Vietnam’s Code of Civil Procedure (CCP) provides that before any judgement, decision or foreign arbitral award of a foreign court or arbitration center (foreign court judgements or arbitral awards) to take effect in Vietnam, it is required to be approved by the Vietnamese Court and must be recognized and enforceable under the laws of Vietnam.
However, not all foreign court judgements or arbitral awards of said description will be accepted and considered by the Courts in Vietnam. Whether or not a particular judgement or arbitral award will be taken into consideration award depends on existing international treaties or diplomatic relations between Vietnam and the relevant nations. In principle, the Vietnamese Court will only recognize and enforce foreign court judgements or arbitral awards that are:
- In accordance with the provisions of international treaties signed and participated in by Vietnam;
- Based on a reciprocal agreement; and
- Compliant with the laws of Vietnam.
The Vietnam Ministry of Justice has recently published a database regarding the recognition and enforcement of foreign court judgements or arbitral awards in Vietnam from 2012 to September 30, 2019, (the Database), which indicates that only 49% of foreign court judgements or arbitral awards will be recognized and enforced in Vietnam. This figure sheds light on the alarmingly low rate of recognition and enforcement of foreign court judgements or arbitral awards in Vietnam.
There are two possible reasons behind this low rate of recognition. First, the foreign court or arbitration center may be of inadequate quality or has violated dispute resolution procedural regulations. A second reason to consider is that some provisions that frame the recognition and enforcement of foreign court judgements or arbitral awards by the CCP and the Vietnamese law on Commercial Arbitration may not be properly adhered to or contain vague language without guidelines.
On the international level, Vietnam recognizes and enforces foreign court judgements or arbitral awards based upon the Convention on the Recognition and Enforcement of Arbitral Awards 1958 (New York Convention 1958) and the provisions in Chapters XXXVI and XXXVII of the CCP 2015 (Chapters 26, 27, 28, and 29 of the CCP 2004, amended and supplemented in 2011).
Grounds to deny the recognition and enforcement of a foreign court judgement or arbitral award in Vietnam are stipulated by Articles 3, 4, and 5 of the New York Convention 1958, Articles 439 and 459 of the CCP 2015 (formerly Articles 356 and 370 CCP 2004, amended and supplemented in 2011).
The Database specifies that 05 out of the 26 foreign court judgements and 30 out of the 82 foreign arbitral awards are not recognized in Vietnam. The judgement or arbitral award may be denied for multiple reasons, including:
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