible for promptly notifying the Arbitration Center or the arbitrators of the Arbitral Tribunal that heard the case, the disputing parties, and the People’s Procuracy at the same level.

Within 7 working days from the date of accepting the application, the Chief Justice of the court appoints a panel of three judges to consider the application, one of whom serves as the presiding judge as assigned by the Chief Justice.

Within 30 days from the date of appointment, the panel must hold a hearing to consider the application to set aside the arbitral award. The court is responsible for transferring the case file to the People’s Procuracy at the same level for review within 7 working days before the hearing date, so that the Procuracy may attend the hearing.

At the hearing, the panel considers and decides based on the provisions of Article 68 of the LCA and the accompanying documents — it does not re-examine the substance of the dispute already resolved by the Arbitral Tribunal. After hearing the opinions of the persons summoned (if any) and the opinion of the procurator representing the Procuracy, the panel deliberates and decides by majority vote.

The panel has the authority to issue one of two decisions: to set aside, or not to set aside, the arbitral award. The court’s decision is final and takes immediate effect.

Suspension mechanism to allow correction of procedural errors

A notable feature of the LCA is the mechanism allowing a temporary suspension to correct errors in an arbitral award before it is set aside: at the request of a party, and where it considers this appropriate, the panel may suspend consideration of the application to set aside the award for a period not exceeding 60 days, to allow the Arbitral Tribunal to correct the procedural error, in the Arbitral Tribunal’s own view, to eliminate the ground for setting the award aside. The Arbitral Tribunal is responsible for notifying the court of the correction; if the Arbitral Tribunal does not carry out the correction, the panel continues considering the application under ordinary procedure.

This provision is also reflected in Article 45.3 of the VIAC Rules: while a court is considering an application to set aside an arbitral award, a party or the parties may petition the court to suspend its consideration so that the Arbitral Tribunal may take the measures or steps it considers necessary to eliminate the ground for setting aside the award — reflecting coordination between the institutional arbitration mechanism and the judicial supervision mechanism, aimed at preserving the value of the arbitral award to the greatest extent possible.