Photo: Ngoc Lan
FDI enterprises prefer to use commercial arbitration over courts.
by Ngoc Lan
- FDI flows ongoing
- FDI attraction an evolving landscape
- IFC & Supreme People's Court introduce arbitration and mediation guide
On May 12, around 24 per cent of disputes were resolved at the Vietnam International Arbitration Centre (VIAC) and involved FDI as one of the parties. Of these, 32 per cent were in the purchasing of goods, 24 per cent in construction and 20 per cent in leasing, according to a report released by VIAC at a seminar entitled “Commercial Arbitration – Increasing Confidence in Foreign Direct Investment.
At the seminar, Mr. Phan Trong Dat, Deputy Secretary General of the VIAC, said that 40 per cent of foreign direct investment (FDI) enterprises choose to use commercial arbitration for cases of disputes, instead of going to court. They prefer commercial arbitration to resolve disputes because of its effectiveness, he explains, as it helps them save time and costs. “Court proceedings that settle disputes have failed to meet FDI requirements because many of the judgments have been unfair and have caused lengthy disputes and considerable expenses for enterprises,” he added.
At the seminar, Mr. Pham Manh Dung, the VIAC’s arbitrator and a lawyer from Rajah and Tann LCT Lawyers Company Limited, said that by the end of 2017, Vietnam had 24,700 FDI projects with total registered capital of $318.7 billion, accounting for 25 per cent of the total investments in the country and more than half of the nation’s total industrial production value. “This has been an important factor for the country’s infrastructure development and for completing legal systems to develop market mechanisms that suit international norms,” he noted.
The seminar focused on discussing the necessity and efficiency of the commercial arbitration method as one of the most effective ways of resolving disputes related to FDI enterprises.
The seminar was divided into three sessions namely An Update on the Situation of Commercial Arbitration in Vietnam and Around the World, Commercial Arbitration - A New Element Worth Noting is to Help to Attract Foreign Direct Investment, and Commercial Arbitrage Is a Useful Tool For Controlling Business Risk.
More than 100 delegates from FDI enterprises, counterpart enterprises, potential partners with FDI enterprises, many prestigious lawyers, and representatives from state management agencies attended the seminar.