Introduction to law – plue111 a

Purpose of the report This report aims to explore the principle of party autonomy in different jurisdictions of international commercial laws, thus evaluating the differences in the imp

FOREIGN TRADE UNIVERSITY HCMC CAMPUS DEPARTMENT OF ECONOMICS AND LAW

-o0o -

INTRODUCTION TO LAW – PLUE111

FINAL ASSIGNMENT

Academic year: 2024-2025

Grade (in number) Grade (in words)

Examiner 1’s signature Examiner 2’s signature

Invigilator 1’s signature Invigilator 2’s signature

Student’s Name Pham Vu Linh Anh: Student ID: 2412155005

Class code: 269

Lecturer: LLM Tran Thanh Tam

HO CHI MINH CITY, DECEMBER 2024

1.0 Introduction

(1 mark)

- Clearly state the purpose of the essay

- Define the principle of party autonomy in internationalcommercial contracts

- Outline the jurisdictions you will compare

2.0 Comparative Analysis

(5 marks)

- Describe the legal framework for party autonomy in each jurisdiction

- Compare how party autonomy is interpreted and applied in the selected jurisdictions by highlighting significantsimilarities and differences, supported by relevant case law and statutory provisions

3.0 Critical Evaluation (2

marks)

- Assess the strengths and weaknesses of the approachesin the selected jurisdictions

- Discuss the practical implications for parties in cross border contracts

4.0 Conclusion (1 mark) - Summarize your key findings

- Provide recommendations for the best practices in contractual negotiations and drafting

5.0 References (1 mark) Cite at least 8 academic or legal sources Use APA

referencing, including in-text citation and bibliography Total

TABLE OF CONTENT

I Introduction

1 Purpose of the report……… 4

2 Principle of party autonomy in commercial contract……… 4

3 Jurisdiction chosen: Vietnam and United Kingdom………5

II Comparative analysis

CHAPTER 1: LEGAL FRAMWORK OF PARTY AUTONOMY

1 Legal framework for party autonomy in Vietnam……… 5

2 Legal framework for party autonomy in United Kingdom……… 6

CHAPTER 2: COMPARE THE INTERPRETATION AND APPLICATION

OF PARTY AUTONOMY IN CONTRACT DRAFTING

1 Comparison between Vietnam and UK jurisdictions……… 8

2 Case law and statutory provisions

2.2 Case law in United Kingdom……… 9

III Critical evaluation

1 Strengths and weaknesses of Vietnam’s jurisdictions……… 10

2 Strengths and weaknesses of United Kingdom’s jurisdictions……… 11

3 Implications in cross-border contracts……… 12

IV Conclusion

1 Summary………12

2 Recommendations for practices……….13

REFERENCE LIST……… 15

I Introduction

1 Purpose of the report

This report aims to explore the principle of party autonomy in different jurisdictions of international commercial laws, thus evaluating the differences in the implication of the principle based on provided legal frameworks and documents By focusing on the legal framework for party autonomy in chosen jurisdictions and analyzing cases law, statutory provisions and contextual judicial practice corresponding with each jurisdictions, the report looks forward to pointing out significant contrasts, strengths and weaknesses in the selected jurisdictions In addition, some suggestions for practical implications and recommendations will be provided at the end of the report

2 Principle of party autonomy in international commercial contract

When parties enter a contract that is related to one or more legal law governed in different countries, the question of choosing which set of laws to govern the contract is deemed necessary This has significant influence not only on the overall results of the contract or arbitration, it is also important to the parties in the contract themselves to be aware of which law will be chosen to govern the contract, since each set of rules set out different advantages for the parties involved Given this context, the principle of party autonomy arises to provide a framework for the choice of law between the parties in international commercial cases Party autonomy has risen from a myth that is initially developed by academics to a principle widely applied in arbitrations of international commercial contracts (Born, 2014), yet its implication and usages vary across different jurisdiction, under different forms and applying different scopes, limitations

Despite its universal recognition, the principle of party autonomy differs in different jurisdictions in terms of their interpretation and application However, the concept of party autonomy remains the same, as party autonomy is defined that the parties in an international contract are allowed to choose the applicable law to their contract and the extent of the court to which they wish to bring a dispute A Dictionary of Law,” 2018)(“

Hague Principles on Choice of Law in International Commercial Contracts (2015) also provides a global legal framework for the recognition of party autonomy In the Hague Principle, it is defined that party autonomy, which refers to the power of parties to a contract to choose the law that governs that contract, increases reliability and predictability in the parties’

position to determine which set of law is the most suitable for their transaction (Lydie de Loof, 2016)

3 Jurisdiction chosen: Vietnam and United Kingdom

In order to have a clear and comparative comparison between jurisdiction, it’s best that the principle of party autonomy is explored in both common law and civil law system, which are represented by UK and Vietnam respectively The main law document that will be used for party autonomy comparison is the Vietnam Civil Code 2015 and UK Arbitration Act 1995 The reason behind the choice of Vietnam and United Kingdom jurisdiction is based on the legal system differences The Vietnamese legal system is rooted in the civil law tradition of emphasizing equity and fairness, which makes a good comparison subject to the common law system in terms of objective comparisons, with UK follows a common law system which is rooted in precedents and judicial decisions Comparing the application of party autonomy in the two countries highlights the similarities and difference in how party autonomy is interpreted under two different legal system

Secondly UK’s jurisdiction is widely favored for its neutrality, efficiency, and pro-business approach, particularly in international commerce and arbitration, hence its legal framework is also clearer in terms of cross-border contracts thanks to its predictability and impartiality On the other hand, Vietnam is an developing country in Southeast Asia, with the potential of becoming one of the fastest growing economies around the world (Duong, 2024) Therefore, by analysing the legal framework on international commercial contracts in Vietnam,

we can see the new adaptation and the orientation towards international treaties like in CISG

In addition to that, English law has become a necessity in the international contracts market as

it dwells upon the notions of predictability, autonomy, and commercial certainty thereby making

it a preferred comparative jurisdiction

II Comparative analysis

CHAPTER 1: LEGAL FRAMEWORK OF PARTY AUTONOMY

1 Legal framework for party autonomy in Vietnam

Although the principle of party autonomy has long been developed for international commercial contracts involving foreign entities and parties, specifically focused in the Hague Principles on Choice of Law in International Commercial Contracts, it has only been recently added to the official Vietnam Civil Code in 2015 according to Article 683 (Nguyen, 2018)

law in contractual context It also confirms the Vietnamese private international law is moving towards modern norms from the previous Civil Code 1995 promulgated, which back then didn’t satisfy the demand for specific regulations of foreign commerce compared to a large number of detailed codification of the time (Nguyen, 2018)

Article 683, clause 1 of the Vietnam Civil Code 2015 states that excluding the exceptions

of the cases provided in clauses 4, 5 and 6 of this article, parties in a contractual relationship may agree to choose the law applicable to the contract If the parties have not agreed on the applicable law, the law of the country having the closest connection with such contract shall apply (The Vietnam Civil Code, 2015, Art 683.)

This article displays a significant part of party autonomy in Vietnam, by implying that parties involving in the contract have the freedom to choose the applicable law to the contract; however, there is some modifications on the limitations of applicable law compared to the Hague Principle, which is clearly stated in clauses 4, 5, 6

According to clause 4, 5, 6, article 683 of the Civil Code, there are some specific situations when party autonomy is restricted such as the case of immoveable objects, the law applicable to commit any changes related to the subject matters HAS TO BE the law of the country in which the object is located And changes in the choice of law is only applicable to the contract when the third party involved in the contract agrees, otherwise the changes of law must not affect the lawful rights and benefits of the third person

There’s also the closest connection rule in case no law is chosen within the two parties, which is carefully stated in clause 2, article 683 of the Civil Code 2015, with detailed criteria for different contract types and which law will be applied in that specific situation

This is a significant difference between the implication of party autonomy in Vietnam’s Civil Code and that in the Hague Principles Although the Vietnam Civil Code 2015 still keep the basic principles of party autonomy like the Hague Principle, there are some additions to the conditions The Civil Code 2015 also impose stricter statutory limitations on the scope of application of party autonomy than in the Hague Principle, as stated in article 2 of the Principle (The Hague Conference on Private International Law, 2015, p 18) This happens to limits party autonomy to align with Vietnam’s legal traditions, public policy and to ensure people’s rights

2 Legal framework for party autonomy in UK

The principle of party autonomy has always been deeprooted in the UK Arbitration Act

1996, and this principle is always the cornerstone that allows freedom for parties to determine

states that all parties should be free to decide how their disputes are settled, and which law will govern their arbitrations, subject to such safeguards are important in the public interest (UK Arbitration Act 1996, section 1)

Accordingly, the provisions of the Arbitration Part must be founded based on the principle

of party autonomy, and shall be construed accordingly to the principles Following this section, under the UK Arbitration Act, parties have the freedom to choose the substantive law governing their dispute according to Section 46 of the Act If the parties do not choose the applicable law, the tribunal is allowed to determine the appropriate law

Similarly, according to Section 4, the parties can design their own procedural framework

or adopt institutional rules In cases where no procedural agreement exists, the Act supplies default rules to ensure the arbitration progresses efficiently (UK Arbitration Act 1996, section 4)

The parties are also free to choose how many arbitrators will be appointed, the qualifications they are to have, and the method of their appointment, as provided under Sections

15 to 17 Another important aspect of party autonomy relates to the provision dealing with the seat of arbitration in Section 3 The parties' decision on the seat becomes relevant to the applicable procedural law in the arbitration

The principle of party autonomy is also expressed in the English law in section 34 of UK Arbitration Act, 1996, which provides the law on rights of the tribunals to decide on all procedural and evidential matters It allows parties involving in an arbitration to choose how their arbitration is conducted with customized related feature in the arbitration

According to section 34 of UK Arbitration Act, the tribunal has the right to decide procedural and evidential matters in arbitration, subject to the rights of the parties to agree on any matter The list of matters is stated in section 34 such as time, location and language of the proceedings; any requirements for disclosure and submission of claims and defenses, whether

to follow strict rules of evidence or what format will be used for the display of evidence In addition, the tribunal can also adjust the time in accordance to directions within it

Despite the wide autonomy given to the parties, the Act has some obligatory provisions that will ensure fairness, impartiality, and enforceability For instance, Section 33 casts a duty upon the tribunal to act fairly, giving each party a reasonable opportunity to present its case At the same time, Section 68 enables any party to challenge the award where there was a serious irregularity affecting the fair conduct of the arbitration

CHAPTER 2: COMPARE THE INTERPRETATION AND APPLICATION OF PARTY AUTONOMY IN CONTRACT DRAFTING

1 Comparison between Vietnam and UK jurisdictions

1.1.Similarities

Hailed for their distinctive characteristics is the capacity that both systems have of acknowledging party autonomy as the cardinal principle of the contractual arrangements Currently, both jurisdictions permit the parties to make the choices on the law and rules of procedure of the contract that they intend to enter into For instance Article 683 of Vietnam’s Civil Code 2015 and Section 46 of the UK Arbitration Act 1996 provide parties autonomy in the choice of law Each system also contain a means for ascertaining the law chosen if no selection is made, for example Vietnam’ ‘closest connection rule, Section 46 of the UK s ’ tribunal discretion)

1.2 Differences

However, the limits set to the mandate rules are different in Vietnam and UK jurisdictions Vietnam enhances the clamp down on the freedom of party to jealously protect public policy, the mandatory stipulation, employees/consumers disadvantageous parties as provided for ’ under Article 683 clauses 4, 5 & 6 of Civil Code It is possible to ensure that the standards given

by the Vietnamese legislation can be negated there any way by placing such restrictions As it will be demonstrated in the sections below though, the UK’s approach is more relaxed, with reliance upon the principle of procedural rationality rather than limiting the discretion of administrators substantively This is evident in Section 33 and 68 of the UK Arbitration Act; however, the level at which UK does not restrict the entire freedom of the parties as in Vietnam The last of procedural differences is that of arbitration Vietnam’s system is somewhat more formaly and legal-ish concerning this matter than UK due to civil law inheritance of Vietnam while UK common law nature is more flexible and the rules depend on precedents For example, the conditions concerning the closest connection that depend on the kind of the contract are opposite to the decision in every single case of the proper law in the United Kingdom

2 Case law and statutory provisions

2.1 Case law in Vietnam

related to international contract especially Application of Article 683 of Civil Code 2015 An excellent illustration must be a case that was studied by the Vietnam International Arbitration Centre (VIAC) that assessed the enforceability of a foreign governing law provision in the contract of a Vietnamese firm with a foreign counterparty The tribunal then looked at whether the chosen law conforms with the Vietnamese public policy and the mandatory provisions Finally, the tribunals respected the choice of law in contract and at the same time, they did not allow a choice of law that would be against the Vietnamese public policy or which would deprive the parties of the minimum protection allowed by Vietnamese law

Another example was a case of labor contract dispute where a foreign company wanted

to choose foreign law as the governing law This application was dismissed by the Vietnamese court relying on Article 683(5) of the Civil Code of Vietnam which calls for preferential Vietnamese law in labour contract to safeguard minimum employee rights This case thus illustrates how Vietnamese anti party autonomy approach is tighter in fields related to the less powerful parties for example the employees and the consumers

2.2 Case law in the UK

Fiona Trust & Holding Corporation v analyzed that the Privalov [2007] UKHL 40 is an excellent example of the party autonomy under the law of UK In this case the court endorsed

a wide definition of arbitration clauses stating that, if the parties contract so provides, any ’ claim, including fraud allegations, should be submitted to arbitration (Mundi, n.d.) This was,

in effect, a reaffirmation of the British approach to party autonomy as well as their generally laissez-faire attitude toward contractual freedom This the court did by interpreting the arbitration clause in a broad way while at the same time pointing out that the flagrant intentions

of the parties should be met as long as they do not offend public policy or constitute a violation

of mandatory procedural fairness rules Sections 1(b) and 7 of the UK Arbitration Act 1996 were particularly relevant in this case, supporting the parties' freedom to arbitrate and the presumption of the validity of arbitration clauses

Another case in point is Sulamérica Cia Nacional de Seguros SA v In Joined Cases [2012] EWCA Civ 638, where the appeals arise from three different jurisdictions where the parties entered into an arbitration agreement but the Court of Appeal is confronted to determining the governing law of the arbitration agreement where the parties did not state so The court concluded that the analytical approach – the closest connection test, shall be adopted; this ties

up with the procedural rules of the seat of arbitration (Section 3, UK Arbitration Act) This case

autonomy and uses the courts to interpret the Anglia rules to ensure sufficient certainty in arbitration clauses Sections 46 and 4(3) of the UK Arbitration Act 1996 were applied, addressing the choice of substantive law and the tribunal's discretion to fill gaps in party agreements

III Critical evaluation

1 Strengths and weaknesses in Vietnam’s jurisdiction

1.1 Strengths

The Vietnam’s jurisdiction on party autonomy certainly has its own strengths Vietnam jurisdiction is committed to the protection of the public policy aspect as well as the weaker parties in the society which includes the employees and the consumers Thus, the Civil Code

2015 has predictable legal restrictions, thus allowing party autonomy while excluding extreme injustice in violation of legal principles or the interests of the community This approach also improves certainty and reasonableness in contractual relationships where one party is in a more dominant position than the other party Also, Vietnam’s accession to many international treaties including the CISG proves that Vietnam is willing to follow the international trends, meaning that it is gradually becoming more appealing for international business

Vietnam’s legal system is written, which means is more straightforward and gives clearer advice than the unstipulated laws According to the “closest connection rule spelled out under ” Article 683, there are Guidelines used when there is no choice made to make sure that people receive consistent justice regarding the disputes The legal framework of Vietnam alongside the development refinements such as VIAC does enlarge the jurisdiction efficacy for managing cross border disputes

1.2 Weaknesses

However, the Vietnam’s jurisdiction has some disadvantage as well As has been seen above A consequence of the severe restraints put regarding the degree of party autonomy is that it may just discourage foreign investors and businesses who wish for more liberty of contract This focus on public policy might create doubts as to the legal nature of cases for which limits of public policy are not very clearly defined Second, the civil law legal tradition

of Vietnam can be less favorable than the common law systems for the adaptation of the old wooden rules to the new time or for the use of analogy for solving specific cases