Besides Court, Arbitration is a form of commercial dispute settlement that businesses have the right to choose. However, not all disputes can be settled at Arbitration. So what are the conditions for disputes settlement by Arbitration?
1. Regarding the form of disputes settlement by Arbitration
Commercial arbitration is a form of disputes settlement agreed upon by the parties and conducted in accordance with the laws.
In particular, the Arbitration agreement is completely independent of the contract. Change, extension, cancellation of the contract, invalidity or unenforceability of the contract does not invalidate the Arbitration agreement.
In case of disputes settlement by Arbitration, the Arbitration award is final and takes effect from the date of issuance.
2. Principles of disputes settlement by Arbitration
Disputes settlement by Arbitration must comply with the following principles:
– Firstly, Arbitrators must respect the parties agreement if such agreement neither breaches prohibitions nor contravenes social ethics.
– Secondly, Arbitrators must be independent, objective and impartial and shall observe law. This principle is very important because it can affect the correctness, accuracy and enforceability of the Arbitral award.
– Thirdly, Disputing parties are equal in their rights and obligations. The arbitration council shall create conditions for disputing parties to exercise their rights and fulfill their obligations.
– Fourthly, Dispute settlement by arbitration shall be conducted in private, unless otherwise agreed by the parties. This principle stems from the confidentiality nature of arbitration and from the need to protect business secrets and the reputation of traders. This can be considered one of the biggest advantages that makes Arbitration a popular form of disputes settlement.
– Fifthly, Arbitral awards are final. This means that the arbitration award will not be appealed or protested and is binding on the parties.
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3. Conditions for disputes settlement by Arbitration
a. There must be an arbitration agreement between both parties
Only resolve disputes by Arbitration if the parties have an Arbitration Agreement.
The parties have the right to make an agreement on disputes settlement by Arbitration for disputes that may arise or have arisen. This means that the arbitration agreement can be made before or after the dispute arises.
The Arbitration Agreement may be established as a provision in a contract or in the form of a separate agreement. The arbitration agreement must be established in writing or equivalent forms as follows:
– The agreement is established through communication between the parties by telegram, fax, telex, email and other forms;
– The agreement is established through exchange of written information between the parties;
– The agreement is recorded in writing by a lawyer, notary public or competent organization at the request of the parties;
– In the transaction, the parties refer to a document showing the Arbitration Agreement;
– Through the exchange of the complaint and self-defense statement, the existence of the agreement is shown by one party and not denied by the other party.
It should be noted that the Arbitration agreement will be completely independent of the contract. Even if the two parties change, extend, cancel the contract, or the contract is invalid or cannot be performed, arbitration agreement will not be invalidated.
b. In case a party to the arbitration agreement who is an individual dies or loses legal capacity, the arbitration agreement remains valid for that person’s heirs or legal representatives, unless the parties have other agreements.
c. In case a party in the arbitration agreement is an organization that must terminate its operations, go bankrupt, dissolve, consolidate, merge, divide, separate or convert its organizational form, the arbitration agreement will still be effective over the organization that takes over the rights and obligations of that organization, unless the parties agree otherwise.
- Law on Commercial Arbitration 2010;
- Decree 01/2014/NQ-HĐTP.
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