{"id":8760,"date":"2024-01-03T09:37:58","date_gmt":"2024-01-03T02:37:58","guid":{"rendered":"https:\/\/cdlaf.vn\/?p=8760"},"modified":"2024-05-29T08:09:59","modified_gmt":"2024-05-29T01:09:59","slug":"when-is-an-arbitration-agreement-unenforceable","status":"publish","type":"post","link":"https:\/\/cdlaf.vn\/en\/when-is-an-arbitration-agreement-unenforceable\/","title":{"rendered":"When is an arbitration agreement unenforceable?"},"content":{"rendered":"<p>In the Vietnamese legal system, besides the court, arbitration is also chosen by many parties to resolve disputes. This choice is usually recorded in the contract and is understood as an &#8220;Arbitration Agreement&#8221;. Currently, arbitration agreements are considered a flexible means to resolve disputes quickly and effectively. However, like any other solution, there are situations where the Arbitration Agreement cannot be executed.\u00a0 This is because, at the time of establishing the arbitration agreement, these agreements are already in a position where the law determines that &#8220;the arbitration agreement cannot be executed&#8221;. So when is the Arbitration Agreement unenforceable? Please join us in reviewing situations where arbitration agreements cannot be executed through the article below.<\/p>\n<figure id=\"attachment_8698\" aria-describedby=\"caption-attachment-8698\" style=\"width: 500px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-8698\" src=\"http:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/12\/pexels-wendy-wei-3345918_resize-640x800.jpg\" alt=\"\" width=\"500\" height=\"625\" srcset=\"https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/12\/pexels-wendy-wei-3345918_resize-640x800.jpg 640w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/12\/pexels-wendy-wei-3345918_resize-320x400.jpg 320w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/12\/pexels-wendy-wei-3345918_resize-768x960.jpg 768w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/12\/pexels-wendy-wei-3345918_resize-1229x1536.jpg 1229w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/12\/pexels-wendy-wei-3345918_resize-1639x2048.jpg 1639w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/12\/pexels-wendy-wei-3345918_resize.jpg 1676w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><figcaption id=\"caption-attachment-8698\" class=\"wp-caption-text\">Source: Wendi Wei<\/figcaption><\/figure>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of contents:<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #a32411;color:#a32411\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #a32411;color:#a32411\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/cdlaf.vn\/en\/when-is-an-arbitration-agreement-unenforceable\/#1_In_what_cases_is_the_Arbitration_Agreement_unenforceable\" >1. In what cases is the Arbitration Agreement unenforceable?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/cdlaf.vn\/en\/when-is-an-arbitration-agreement-unenforceable\/#2_Arbitration_agreement_in_disputes_with_consumers_and_actual_settlement_by_the_Court\" >2. Arbitration agreement in disputes with consumers and actual settlement by the Court<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/cdlaf.vn\/en\/when-is-an-arbitration-agreement-unenforceable\/#SEND_CONSULTATION_REQUEST\" >SEND CONSULTATION REQUEST<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"1_In_what_cases_is_the_Arbitration_Agreement_unenforceable\"><\/span>1. In what cases is the Arbitration Agreement unenforceable?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>According to procedural principles, when the parties have agreed that Arbitration is the dispute settlement body, then one party initiates a lawsuit in Court, the Court must refuse to accept the case, except in cases where the arbitration agreement is invalid or unenforceable. Unenforceable arbitration agreements are specified in the Law on Commercial Arbitration in the following cases:<\/p>\n<ul>\n<li>The parties have agreed to resolve disputes at a specific Arbitration Center, but this Arbitration Center has terminated operations without a successor arbitration organization, and the parties cannot agree on choosing an alternative Arbitration Center to resolve the dispute.<\/li>\n<li>The parties have had a specific agreement on choosing an ad hoc Arbitrator. Still, at the time of the dispute, due to force majeure events or objective obstacles, the Arbitrator cannot participate in the arbitration to resolve the dispute, or the Arbitration Center or Court cannot find an Arbitrator as agreed by the parties and the parties cannot agree on choosing alternative Arbitrator.<\/li>\n<li>The parties have had a specific agreement on choosing an ad hoc Arbitration, but at the time of the dispute, the Arbitrator refuses to be appointed or the Arbitration Center refuses to appoint an Arbitrator and the parties cannot agree on choosing an alternative arbitrator.<\/li>\n<li>The parties have an agreement to resolve disputes at an arbitration centre but the procedural rules of the arbitration centre differ from those of the chosen centre. This applicaiton is not allowed and can only be resolved if the partice can agree on on choosing alternative arbitration rulesSuppliers of goods and services and consumers have provisions on arbitration agreements recorded in the general conditions for the supply of goods and services prepared by the supplier as prescribed in Article 17 of the Law on Commerce. Still, when a dispute arises, the consumer does not agree to choose arbitration to resolve the dispute.<\/li>\n<\/ul>\n<p>In the above cases, the arbitration agreement related to a contract in which one party is a consumer is a situation that often arises in reality at the time of establishing the contract, which the parties often do not pay attention to. Accordingly, in this case, although at the time of establishing the contract, the consumer did not object to the arbitration clause, when an actual dispute arises, the arbitration clause will not be applied. By default, consumers have the right to choose the Court as the dispute settlement body. This is applied in some specific cases as in our analysis in section 2 below.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Arbitration_agreement_in_disputes_with_consumers_and_actual_settlement_by_the_Court\"><\/span>2. Arbitration agreement in disputes with consumers and actual settlement by the Court<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This issue is regulated in Article 38 of the Law on Protection of Consumer Rights as follows:<\/p>\n<p><strong><em>\u201cArticle 38. Effectiveness of arbitration clause<\/em><\/strong><\/p>\n<p><em>Organizations and individuals trading in goods and services must notify the arbitration clause before entering into a contract and obtain approval from consumers. If the arbitration clause is included in the form contract or general transaction conditions by an organization or individual trading in goods or services, when a dispute arises, the individual consumer has the right to choose another method of resolving disputes.\u201d<\/em><\/p>\n<p>According to the above clause, it is understood that the arbitration clause will be accepted if the goods or service provider notifies consumers to clearly understand the application of Arbitration as the dispute settlement body and consumers also agree. Then, in this case, Arbitration will be the chosen jurisdiction to resolve the dispute. When an arbitration clause is recorded in the form contract or general transaction conditions, Arbitration will be the dispute settlement body if the consumer agrees to choose Arbitration when an actual dispute arises.<\/p>\n<p>In reality, it is shown that when selling goods or providing services, most enterprises prepare contract templates to provide to customers, and this is also considered a &#8220;form contract&#8221; as mentioned above. Therefore, to ensure that the arbitration clause is applicable in the dispute without depending on the consumer&#8217;s consent, the supplier of goods or services should inform the consumer of the arbitration clause in the form contract and obtain the consent of the consumer. This process needs to be specifically recorded as a basis to determine that the consumer clearly understands the arbitration clause in the Form Contract, and agrees to choose Arbitration as the dispute settlement body. The issue regarding consumers&#8217; right to choose a dispute settlement body has been recognized in Case Law No. 42\/2021\/AL dated February 24, 2021.<\/p>\n<p><em>Quoting the content of the case law as follows:<\/em><\/p>\n<p><em>\u201c[9] Vacation ownership contract No. PBRC -S-064621 is a type of prepared contract issued by a service provider with a pre-written arbitration agreement. The plaintiff, who is the consumer, did not agree to choose an arbitrator and requested the People&#8217;s Court of Nha Trang City to resolve this. This is following Article 38 of the Law on Protection of Consumer Rights, Article 17 of the Law on Commercial Arbitration and guidance in Clause 5, Article 4 of Resolution No. 01\/2014\/NQ-HDTP dated March 20, 2014 of the Council of Judges of the Supreme People&#8217;s Court. Therefore, the People&#8217;s Court of Nha Trang City accepted and resolved the dispute within its jurisdiction according to Clause 3, Article 26 and Clause 1, Article 35 of the Civil Procedure Code and it is still within the statute of limitations for initiating a lawsuit as prescribed in Article 429 of the Civil Code 2015, Article 184 of the Civil Procedure Code\u201d<\/em><\/p>\n<p>Thus, the supplier of goods and services needs to clearly understand that the arbitration agreement will not be automatically applied if the consumer does not clearly understand the arbitration clause in the form contract or general terms.<\/p>\n<p><strong><em>Time of writing:<\/em><\/strong> 28\/12<em>\/2023<\/em><\/p>\n<p><em>The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer \u00a0at\u00a0 <a href=\"https:\/\/mail.google.com\/mail\" target=\"_blank\" rel=\"noopener\"><strong>info@cdlaf.vn<\/strong><\/a><\/em><\/p>\n<div class=\"content-post-nd\">\n<div style=\"text-align: center;\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-5519 size-full aligncenter\" src=\"http:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/05\/CHUONG-TRINH-THANG.png\" alt=\"\" width=\"1080\" height=\"600\" srcset=\"https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/05\/CHUONG-TRINH-THANG.png 1080w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/05\/CHUONG-TRINH-THANG-720x400.png 720w, https:\/\/cdlaf.vn\/wp-content\/uploads\/2023\/05\/CHUONG-TRINH-THANG-768x427.png 768w\" sizes=\"auto, (max-width: 1080px) 100vw, 1080px\" \/><\/div>\n<\/div>\n<div class=\"content-post-nd\">\n<p><strong>Why choose CDLAF\u2019s service?<\/strong><\/p>\n<ul class=\"li-content\">\n<li>We provide effective and comprehensive legal solutions that help you save money and maintain compliance in your business;<\/li>\n<li>We continue to monitor your legal matters even after the service is completed and update you when there are any changes in the Vietnamese legal system;<\/li>\n<li>Our system of forms and processes related to labor and personnel is continuously built and updated and will be provided as soon as the customer requests it;<\/li>\n<li>As a Vietnamese law firm, we have a thorough understanding of Vietnam&#8217;s legal regulations, and grasp the psychology of employees, employers, and working methods at competent authorities;<\/li>\n<li>CDLAF&#8217;s team of lawyers has many years of experience in the field of labor and enterprises, as well as human resources and financial advisory.<\/li>\n<li>Strict information security procedures throughout the service performance and even after the service is completed.<\/li>\n<\/ul>\n<\/div>\n<p><strong style=\"color: #a32411;\">You can refer for more information:<\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/8-important-new-points-regarding-work-permit-which-take-effect-from-september-18-2023\/\">8 important new points regarding Work Permit which take effect from September 18, 2023<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/control-risks-when-unilaterally-terminating-economic-contracts\/\">Control risks when unilaterally terminating economic contracts<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/some-reports-that-investors-and-enterprises-must-submit-at-the-end-of-the-year\/\">Some reports that investors and enterprises must submit at the end of the year<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/four-important-notes-on-foreign-loans\/\">Four Important Notes on Foreign Loans<\/a><\/li>\n<li><a href=\"https:\/\/cdlaf.vn\/en\/foreign-investors-who-want-to-do-business-with-mining-and-purchasing-minerals-in-vietnam\/\">Foreign investors doing business in mining and purchasing minerals in Vietnam<\/a><\/li>\n<\/ul>\n\n<div class=\"wpcf7 no-js\" id=\"wpcf7-f2681-o1\" lang=\"en-US\" dir=\"ltr\" data-wpcf7-id=\"2681\">\n<div class=\"screen-reader-response\"><p role=\"status\" aria-live=\"polite\" aria-atomic=\"true\"><\/p> <ul><\/ul><\/div>\n<form action=\"\/en\/wp-json\/wp\/v2\/posts\/8760#wpcf7-f2681-o1\" method=\"post\" class=\"wpcf7-form init\" aria-label=\"Contact form\" novalidate=\"novalidate\" data-status=\"init\">\n<fieldset class=\"hidden-fields-container\"><input type=\"hidden\" name=\"_wpcf7\" value=\"2681\" \/><input type=\"hidden\" name=\"_wpcf7_version\" value=\"6.1.5\" \/><input type=\"hidden\" name=\"_wpcf7_locale\" value=\"en_US\" \/><input type=\"hidden\" name=\"_wpcf7_unit_tag\" value=\"wpcf7-f2681-o1\" \/><input type=\"hidden\" name=\"_wpcf7_container_post\" value=\"0\" \/><input type=\"hidden\" name=\"_wpcf7_posted_data_hash\" value=\"\" \/>\n<\/fieldset>\n<h2 class=\"tt-form\"><span class=\"ez-toc-section\" id=\"SEND_CONSULTATION_REQUEST\"><\/span>SEND CONSULTATION REQUEST\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><label>Full name<\/label><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"full-name\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-text wpcf7-validates-as-required\" aria-required=\"true\" aria-invalid=\"false\" value=\"\" type=\"text\" name=\"full-name\" \/><\/span><br \/>\n<label>Email<\/label><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"email\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-email wpcf7-validates-as-required wpcf7-text wpcf7-validates-as-email\" aria-required=\"true\" aria-invalid=\"false\" value=\"\" type=\"email\" name=\"email\" \/><\/span><br \/>\n<label>Phone Number<\/label><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"phone\"><input size=\"40\" maxlength=\"400\" class=\"wpcf7-form-control wpcf7-tel wpcf7-text wpcf7-validates-as-tel\" aria-invalid=\"false\" value=\"\" type=\"tel\" name=\"phone\" \/><\/span><br \/>\n<label>Message<\/label><br \/>\n<span class=\"wpcf7-form-control-wrap\" data-name=\"coment\"><textarea cols=\"40\" rows=\"10\" maxlength=\"2000\" class=\"wpcf7-form-control wpcf7-textarea\" aria-invalid=\"false\" name=\"coment\"><\/textarea><\/span><br \/>\n<input class=\"wpcf7-form-control wpcf7-submit has-spinner btn-yellow\" type=\"submit\" value=\"Send\" \/>\n<\/p><div class=\"wpcf7-response-output\" aria-hidden=\"true\"><\/div>\n<\/form>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>In the Vietnamese legal system, besides the court, arbitration is also chosen by many parties to resolve disputes. This choice is usually recorded in the contract and is understood as an &#8220;Arbitration Agreement&#8221;. Currently, arbitration agreements are considered a flexible means to resolve disputes quickly and effectively. However, like any other solution, there are situations&#8230;<\/p>\n","protected":false},"author":4,"featured_media":8698,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[64],"tags":[315,316,314],"class_list":["post-8760","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-arbitration-agreement","tag-article","tag-unenforceable"],"acf":[],"_links":{"self":[{"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/posts\/8760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/comments?post=8760"}],"version-history":[{"count":0,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/posts\/8760\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/media\/8698"}],"wp:attachment":[{"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/media?parent=8760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/categories?post=8760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cdlaf.vn\/en\/wp-json\/wp\/v2\/tags?post=8760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}