INDEX

Introduction

1. Legal Recognition of Arbitration of Foreign Investment Disputes in Vietnamese Legal System

1. Legal recognition of arbitration by the Law on Foreign Investment
2. Legal recognition of arbitration by international agreements with foreign countries on the promotion and protection of investment

2. Vietnamese arbitration law applicable for foreign investment disputes

1. Source of the arbitration law
2. Arbitration Agreement
3. Arbitration Proceedings
4. Domestic arbitral awards
5. Foreign arbitral awards

3. Vietnam International Arbitration Centre

1. Its character
2. Its power
3. Its monopolistic position

4. Arbitration process in the Centre

1. Request for arbitration
2. Choice and Appointment of Arbitrators
   1. Sole Arbitrator or Three Arbitrators
   2. System of Choice and Appointment of Arbitrator by the Parties
3. Submission of Statement of Defense
4. Pre-hearing Inquiry
5. Hearing
6. Decision basing on only Writings
7. Counter Claim
8. Challenge of Arbitrators
9. Standard of Tribunal's Judgment
10. Production and Notification of the Award
11. Effect of the Award
12. Amicable Settlement in the Course of Arbitration Proceedings

1. Rapid Reform of the Legal System and Accessibility to the Latest Legal Information
2. Ambiguity in Choosing the Arbitral Organization
3. Ambiguity on the Center's Jurisdiction or Competence
4. Limitation on the Choice of Arbitrators in the Centre's Arbitration
5. Ambiguity of Standards of Arbitrator's Judgment
6. Arbitrator's Power to Order Security for Arbitration Fees of the Centre
7. Problems of Ad-hoc Arbitration
8. Difficulty in Enforcing Domestic Arbitral Awards
9. Conciliation under Arbitrator's Guidance

Introduction

In line with the promotion of Doi Moi (Open Door) Policy started in Vietnam in 1986, the first version of the Law on Foreign Investment was enacted in 1987. Following such improvement of investment environments for foreign capital, foreign investment into Vietnam has been steadily increasing.

In the stage of negotiation or drafting of a contract on foreign investment, it is an important factor to be considered as a part of investment environments what kind of resolution measures is available for investment disputes as well as how each measure works effectively. Especially during the materialization of foreign investments, it should be a serious question for foreign investors how effectively disputes arising from their investments can be settled by those dispute resolution measures in the host country.

This article however discussed mainly on the arbitration process in the Vietnam International Arbitration Centre (hereinafter referred to as "the Centre") in considering the importance of arbitration as the resolution measure of foreign investment disputes and the fact that the Centre actually monopolized arbitration of foreign investment disputes in Vietnam. The importance of the Centre's arbitration is clearly shown in the fact that 34 and 47 foreign investment disputes were referred to the Centre's arbitration in 1994 and 1995(1).

The author's research on the Centre's arbitration was conducted in April, 1995 and March, 1996 in kind and through assistance of Prof. Dr. Dao Tri Uc, Director of The Institute of State and Law in Hanoi. But the error in this article, of course, is the author's own, and this article is based on the information available for the author in March, 1996.

Legal Recognition of Arbitration of Foreign Investment Disputes in Vietnamese Legal System




Legal recognition of arbitration by the Law on Foreign Investment

The basic and most important law regulating foreign investment in Vietnam is the Law on Foreign Investment in Vietnam(2). Its Article 25 provides for as follows and recognizes arbitration in the latter part.

"Article 25 Any dispute between the partners arising out of a business co-operation contract or a joint venture contract as well as any dispute between a joint venture or an enterprise with 100 per cent foreign capital and Vietnamese economic organization or between enterprises with foreign invested capital shall first be resolved through mutual consultation and amicable settlement. If, however, the parties to a dispute fail to reach an amicable settlement, the dispute shall be referred by the parties' agreement to a Vietnamese economic arbitration organization, or any other arbitration organization or other dispute resolution board having legally enforceable power."

Under this provision, the latter part of Article 100 of Decree(3) of the Government on Implementing Regulations of the Law on Foreign Investment provides for arbitration of foreign investment disputes arising from a joint venture agreement as follows,

"In case the dispute fails to be settled by conciliation, the parties may select by their agreement one of the following forms of arbitration: - arbitration by a Vietnamese arbitration organization, or an arbitration organization of a third country, or an international arbitration organization. - arbitration by a panel of arbitrator(s) established by the parties' agreement prior to the dispute."

Judging from these provisions, it could be said that Vietnamese legal system admits that foreign investment disputes are referred to the institutional arbitration by a Vietnamese arbitration organization or by a foreign arbitration organization of a third country or by an international arbitration organization, or to an ad-hoc arbitration, and that the arbitration of wide range is legally recognized for foreign investment disputes in Vietnam.




Legal recognition of arbitration by international agreements with foreign countries on the promotion and protection of investment

Vietnam has concluded with some foreign governments international agreements on the promotion and protection of investment and some agreements have a provision providing for legal recognition of arbitration.

For instance, the Agreement Between Australia and S.R. Vietnam on the Reciprocal Promotion and Protection of Investments of 5 March 1991 ��13(b) includes the following provision:

"Vietnamese economic entities are free to select foreign arbitration when in dispute with an Australian foreign investor."





Vietnamese arbitration law applicable for foreign investment disputes




1. Source of the arbitration law
   Statutory provisions providing for arbitration can be seen only in the above-mentioned Law on Foreign Investment, its relating laws and regulations, and international agreements with foreign governments on the promotion and protection of investment. Any arbitration law has not been enacted, nor is there any statutory provision on arbitration in the Code of Civil Procedure. Therefore, Vietnamese legal system of arbitration of foreign investment disputes is quite in-complete at this stage.

   Regarding international conventions, Vietnam has ratified the New York Convention(4) on 27 September 1995, and the New York Convention came into force on 27 December 1995.

   In order to implementing the New York Convention the Ordinance on the recognition and enforcement of foreign arbitral awards in Vietnam was promulgated by the Order No.42-L/CTN of 27 September 1995(5) . This Ordinance provides for a set of detailed procedures which are applicable for the recognition and enforcement of foreign arbitral awards.

   However other multi-national convention on arbitration such as the ICSID Convention(6) has not yet ratified.

   
   

   Arbitration Agreement

   The formation of an arbitration agreement shall be subject to the general principles of the contract law under the Civil Code which was enacted on 9 November 1995, since there is no particular law providing for it. It therefore could be construed that an arbitration agreement is not required to be in writing or in any particular form as there is no provision requiring them in the Civil Code.

   Legal effects of an arbitration agreement are not clear, either, as there is no statutory provision on it. But the author was explained by the Vietnamese officials(7) that an arbitration agreement not only has the general legal effects as a contract, but also is admitted to be an demurrer in the court litigation practice. Therefore even if one of the parties to an arbitration agreement takes an action in a court in violation of the arbitration agreement, the action will be rejected by the court if the other party alleges that the dispute should be referred to arbitration according to the arbitration agreement.

   
   

   Arbitration Proceedings

   There is no statutory provision for arbitration proceedings of foreign investment disputes. Consequently only the arbitration rules of the Centre regulate arbitration proceedings in the Centre.

   Even if the court's cooperation for arbitration proceedings is needed for production of evidence or examination of witnesses, no effective cooperation can be expected, as the court cannot promptly decide on the question and will keep it shelved owing to the lack of statutory provisions on these issues(8) .

   
   

   Domestic arbitral awards

   There is no statutory provision applicable for domestic arbitral awards. Therefore, the formation and legal effects of arbitration award are not clear.

   As to the enforcement of domestic arbitral awards, the author was explained by Vietnamese officials(9) that no practical method of enforcement exists under the present circumstances, since there is no statutory provision for the enforcement proceedings.

   
   

   Foreign arbitral awards

   A foreign arbitral award for which the Ordinance on the recognition and enforcement of foreign arbitral awards in Vietnam is applicable is recognized its legal validity in Vietnam and to be enforced by Vietnamese courts according to the procedure under the Ordinance.

   If there is a provision regarding foreign arbitral awards in a bilateral agreement which Vietnam is a party to, a foreign arbitral award under the bilateral agreement will be recognized to be valid in Vietnam and enforce-able in Vietnam, pursuant to the provision of the bilateral agreement.

   On the contrary in case of a foreign arbitral award for which neither the above Ordinance nor bilateral agreement is applicable, its enforcement will be difficult in Vietnam.





Vietnam International Arbitration Centre




Its character
The Centre is a permanent arbitral organization, which was established by the Prime Minister's decision(10) made in 1993 and its certificate of in-corporation is also provided for by the Prime Minister's decision. It is not an independent corporation and is formally attached to the Vietnam Chamber of Commerce and Industry (hereinafter referred to as "the Chamber"), which is an independent corporation.
Although the certificate of incorporation expressly provides for that it is non-governmental, it could be considered to be a kind of national institution indirectly controlled by the government since it is a lower organization annexed to the Chamber and is under the control of the Chamber.
The headquarters of the Centre is located in the Chamber's headquarters in Hanoi and the branch is also located in the Chamber's branch in Ho Chi Minh City. Its income from arbitration being small, it totally depends on the Chamber for both its finance and personnel.


Its power
The certificate of incorporation of the Centre provides for its power, that is, what kind of disputes it can accept, in respect of both the nature and the parties.
At its start the power of the Centre was quite limited. Its power only covered the disputes which arose from international economic relations, such as foreign trade contracts and contracts concerning investment, tourism, international transportation and insurance, transfer of technology, services, international credits and payments, etc. and where one of the parties was a foreign national or a foreign corporation or all the parties were foreign nationals or foreign corporations(11) .
However the Prime Minister's decision of 16 February 1996 on extension of jurisdiction over disputes of Vietnam International Arbitration Centre(12) extended the power of the Centre over disputes arising from domestic business transaction, in case the parties have agreed to submit their dispute to the Centre's arbitration. Consequently the Centre's power covers both international and domestic business disputes in the present circumstances.
It is submitted that this is an important improvement of the Centre's arbitration for foreign investors. Because this improvement made it possible for foreign investors to refer not only international but also domestic disputes in Vietnam to the Centre's arbitration. Before this improvement in the case where a dispute arose between a joint venture corporation or a 100% foreign corporation incorporated as a Vietnamese corporation and a Vietnamese corporation or a Vietnamese natural person, the dispute was out of the power of the Centre and could not be submitted to the Centre's arbitration under the previous certificate of incorporation.


Its monopolistic position
As mentioned above, Vietnamese legal system legally recognizes various types of international and domestic arbitration for foreign investment disputes. But at present the Centre is the only arbitral organization operating in Vietnam and enjoying its monopolistic position.
It is unclear if the incorporation of a private arbitral organization is legally possible in Vietnam, as there is no statutory provision for it. So far there has been no plan to incorporate a private arbitral organization in Vietnam, and one of the reasons for which was that its financial success could not be prospected.
Although foreign arbitral organizations or international arbitral ones are not prohibited to operate in Vietnam, for the present no foreign or international arbitral organization has obtained the governmental approval for its representative office. Moreover, although it is possible that LCIA establishes a Vietnamese domestic institution or ICC organizes a Vietnamese domestic committee, there has been no movement for it so far.





Arbitration process in the Centre




Since there is almost no applicable statutory provision, the arbitration process in the Centre has no choice but to depend on the Arbitration Rules of the Centre(13) at the present circumstances.
Request for arbitration
The arbitration proceedings shall be instituted with a request for arbitration by the plaintiff to the Centre under Article 4 ( Hereinafter Article means that of the Arbitration Rules of the Centre ). The request for arbitration should fulfill the requirements under Article 5, but may be written in the Vietnamese language or in a foreign language widely used in international transactions (English, French, Russian) under Article 5.
It is unusual but not required to attach a written document proving the existence of an arbitration agreement to the request for arbitration(See Article 5). This follows a construction that an arbitration agreement can be entered into prior to or after the occurrence of the dispute and that an oral arbitration agreement is valid in Vietnam, It however is submitted that this point should be made more clear in the future.
On filing the request for arbitration, the plaintiff should make an advance payment of the total amount of the arbitration fee payable under the "Schedule of Arbitration Fees and Costs of the Vietnam International Arbitration Centre and Expenses of the Parties" annexed to the Centre's Arbitration Rules, in the way provided for in Article 7.


Choice and Appointment of Arbitrators
Sole Arbitrator or Three Arbitrators
If both parties have agreed to a sole arbitrator, the case is heard by the tribunal of the sole arbitrator. But without such an agreement the arbitrators chosen by each party must jointly elect a third arbitrator from the listed arbitrators of the Centre and the case is heard by the tribunal of the three arbitrators. (Article 9)
Should twice the arbitrators chosen by each party fail in the choice of the third arbitrator, the President of the Centre must appoint the Chairman of the arbitral tribunal, within fifteen days from the date on which the second arbitrator is chosen so as to constitute the arbitral tribunal (Article 9). This is to prevent the delay of arbitration proceedings even if the arbitrators chosen by each party cannot smoothly elect the third arbitrator.
System of Choice and Appointment of Arbitrator by the Parties
The plaintiff, at the time of the submission of a request for arbitration, and the defendant, within the period for the submission of the statement of defense, must respectively choose an arbitrator from the listed arbitrators of the Centre or request the President of the Centre to appoint an arbitrator on his behalf. Should the defendant fail to make such choice or request within the period, then the President of the Centre must appoint the arbitrator for him (Article 5 and 8). This is to prevent the defendant from delaying the arbitration proceedings by refusing the choice of an arbitrator.
The list of the listed arbitrators of the Centre can be obtained from the Centre. At present 11 persons are listed, as shown in the attached list at the end of this article, but all of them are Vietnamese. The personal information of these listed arbitrators is not open to the public, but the information can be provided orally, if inquiry is made to the Centre. The author has been given an explanation that it is now being planned to have foreigners listed as the arbitrators, but the time is not decided.
The party electing an arbitrator from the listed arbitrators of the Centre usually makes his decision in the following process. After getting the list of the listed arbitrators from the Centre, he will have an interview with the candidate whom he hopes to refer the dispute to and explain to him the outline of the dispute to obtain his informal consent to be appointed as the arbitrator. If the party one-sidedly makes a choice, the candidate often refuses to be appointed as the arbitrator on the grounds that he is busy or that the dispute is out of his specialty.
When the President of the Centre is requested to appoint an arbitrator by the party, he can appoint a suitable person as the arbitrator not only from the listed arbitrators but also from the persons not listed there.


Submission of Statement of Defense
The statement of defense from the defendant, in principle, must be submitted to the Centre within thirty days from the date of receipt of a copy of the request for arbitration. But at the request the defendant, this time-limit may be extended up to 2 months(Article 8).


Pre-hearing Inquiry
The arbitrators are required, after being chosen or appointed and before the beginning of the first hearing, to proceed with a study of the file of the dispute and conduct an inquiry by all appropriate means.
In the inquiry the arbitrators have the right to personally meet the parties for their verbal statements at the request of either or both of them or on their own initiative. Moreover, the arbitrators may collect the relevant information from other persons either in the presence of the parties or in the absence of the parties after notifying them (Article 14).


Hearing
The date of hearing is decided by the Chairman of the arbitral tribunal constituted by arbitrators (Article 16).
The hearing in principle takes place in Hanoi. But at the request of the parties or where it is deemed necessary, the Chairman of the arbitral tribunal can decide nother location in the territory of Vietnam for the hearing (Article 18).
The hearings are conducted in the Vietnamese language, but the parties can request the Centre to provide interpreters at their own expenses(Article 22).
The parties can attend the hearing either personally or through their authorized representatives with power of attorney issued in due form. Such representatives can be Vietnamese citizens or foreigners (Article 19). Not only Vietnamese attorneys but also foreign ones are qualified to be the representatives in the Centre's arbitration(14) .
In the absence of one or all of the parties without any legitimate reason, the arbitral tribunal or the sole arbitrator, as the case may be, can proceed with the hearing on the basis of available documents and pieces of evidence (Article 20).
All disputes are heard in private, but with the consent of the parties the arbitral tribunal can allow persons not involved in the dispute to attend the hearing (Article 24).
The record of the proceedings must be made by the secretary appointed for the hearing and bear the signature of the Chairman of the arbitral tribunal or the sole arbitrator (Article 26).


Decision basing on only Writings
If the parties so request or accept, the arbitral tribunal or the sole arbitrator can make a decision on the basis of the file of the dispute in the parties' absence (Article 21).


Counter Claim
During the sitting of the arbitral tribunal, the defendant can lodge a counter claim and the counter claim must be heard together with the original request for arbitration (Article 13).


Challenge of Arbitrators
Either of the parties has the right to challenge an arbitrator or the Chairman of the arbitral tribunal or the sole arbitrator, as the case may be, if the challenging party has doubt about his impartiality, or particularly if the challenging party contends that he is directly or indirectly related to the dispute.
Any challenge must be subject to examination and decision by the other members of the arbitral tribunal who are not challenged. Should those members fail to reach a mutual agreement or should the two arbitrators or the sole arbitrator be challenged, the President of the Centre must make examination and decision. If the challenge is sustained, new arbitrators or a new Chairman of the arbitral tribunal or a new sole arbitrator must be chosen or appointed in accordance with the present rules (Article 11).


Standard of Tribunal's Judgment
The arbitral tribunal or the sole arbitrator, as the case may be, must settle the dispute on the strength of the terms and conditions of the original contract, if the dispute arises from relations thereunder, in accordance with the law applicable to it and with any related international treaty, taking into account the trade usage and international practice. In the hearing process, the arbitrators must judge the matter in their own interpretation, objectively and honestly (Article 23).
Any decision of the arbitral tribunal must be made by a majority vote. When there is no majority, the Chairman of the arbitral tribunal must make the decision as a sole arbitrator. The minority opinion, however, must be duly recorded (Article 25).


Production and Notification of the Award
The arbitral tribunal must produce an arbitral award fulfilling the requirements under Article 28 and announce it immediately at the end of the arbitral tribunal's sitting or some day later. But the full text of the award, in principle, must be notified to the parties at least within 30 days from the date of the end of the arbitral tribunal's sitting (Article 29).


Effect of the Award
Any award made by the arbitral tribunal is final and, therefore, cannot be appealed before any other law court or organization. The parties involved must carry out the award within the specific period of time. Moreover, if the award is not voluntarily carried out within the specific period of time, effective measures of enforcement will be applied, in accordance with the law of the country where enforcement of the award is sought and with international treaties applicable to the case (Article 31).
However, as mentioned above, if Vietnam is the country where the enforcement of the award is sought, the enforcement is actually impossible, since at the moment Vietnam has no law regulating the enforcement of the arbitral award.


Amicable Settlement in the Course of Arbitration Proceedings
If, in the course of proceedings at the Centre, the parties reach a direct amicable settlement, the arbitral tribunal ceases the proceedings thereafter. The parties can, however, request the President of the Centre to confirm in writing the amicable settlement. Any such confirmed settlement is valid as an arbitral decision (Article 35).

Conclusion - Some Remaining Problems




As the conclusion of the above examination and discussion on the arbitration process under the Centre's Arbitration Rules, the followings are submitted to be important remaining problems from the viewpoint of foreign investors.


Rapid Reform of the Legal System and Accessibility to the Latest Legal Information
We must pay attention to the fact that Vietnam has been rapidly switching to market economy and thoroughly reforming its legal system to cope with it. It would never be an exaggeration to say that its legal system is changing at every moment.
Nevertheless, the latest information on Vietnamese law is not always easily available for foreign investors, since legal magazines or journals have not been issued enough and universities, research institutions, law firms, etc. are also under development. Especially English materials are quite limited. Therefore, it is advisable at this stage to try to always keep one's own information source (especially one's own human network) for collecting the latest information on arbitration in Vietnam. A rapid improvement is hoped on this point.


Ambiguity in Choosing the Arbitral Organization
Although Vietnamese legal system, as described above, legally recognizes the arbitration of wide range concerning foreign investment disputes, there remains some ambiguity in these provisions. For instance, it is not obvious what is meant by "a third country". If one of the parties is a multinational enterprise, it is not clear whether such countries related to its operation are all excluded as non-third countries or only the country where its head office is located is excluded.
It is also not clear what is the international arbitration organizations. International Chamber of Commerce (ICC) seems to be considered as one of them since there is a case where a joint venture agreement providing for arbitration by ICC was approved by Vietnam Government. But it is still unclear if it means only ICC or if it includes London Court of International Arbitration (LCIA) and the like.
Further it is obscure whether a foreign arbitration organization having an cooperation agreement with a Vietnamese arbitration organization will be given a special status.
In addition what should be noted is that a legally recognized arbitral organization other than a Vietnamese one is that of a third country or an international one, but excluding that of a foreign investor's home country.
Consequently a foreign investor cannot directly utilize an arbitral organization of his own country and if he tries to realize that in some way, he has to take an indirect measure, such as to establish a foreign subsidiary company outside his own country for the investment in Vietnam and choose an arbitral organization of his own country (formally an arbitral body of a third country) for the dispute resolution of the investment made through the subsidiary company. For example, a Japanese company establishes a subsidiary company in Singapore for the investment in Vietnam and the subsidiary company names a Japanese arbitral organization in the joint venture agreement made between the subsidiary company in Singapore and the other party in Vietnam.


Ambiguity on the Center's Jurisdiction or Competence
The Centre's jurisdiction or competence over the dispute is given by Decision No.204/TTg dated 28 April 1993 of the Prime Minister and expanded by Decision No.114/TTg dated 16 February 1996 of the Prime Minister. Its present jurisdiction or competence therefore covers the disputes arising not only from international economic relation but also from domestic business transactions.
However there is not authoritative definition on what is "international economic relation" and "domestic business transactions". It is not clear what is the difference between economic relation and business transaction.
This kind ambiguity is problematic for arbitration. If there occurs the parties' difference of opinion on the problem whether their dispute belongs to the Centre's jurisdiction at the beginning of arbitration process, the arbitration procedure could not be started without solving this problem. However there is no statutory provision on this issue and also no specific provision in the Centre's Arbitration Rules.
It accordingly is submitted that this ambiguity should be noted by foreign investors and resolved as soon as possible so as to improve the Centre's arbitration.


Limitation on the Choice of Arbitrators in the Centre's Arbitration
The arbitrators and the third arbitrator must be chosen or appointed from the listed arbitrators and at present there are only Vietnamese in the list. Therefore, there is a limitation that foreign arbitrators cannot be chosen and appointed, even if it is desired by the parties.
The problem is not the nationality of the listed arbitrators but the quality of arbitral awards in the Centre, because at the moment there are not so many arbitrators who have enough experience of international transactions, and are familiar with the international practice, and also have enough legal knowledge. So far in Vietnam international transactions have been done mainly with former socialist countries and not with the countries of market economy. This means that the listed arbitrators are not always to fit for the arbitration of disputes arising from the international transactions between Vietnamese parties and those of industrialized countries of market economy.
It would be idealistic, if the arbitrators could be chosen freely. At least it is desired that the Centre lists in its list a lot of foreign arbitrators and widens the range of the choice of arbitrators as much as possible.


Ambiguity of Standards of Arbitrator's Judgment
Since under the present situation of the Centre it is not easy for foreign investors to choose the arbitrator(s) who has fully experienced international transactions and has a good knowledge of the practice, it is necessary to present clear standards of judgment to the arbitrators in order to ensure a due and proper arbitral award in the Centre's arbitration.
In this respect it is noticeable that Article 23 provides for that "the arbitral tribunal or the sole arbitrator ... shall settle the dispute on the strength of the terms and conditions of the original contract, if the dispute arises from relations thereunder" .
It therefore seems that if there are applicable provisions in the investment contract, arbitrators are obliged to give them the top priority as the standards of judgment in the Centre's arbitration. This interpretation is not yet officially confirmed by the Centre and there still remains the ambiguity which is hoped to be made clear by the revision of the Centre's Arbitration Rules in the nearest future..
In the connection it also should be noted that a proper and careful drafting is very important for an investment contract in Vietnam.


Arbitrator's Power to Order Security for Arbitration Fees of the Centre
The plaintiff must make an advance payment of the total amount of the arbitration fee to the Centre. However it is not clear under the Centre's Arbitration Rules whether the arbitrator has the power to order, at the request of the plaintiff, the defendant to give security for the payment of the arbitration fee, in the case where there is the possibility that the defendant can not pay the arbitration fee which he is ordered to pay in the arbitral award. There is no statutory provision on this point and construction on this issue is not obvious, either.
Moreover, since at present the arbitral award itself cannot be enforced, we have to keep it in mind that it is probable that not only claimed amount but also arbitration fees cannot be collected.
Consequently at least it is necessary to clearly stipulate in the arbitration agreement the arbitrator's power to order the defendant to give security for arbitration fees.


Problems of Ad-hoc Arbitration
In Vietnam ad-hoc arbitration is possible. But, as described above, at present, there is no provision of law regulating ad-hoc arbitration proceedings and even when cooperation of the court is needed in order to produce evidence or examine witnesses, effective cooperation cannot be expected, as the court cannot promptly decide on the question and will keep it shelved owing to the lack of statutory provisions on these issues.
Consequently it should be noted that in case of ad-hoc arbitration in Vietnam it is quite likely for the parties to encounter difficulties which they never expect, unless in their arbitration agreement the parties precisely provide for the arbitration proceedings in details or make an agreement to apply an established arbitration rules, such as the UNCITRAL. Arbitration Rules.
Such being the case if foreign investors choose arbitration in Vietnam as the resolving method of their contracts disputes, the Centre's arbitration is more recommendable than ad-hoc arbitration in Vietnam.


Difficulty in Enforcing Domestic Arbitral Awards
Although the recognition and enforcement of foreign arbitral awards for which the New York Convention or bilateral international agreements are applicable already became possible in Vietnamese courts, they still keep a negative attitude to the enforcement of domestic arbitral awards including the Centre's arbitral awards on the ground that there is no provision of law regulating the enforcement proceedings. This is a big remaining problem of Vietnamese legal system. It is ironical that the Centre's arbitral awards are not enforceable in Vietnam but are enforceable in such foreign countries which are contracting countries of the New York Convention.
It therefore should be noted this issue if the Centre's arbitration is selected as a dispute resolution measure of the foreign investment in Vietnam. Arbitration in foreign contracting countries of the New York Convention is more preferable or recommendable for foreign investors than the Centre's arbitration since such foreign arbitral awards are enforceable but the Centre's arbitral awards is not enforceable in Vietnam in the present situation.


Conciliation under Arbitrator's Guidance
Article 35 could be interpreted that it admits a direct conciliation between the parties but does not cover a conciliation under the guidance of the arbitrator or the arbitral tribunal.
In actual arbitration cases the parties often reach a conciliation under the guidance of the arbitrator or the arbitral tribunal and there is no reasonable reason to treat such conciliation differently form the direct conciliation.
Accordingly it is submitted that the Centre's Arbitration Rules should be revised to cover a conciliation under the guidance of the arbitrator or the arbitral tribunal.

* Professor of Law, Graduate School of International Development (GSID), Nagoya University, Japan

1. These figures were shown by Mr.Tran Huu Huynh, Secretary of The Vietnam International Arbitration Centre.
2. The first original version was enacted on 29 December 1987, and was amended twice in 1990 and 1992.
3. Degree of the Government No.18-CP dated 16 April 1993.
4. Convention on the recognition and enforcement of foreign arbitral awards, New York, 10 June 1958.
5. This Order's official English version is attached as Appendix I.
6. Convention on the settlement of investment disputes between states and nationals of other states, Washington, 18 March 1965.
7. Mr.Vu Manh Hong, Chief Justice, Economic Court of Supreme People's Court in Hanoi and Mr.Tran Huu Huynh, Secretary of The Vietnam International Arbitration Centre.
8. Explanation by Mr.Vu Manh Hong, Chief Justice, Economic Court of Supreme People's Court in Hanoi.
9. Mr.Vu Manh Hong, Chief Justice, Economic Court of Supreme People's Court in Hanoi and Mr.Tran Huu Huynh, Secretary of The Vietnam International Arbitration Centre.
10. Decision of the Prime Minister of the Government No.204/TTG, 28 April 1993
11. Articles 2 and 3 of the Centre.
12. This decision is attached as Appendix II.
13. This decision is attached as Appendix III.
14. Explanation by Mr.Tran Huu Huynh, Secretary of The Vietnam International Arbitration Centre.