SERVICES AND INNOVATIONS OF MAJOR INTERNATIONAL COMMERCIAL COURTS, IMPLICATIONS TO VIETNAM

According to rules of major international commercial courts, for examples, London Commercial Court LCC, Singapore International Commercial Court SICC, The Courts of the Dubai Internation

MINISTRY OF EDUCATION AND TRAINING

FOREIGN TRADE UNIVERSITY

DISSERTATION

SERVICES AND INNOVATIONS OF MAJOR INTERNATIONAL COMMERCIAL COURTS,

IMPLICATIONS TO VIETNAM

Major: International Trade Policy and Law

DANG VAN QUAN

Ha Noi - 2019

MINISTRY OF EDUCATION AND TRAINING

FOREIGN TRADE UNIVERSITY

DISSERTATION

SERVICES AND INNOVATIONS OF MAJOR INTERNATIONAL COMMERCIAL COURTS,

IMPLICATIONS TO VIETNAM

Major: International Trade Policy and Law

Full Name: Dang Van Quan SUPERVISOR: A Prof HO THUY NGOC

Ha Noi - 2019

The views presented in this thesis are the personal views, and I am solely responsible for any mistake I will be entirely responsible for the dissertation‟s contents

Author

Dang Van Quan

ACKNOWLEDGEMENT

The dissertation has been completed with the great guidance of A Prof Ho Thuy Ngoc I would like to express my sincere thanks for her patience and massive help with reading the whole of the thesis and making valuable comments for my research

By this occasion, I am much grateful to the Department of Graduate Studies and Foreign Trade University - who have always create most favorable conditions for MITPL4 students in completing our study Thank you so much for their generosity and I owe a debt of gratitude to all helpers

TABLE OF CONTENTS

LIST OF ABBREVIATIONS v

INTRODUCTION 1

1 Rationale 1

2 Scope of research 2

3 Research questions 3

4 Methodologies 3

5 Structure of the thesis 3

CHAPTER 1: LITERATURE REVIEW 5

1.1 History and ethos of international commercial court distinguished from national courts and international commercial arbitration 5

1.2 Missions of international commercial court and recent movements in some countries 13

1.3 Vietnamese court system 17

1.3.1 Vietnamese legal corridor 17

1.3.2 Remarkable points in the Vietnamese jurisdiction 19

1.3.3 Reviewing the hierarchy of the Vietnamese court system 22

1.3.4 Current services of Vietnamese commercial court 24

CHAPTER 2: FINDINGS 26

2.1 Globalization of the Hague Convention on Choice of Court Agreements 26

2.2 Challenges need to be resolved by international commercial court 32

2.2.1 In general on the world 32

2.2.2 In Vietnam 33

2.3 Services and innovations of major international commercial courts 35

2.3.1 Singapore International Commercial Court (SICC) 40

2.3.2 The Courts of the Dubai International Financial Centre (DIFCC) 44

2.3.3 London Commercial Court (LCC) 49

CHAPTER 3: IMPLICATIONS TO VIETNAM 54

3.1 Building a trustworthy and competent court system 54

3.1.1 Restructuring the organization of the commercial court system 55

3.1.2 Consolidating domestic legal framework 56

3.1.3 Building flexible and attractive mechanisms 58

a Emergency proceedings 58

b E-filing procedure, joint hearing 58

c Combining court proceedings with ADR 59

3.2 Connecting deeply to oversea commercial courts 62

3.2.1 Promoting international legal agreements 65

3.2.2 Short training exchanges to learn each others 68

3.3 Keeping abreast of international commercial changes 68

CONCLUSION 70

REFERENCES i

LIST OF ABBREVIATIONS

Centre

International Sale of Goods (Vienna, 1980)

Courts

Trade Law

Model Law

Commercial Arbitration (1985), with amendments

as adopted in 2006

INTRODUCTION

1 Rationale

We are in a world of globalization, integration, and cooperation One issue or one problem nowadays may not be of one country, and it needs more connective solution to resolve, particularly in transnational commercial transactions The complexity of a cross-border commercial deal is increasing, especially in financial transactions or multi-stakeholder transactions This trend leads to many changes in the industry of dispute resolution

Basically, there are four kinds to settle a commercial dispute: Negotiation, mediation, arbitration and litigation Arbitration is a most-used method for many

on the Recognition and Enforcement of Foreign Arbitral Awards This method is still prime mechanism and its success is undeniable because of many advantages that it has been enjoyed from the strong legal framework created by the New York Convention 1958 Recently, our world has started switching to use increasingly other kinds, amongst them, using litigation in an international commercial court is remarkable and this created a new trend with opens of new courts around the world

In this context, Vietnam still seems to stand out of the trend, this may be not favorable to the economic and legal integration, or it must have own reasons explaining for its laggard inception

According to rules of major international commercial courts, for examples, London Commercial Court (LCC), Singapore International Commercial Court (SICC), The Courts of the Dubai International Financial Centre (DIFCC), their services and innovations were introduced in compelling menus They look more various and advanced than those of a national commercial court Hence, we should conduct a survey from them, make a thorough scrutiny to learn and apply to the model of the Vietnamese court system All aforementioned reasons and contexts led

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Pierre A., 2017, the Powers and Duties of an Arbitrator, 1.

to a need to write about the topic and this thesis is expected to answer questions relating the future of the international commercial court in Vietnam

2 Scope of research

In this dissertation, I would like to limit its contents as a scope of research, focusing on services and innovations as well as some matters incorporated with international commercial courts on the world and the court system in Vietnam The thesis will review existing books, papers, literatures, and sometimes it will explore some issues in general of legal study, or about some kinds of dispute resolutions as well as developments of some major international commercial courts Through these, I am going to suggest some recommendations for Vietnamese court system,

in order to become a good partner of other international courts in the near future Hence, the central objects of the thesis are services and innovations of international commercial courts and other relevant information is to clarify thoroughly their own circumstances and to subject commercial courts to a scrutiny in the relationship and interaction with each other and with national courts

The discussion of international commercial disputes in this research should be distinguished from investor-state investment disputes As an important legal remedy for foreign investors to protect their interests against national expropriation, the resolution of investor-state investment disputes has a distinctive treaty-based feature, especially bilateral international treaties (BITs) Investor-state investment disputes normally arise between foreign investors and host states, and they do not necessarily involve contractual relations, meanwhile international commercial disputes between equal contracting parties In addition, unlike commercial disputes which are normally resolved by civil mediation/litigation or arbitration, investor-state investment disputes are normally resolved by administrative litigation at the national level or arbitration at the international level, for example, in the International Centre for Settlement of Investment Disputes (ICSID)

3 Research questions

The thesis will address research questions below:

(1) What are services and innovations of major international commercial courts? (2) Whether and to what extent the core principles in the law and practice of major international commercial courts are replicated in Vietnam? What are implications to Vietnam court system?

4 Methodologies

This study was conducted using the following methodological approaches First, method of theoretical examination was primarily employed to examine the historical development and current situation of commercial court system, especially

in the context of the new trend on the world The thesis mainly leans on secondary legal data from some well-known institutes, such as International Chamber of Commerce, Queen Mary University of London Second, method of conceptual analysis was also utilized to analyze legal rules and point out their strengths and weaknesses in keeping the progress and development of a court

In the legal field, needless to say, opinions of a distinguished jurist or a chief justice are very valuable for referring and considering when we want to make a sound understanding about the matter we are researching That is why in my thesis I would like to refer to lots of papers from great scholars to make clear for my comments and my conclusions

5 Structure of the thesis

The thesis will focus on examining services and innovations of some major international commercial courts which are its main objects Apart from the introduction and conclusion sections, the contents of the thesis will be divided into three chapters

Chapter 1 will be dedicated to review existing papers and works of well-known jurists studying on international commercial court, in order to point out deficiencies

of arbitration and expectations from users on the mission of international

commercial court In this chapter, recent movements in some countries, remarkable points in jurisdiction and the structure of the Vietnamese court system also will be introduced

Chapter 2 will be principal findings, with three main identifications First, this chapter will draw out a new trend of development in terms of legal framework which is the globalization of the Hague Convention on Choice of Court Agreements Second, the greatest and pressing challenges that an international commercial court needs to address will be mentioned Third, the thesis will point out services and innovations of newly established international commercial courts, such as Singapore International Commercial Court (SICC) and the Courts of the Dubai International Financial Centre (DIFCC), or of a long-standing international commercial court, for example London Commercial Court (LCC), highlighting their individual characteristics and the variety in development strategies as well as differently oriented goals

Chapter 3 will set out implications to Vietnam in order to ensure the prospective development for its commercial court system The implications will be built upon three aspects In the first place, building a trustworthy and competent court system

is the imperative and foremost suggestion It comprises of consolidating domestic legal framework, restructuring the organization of the commercial court system, and building flexible and attractive mechanisms In the second place, connecting deeply

to oversea commercial courts is the next priority through promoting international legal agreements and short training exchanges between international commercial courts Finally, the Vietnamese commercial court system can not stand out of changes on the world, so keeping abreast of international commercial changes is the third proposal which will be the last one in this chapter

CHAPTER 1: LITERATURE REVIEW

Definitions of services and innovations of international commercial court:

According to the Cambridge‟s Dictionary, service is “business activity that involves doing things for customers rather than producing goods”, or “a single act of doing something for a customer”, or “the way that employees of a business, store, etc deal with customers, especially how quickly and effectively they do this”2 In the

Oxford‟s Dictionary, service is “assistance or advice given to customers during and after the sale of goods”3 Therefore, we can define in our context that “service” is a concept being used to talk about an act or a way of doing something for clients emphasized on how quickly and effectively As to innovation, according to the

Cambridge‟s Dictionary, innovation is “a new idea or method, or the use of new ideas and methods”4 Now we turn back to the main parts of the literature review 1.1 History and ethos of international commercial court distinguished from national courts and international commercial arbitration

There are a number of researches and papers written in English The first one is

the book “The Practice and Procedure of The Commercial Court, Sixth Edition” author Sir Anthony Colman, Victor Lyon, and Philippa Hopkins This book

summarized the history of commercial court and showed that the first commercial

papers written by chiefs of justice in Singapore, Australia, France, Netherlands, etc For example, Chief Justice of Singapore International Commercial Court, Mr

Sundaresh Menon with his paper “International Commercial Courts: Towards a Transnational System of Dispute Resolution” as an opening lecture for the Dubai

Courts Lecture Series 2015, he analyzed the vital changes of our world from sovereignty and legal equality of states with economic and political boundaries between jurisdictions to globalization due to the rise of connective technology

Sir Anthony, C., Victor, L., & Philippa, H., 2017, the Practice and Procedure of the Commercial

Court, Sixth Edition, Cambridge, chapter 1, 6-7

which has given rise to a corresponding increase in the number of transnational commercial disputes, and how arbitration answered the need for an international commercial dispute resolution system The Chief pointed out some lessons we may learn from experience of arbitration to build a commercial court system, he described a need for an alternative, and why international commercial courts are well placed to address this need He also examined the models of SICC, DIFCC; compared them each other and between them with arbitration and with a national court The paper is very interesting and informative, showing his great view with a macro-vision and persuasive comments Nevertheless, there are not many comparisons and analyses with regard to services and innovations of SICC and

DIFCC Similar sentiments have been expressed in the lecture “Commercial Justice

in the Global Village: The Role of Commercial Courts”,6 by the Chief Justice of England and Wales, Mr John Thomas who has showed an imperative demand in which commercial courts should adopt a clear strategic approach to how they meet the change of the world because our world has come together and our financial and commercial markets are changing ever more rapidly as a consequence of the digital revolution He asserted that the basis of that strategic objective must be strengthening the rule of law to resolve individual disputes in a timely, cost-effective and just manner, and to guide wider market behavior, focusing on four broad areas – (1) market motivated, but judge led, reform; (2) personnel; (3) process, and (4) product – and commercial courts should take account of and learn from each other, as well as make best use of the possibilities that digital technology

is providing

There are many different mechanisms in resolving a transnational commercial dispute on the world, such as negotiation, mediation, arbitration, litigation and online dispute resolution (ODR) Negotiation, mediation, arbitration and litigation are in the group named ADR_ alternative dispute resolution Sometimes we also find a combination using each type to create a new method, like Arbitration-

6

John, Th., 2016, Commercial Justice in the Global Village: the Role of Commercial Courts, DIFC

Academy of Law lectures, DUBAI.

Mediation-Arbitration (for example, in the SIAC- Singapore International Arbitration Center)

Arbitration is a process by which parties refer, usually voluntarily, their disputes

to an impartial third party, an arbitrator(s), selected by them for a binding decision based on the evidence and arguments to be presented before the arbitration tribunal (a single arbitrator is often used for simpler disputes with smaller claims, while three-person panels are common for complex disputes with larger claims) Arbitration is initiated by any party invoking a pre-dispute agreement to arbitrate, such as an arbitration clause in a contract It cannot validly occur unless the parties have specifically agreed to use this process to settle their dispute Arbitration may still be the most widely used Alternative Dispute Resolution (ADR) technique Arbitration has taken the lead in international litigation as the principal way to settle international disputes Since the promulgation of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention- The Convention has been ratified by 159 countries around the world and has been described as the single most important pillar for international

are over forty institutions around the world that hold themselves out as being neutral administrators of international arbitration and each has a set of rules The Global Sales Law survey concluded that “disputes in international trade are, today,

commercial arbitration seems to be perfect, preeminent and supplies well all the needs of international businesses

Commercial Litigation is the process of taking a legal action regarding business transactions through a commercial court A business litigation lawyer is often consulted for legal representation and to help settle a dispute The court will render

a judgment to be enforced on the losing party In this thesis, only international commercial transactions will be mentioned, so the court herein is international commercial court

Most companies doing business internationally are reluctant to enter their customers or partners' courts They fear corrupt or protective judges They are unfamiliar with and therefore sceptical of local law, local language and custom They seek to avoid inconsistent outcomes While trade and investment were becoming increasingly transnational, and the multinational corporation was developing with an interest in promoting business and profits without regard to national boundaries, national courts, at least from the foreign trader's or investor's point of view, remained resolutely local in outlook Such assessment of the shortcomings of judicial settlement of commercial disputes by local courts has helped international arbitration to grow in prominence

That is not to say that there are no domestic courts that have managed to overcome this perceived shortcoming and endeared themselves to international litigants In this regard, one can mention the London Commercial Court This Court attracts a significant proportion of litigants where one or both parties to the disputes

do not have any real or significant connection to the United Kingdom It is suggested that 80% of the work before the London Commercial Court has, at least,

why this type of national court is preferred to other national courts in resolving international commercial disputes One of the significant advantages of the London Court is its ability to understand the business and commercial world and London's

Lord Mansfield In the latter half of the eighteenth century, the foundations of

Court of King‟s Bench, in the City of London Lord Mansfield was Chief Justice in

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New English-Speaking Commercial Court in Paris, speaking-commercial-court-in-paris/

https://www.acerislaw.com/new-english-11

Sir Anthony, C., Victor, L., & Philippa, H., 2017, the Practice and Procedure of the Commercial

Court, Sixth Edition, Cambridge, Chapter 1, Page 1, ¶1

the 32 years from 1756 to 1788 After the era of Lord Mansfield, there was a strong feeling that the court was not a satisfactory forum for the resolution of commercial disputes Litigation was regarded as too slow and too expensive The judges and the

judges of the Queen‟s Bench Division met and appointed a committee from themselves to consider whether it was possible to establish a Commercial Court to make changes in procedure and administration as they considered necessary for the better administration of justice In February 1895 the fruits of the committee‟s work

of the “Notice as to Commercial Causes” was that the “Commercial Court” was

There are, of course, the well-known reasons of judicial independence, respect for rule of law and the commercial friendliness of the English Common Law This cemented London's place as an attractive venue for international commercial dispute resolution, whether it is litigation or arbitration

Since its inception in 1895, the Commercial Court has been concerned with matters arising in relation to commercial arbitrations held in London and elsewhere

in England and Wales The great majority of commercial arbitrations held in

Other types of arbitrations which from time to time come into the court‟s orbit are harder to classify, and many of the arbitrations which fall to be considered are so-called “ad-hoc” arbitrations which are not administered by a particular arbitral body The court is very occasionally concerned with international arbitrations in other fields, such as those administered by the London Court of International

12

Sir Anthony, C., Victor, L., & Philippa, H., 2017, the Practice and Procedure of the Commercial

Court, Sixth Edition, Cambridge, Chapter 1, Page 6

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Sir Anthony, C., Victor, L., & Philippa, H., 2017, the Practice and Procedure of the Commercial

Court, Sixth Edition, Cambridge, Chapter 1, Page 7

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Sir Anthony, C., Victor, L., & Philippa, H., 2017, the Practice and Procedure of the Commercial

Court, Sixth Edition, Cambridge, Chapter 1, Page 8

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Sir Anthony, C., Victor, L., & Philippa, H., 2017, the Practice and Procedure of the Commercial

Court, Sixth Edition, Cambridge, Chapter 1, Page 289, ¶1

Arbitration or the International Chamber of Commerce, but the rules of such bodies generally exclude or limit rights of recourse to national courts, and so the Commercial Court‟s involvement in these types of dispute is necessarily less frequent Recently, the court has been called on to review awards made under international investment treaties, and it has been held by the Court of Appeal that it

Now we go together to the definition of international commercial court After looking for a long time with a search engine on the Internet for possibly acceptable answers, one comes to a conclusion that there has not been a clear definition of

“international commercial court” In my comprehension, international commercial court is a specialized body of a national judiciary based upon hybrid features of a national court and an arbitral tribunal in order to decide mainly international commercial disputes It is not simply a national court or an arbitral tribunal International commercial court can draw on the strengths of the foundations of their municipal courts (such as: published judgments, rights of appeal and the availability

of joinder), while also incorporating desirable features of arbitration (such as confidentiality) International commercial court‟s rules and procedures cater to commercial disputes involving foreign litigants and cross-border disputes that often have little or no connection to the state within which the court is situated This can make international commercial courts attractive to parties who find both litigation

in national courts and international arbitration unappealing International commercial courts are inspired in part by the London Commercial Court and have some unique features when compared with domestic courts The general principle is that foreign lawyers do not have a right of audience in the national courts of other jurisdictions By contrast, it is much easier for foreign lawyers to represent parties before international commercial courts In addition, judges may come from different jurisdictions in some international commercial courts (some but not all; for example, Singapore International Commercial Court or Dubai International

16

Sir Anthony, C., Victor, L., & Philippa, H., 2017, the Practice and Procedure of the Commercial

Court, Sixth Edition, Cambridge, Chapter 1, Page 290

Financial Center) Their judicial bench includes judges from various foreign jurisdictions

The main difference between international commercial court and international commercial arbitration is the basis for activities of judges and arbitrators Judges are appointed and paid by the state to render a judgment On the other hand, the arbitrators‟ activity relies on a very different basis It relies on the contract accepted

by the parties The parties waive their fundamental rights to go before a state judge They place their confidence in arbitrators who they chose for the particular case due

to their specific skills and experience As a result, choosing arbitration means choosing a totally different way and arbitral proceedings will therefore also be used and applied in a different manner than court proceedings Judges and arbitrators are

in the same market and supply the same needs but with clearly different services While arbitrators never interfere in the field reserved for judges, judges may be invited to intervene in the arbitration proceedings This intervention may occur at

The first level is at the beginning of or during the arbitration in order to facilitate

or to control the functioning of the proceedings This is a non-exclusive power since the judges are merely invited to intervene and to help the parties and the arbitrations Therefore, these competences may be attributed to a third party, namely to private institutions such as the SIAC, the LCIA (The London Court of

Secondly, once the award has been rendered, the judge may intervene based on recourse for annulment in order to control the award The control of arbitral awards falls into the exclusive competence of the judges Under the UNCITRAL Model

Baudenbacher, 2010, International Dispute Resolution, Vol 2, Dialogue between Courts in Times

of Globalization and Regionalization, German Law Publishers, 99

19

UNCITRAL Model Law on International Commercial Arbitration (1985), with amendments as adopted in 2006

competence of the arbitral tribunal, the respect of a few fundamental procedural

in line with the essence of arbitration Judges are invited to control the application

of the law in the field of arbitration and to control whether the arbitrators have followed the minimal standards required in order to justify the parties‟ waiver of the

Thirdly, there is possibility for intervention when the judge is asked to provide a help for the enforcement of an award The judges are invited to control foreign awards They will accomplish this task according to the criteria set up by the New York Convention Those standards are practically the same as in most national legislations, but they have to be applied in an open way and really internationally

On the other hand, compared with the arbitral model there is greater accountability and transparency in the international commercial court‟s model, as it remains firmly underpinned by judicial control

Baudenbacher, 2010, International Dispute Resolution, Vol 2, Dialogue between Courts in Times

of Globalization and Regionalization, German Law Publishers, 100.

1.2 Missions of international commercial court and recent movements in some countries

There has been research on international commercial court in certain countries as well, for example Australia, or China Both provided an inside look into

commercial court To begin with, in Australia, the paper “An International Commercial Court for Australia- Looking Beyond the New York Convention”

written by the co-author: the Chief Justice of Victoria- Mr Marilyn Warren, and the Judge in Charge of a Commercial List, the Arbitration List and the Taxation List in the Commercial Court of the Supreme Court of Victoria- Mr Clyde Croft They discussed two brief examples of transnational legislation which form an important part of the international legislative architecture, these are the New York Convention

1958 and the Hague Convention on Choice of Court Agreements (the Hague Convention), and then considered existing international commercial court models - five prime examples of courts which have been described as “international commercial courts” They are the relatively newly established Singapore International Commercial Court (SICC), the Qatar International Court (QIC), and the courts of the Dubai International Financial Centre (DIFCC), the Abu Dhabi Global Market (ADGM), and a long-standing court- the London Commercial Court (LCC), but the paper focused on the circumstances in which they were established, did not mention much enough about their services Their aim was to find out the manner in which other international commercial courts have been established and developed, in order to provide useful guidance and issues for consideration in the establishment of an Australian international commercial court Eventually, they

withdrew a conclusion: “The proposal for an international commercial court for Australia cannot be left to the Courts themselves or the legal profession to develop and agitate The experiences of Singapore, Dubai, Abu Dhabi, and indeed, London demonstrate that it is vital for there to be government interest and support for such

a proposal” 22 Secondly, in China, I found a doctoral thesis of a PhD candidate studied in Erasmus University Rotterdam: “Foreign-Related Commercial Dispute Resolution in China: A focus on litigation and arbitration”23 This is the in-depth study into China's arbitration and international commercial litigation, explaining the core principles of litigation and arbitration which are widely recognized in international legal documents and literature It depicted institutional designs of Chinese courts and arbitration institutions, highlighted the statutory differences between domestic and foreign-related commercial cases in litigation and arbitration, and provided an overview on the proceedings of international commercial litigation and arbitration The dissertation also provided an internal comparative analysis to show the relative advantages and disadvantages of international commercial litigation and arbitration with regard to the core principles Through these analyses, the author illustrated disparities in international commercial litigation and arbitration, and made recommendations accordingly for their future reforms

In addition, international commercial court has also been mentioned in a number

of works One of them is the research “the Emergence of Hybrid International Commercial Courts and the Future of Cross Border Commercial Dispute Resolution in Asia” 24 This research put developments of international commercial courts in comparative perspectives and examined normative, procedural, institutional issues and practical challenges It also assessed and critically examined the legal/legislative infrastructure required to accommodate the establishment of international commercial courts for cross border commercial disputes After analyzed and compared the approaches between European mechanism and Asian

mechanism, the author withdrew a conclusion “It is also clear that there is no one single model for advancing the causes of international commercial dispute

22

Marilyn, W & Clyde, C., 2016, An International Commercial Court for Australia - Looking

beyond the New York Convention, Melbourne, 39

and arbitration’, PhD thesis, Erasmus University Rotterdam.

24

Cross Border Commercial Dispute Resolution in Asia, 14 Loy, U Chi, Int'l L Rev 31.

resolution There are a number of tools that can be utilized These tools could, for convenience sake, be grouped as normative, institutional, and procedural”

However, the contents of the paper is so far away from our expectation, they do not answer to our concerns

If international commercial court offers services to improve the deficiencies of arbitration and meets well expectations from users, I believe that it can compete directly to international commercial arbitration, although at present many surveys

method amongst respondents‟ preferred dispute resolution mechanisms with 90% and 97% of respondents in 2015 and 2018 respectively These statistics prove that international commercial arbitration still keeps the predominant position at least at present

Nonetheless, there are some bases for my prediction There are inverse movements between international commercial court and international commercial arbitration First and most importantly, there is the new movement inside international commercial court From establishing new bodies to optimizing their rules and the rise of caseloads, for example, in 2016, over 1,100 claims were issued

in the Admiralty and Commercial Court (England), of which 70% involved at least one party whose address is outside England and Wales and 45% were cases where all parties involved were international In the year end to July 2017 there were over

700 claims, with 71% being international in nature and over 49% of those being

25

http://www.arbitration.qmul.ac.uk/media/arbitration/docs/2015_International_Arbitration_Survey.p df

19 cases in 2018 (1 case was filed directly with SICC, 18 other cases were

against arbitration in that there is a tendency to go for compromises The problem arising in connection with arbitration based on a compromise is that it is sometimes very unpractical Especially, in the banking and finance sector, the goal of the parties is to get 100% of what they have required, but they fear that arbitration could grant them less In this situation, the parties are better advised to go before an international commercial court where they are more likely to get the full amount

we saw how international commercial court has provided better services which replace the weak characteristics of international commercial arbitration, such as high cost, lack of effective sanctions during the arbitral process, lack of power in relation to third parties, lack of appeal mechanism and others Therefore, in my opinion, international commercial court can become a potential rival of international commercial arbitration This needs a certain period of time to become true, because international commercial arbitration has been underpinned by the long-standing Convention, the New York Convention, which has six decades of development

31

Dang, Q., 2018, „International Commercial Courts–Partners and Potential Rivals of

Arbitration’, master‟s thesis, Kobe University, strengths and weaknesses of international

commercial court and international commercial arbitration, 47-63.

1.3 Vietnamese court system

1.3.1 Vietnamese legal corridor

Any legal system is partly influenced by history, socio-political and economic conditions, so we should quickly review them to get enough understanding of these backgrounds Vietnam is a socialist country under the leading of the Communist Party Therefore, the current legal system of Vietnam has its own nature As we know, Vietnam was occupied by China for over one thousand years - until 938 Anno Domini, and was then independent until the mid 19th century before was colonised by colonialist France in 1864 In 1945, Vietnam dislodged colonialist France from its land and declared the birth of the Vietnam Socialist Republic In

1946, Vietnam held the first National Assembly election, which adopted its first constitution However, the situation was precarious because colonialist France tried

to regain power by force, resulting in Vietnam-France War (1946-1954) After defeating colonialist France in 1954, the country was divided into the North and the South The South was named the Republic of Vietnam; while the North was named the Democratic Republic of Vietnam The intervention of the United States led to Vietnam-America War, this war ended in 1975, and the country was unified In general, we can divide into four periods of history which affect the Vietnamese legal system, such as: feudal regime; French colonialism; Soviet Union; and the renovation period from 1986 when the Vietnam Socialist Republic introduced “Đổi mới”- a renovation policy in 1986 The thesis only focuses on the legal system from

1986 up to present and looks at a narrow aspect in connection with its topic instead

of a comprehensive look

The country has developed a socialist legal system based on the civil law system, with some major modifications from Marxist-Leninist ideology The current legal

 Legislation is the most important source of law;

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A look at Vietnam's legal system, 2017, look-country%E2%80%99s-legal-system

https://oxfordbusinessgroup.com/overview/law-land- Courts are subordinate to the legislature and must make decisions based on legislation; and

 Policies are set out by the Communist Party, the only political party in Vietnam, which can lead to changes in legislation in the future

In 2015, in an effort to reorganize the legislation of Vietnam, the National Assembly passed Law No 80/2015/QH13 on the promulgation of legal

regulations about the types of legal documents and law-making process, which consist of many types of legal documents, with differences in legal validity Article

4 of Law 80 specifies and categorizes legal documents into 15 levels of validity of which the constitution has the highest level of validity From higher to lower legal validity, sets out 10 commonly encountered legal documents in Vietnam‟s legal

Assembly; 3 Ordinance and resolution of the Standing Committee of the National Assembly; 4 Order and decision of the president; 5 Decree of the government; 6 Decision of the prime minister; 7 Resolution of the Judge Council of the Supreme Court; 8 Circular of: ministers/heads of ministerial agencies; the chief justice of the Supreme Court; the chief procurator of the Supreme Procuracy; 9 Resolution of the People‟s Councils of provinces; and 10 Decision of People‟s Committees of provinces; in addition, international treaties play an important role in the development of the legal system of Vietnam, acting as another source of law An international treaty becomes a source of law after being ratified by the National Assembly Beside, Vietnam has committed to several free trade agreements (FTAs), which attract investors and boost international economic integration, these FTAs also contribute an important source of law

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Promulgation of Normative Documents, Law No 80/2015/QH13, June 22, 2015 http://www.economica.vn/Content/files/LAW%20%26%20REG/80_2015_QH13%20Law%20on% 20Promulgation%20of%20normative%20documents.pdf

34

A look at Vietnam's legal system, 2017,

https://oxfordbusinessgroup.com/overview/law-land-look-country%E2%80%99s-legal-system

1.3.2 Remarkable points in the Vietnamese jurisdiction

Vietnam is a one-political party country under the control of the Vietnamese Communist Party, which plays a central role in shaping the country's policies and legal system The National Assembly of Vietnam is the highest-level representative body of the people This body has supreme supervisory power to oversee all

political leading model brings most advantages for the country but in some specialized issues its policies and laws do not broadly get enough opponent or critical opinions which may potentially lead to an unpractical one-way control in building and enacting a regulation or a code And, there are still many concerns on the independence of the courts However, in other countries on the world sometimes

we also see such kind of shortcomings

Vietnam has received supports from advanced countries such as the US, Japan, Denmark, Canada, Germany, etc , in implementing legal reforms For example, JICA (Japan International Cooperation Agency) has supported Vietnam in implementing legal reforms in civil and commercial legal sections as well as human

Development) helped Vietnam to rewrite or adopt 93 legal documents related to

reforms to support the marketization of the economy, producing a diverse set of civil and common law influences from various sources including Sweden, United

law/bitstream/handle/1773.1/659/14PacRimLPolyJ001.pdf?sequence=1.

Appointment and Promotion,” Pacific Rim Law and Policy Journal Association, 2005, 5, http://digital.law.washington.edu/dspace-

law/bitstream/handle/1773.1/659/14PacRimLPolyJ001.pdf?sequence=1.

Appointment and Promotion,” Pacific Rim Law and Policy Journal Association, 2005, 5,

legal system in Vietnam currently has impacted significantly from the donor‟s

different from the period of centrally-planned economy before 1986 The reforms of

Vietnam in new century relate more to rule of law state than socialist legality (phap che xa hoi chu nghia).40 This means that legal system in Vietnam nowadays still is

of civil tradition but it has absorbed advanced improvements from the cutting-edge legal industries to become a more modern legal system

January 1, 2017, is a notable date with the new Civil Code 2015 (Civil Code) taking effect This Civil Code is expected to serve as the foundation for all other laws governing civil and business relationships, to enhance consistency in the legal system of Vietnam and protect civil rights of entities in a better manner For example, the Civil Code clearly states that all regulations of other laws must not contradict other regulations of the Civil Code In case of contradiction, the regulations of the Civil Code shall prevail These types of regulation did not exist in the old Civil Code of 2005 In addition, for the first time, the Civil Code states that courts in Vietnam shall not deny solving civil issues, because there are no existing regulations governing such issues The Civil Code also allows courts to make decisions based on certain court precedents issued by the Supreme Court or based

on the principle of fairness when there are no regulations, Customs or analogous

referred to as a source of law in specific legal documents See for example Article 5

Jurisprudence is not recognized as a source of law, and is not an official part of the Vietnamese legal system Therefore, in theory, court decisions have no binding precedential value However, guidelines on the interpretation of laws which are issued in the form of Resolutions by the Judge Council of the People's Supreme Court are a source of law In details, the Supreme People's Court produces guidelines in the form of Resolutions and conclusion reports, and a yearly collection

of typical cases with comments and instructions (available on the website of the Supreme People's Court, Vietnamese only) These have a binding effect

on inferior courts according to Article 21 of the “Law on Promulgation of Legal Normative Documents”43, which states “Judge Council of the People‟s Supreme

Court shall promulgate resolutions to provide guidelines for uniform application of law to adjudication by summarizing application of laws and supervising

adjudication”, and Article 4 of the “Law on Promulgation of Legal

Normative Documents”, they are a source of law

43

Promulgation of Normative Documents, Law No 80/2015/QH13, June 22, 2015 http://www.economica.vn/Content/files/LAW%20%26%20REG/80_2015_QH13%20Law%20on% 20Promulgation%20of%20normative%20documents.pdf

1.3.3 Reviewing the hierarchy of the Vietnamese court system

According to the “Law on Organization of People’s Courts 2014” (Law No

instance and courts of appeal The court system consists of the Supreme People's Court (SPC), the High-level People's Courts (or Superior People‟s Courts in Hanoi,

Da Nang, Ho Chi Minh, these are both trial and appellate courts), the provincial People's Courts (63 provincial-level people's courts - these are both trial and appellate courts), the district People's Courts (these are trial courts only) and the Military Courts (Military tribunals established at various levels in the Vietnam People's Army, the highest being the Central Military Tribunal, which is subordinate to the Supreme People's Court) There are specialized courts at High-level People's Court and at the provincial People's Courts These include the

Criminal Court, Civil Court, Economic Court, Administrative Court, Labour Court

and Family and juvenile Court The district People's Courts may have Criminal

At the apex of the judicial system is the Supreme People‟s Court (SPC), which is the highest court for appeal and review and is charged with the supervision of subordinate courts As a court of first instance, it tries cases involving high treason

or other crimes of a serious nature; and as the highest court of appeals, it reviews cases originating from lower courts The Supreme People‟s Court works independently with all other governmental agencies, although they are nominally responsible to the National Assembly The chief justice of the Supreme People's Court is elected by the National Assembly, and has the term corresponding to the term of the National Assembly and can be re-elected The chief justice of the

instead of the local People's Council in administrative bodies The budget of the

http://www.economica.vn/Portals/0/Documents/622014QH13267272.pdf

45

Vietnam Legal Research, http://www.nyulawglobal.org/globalex/Vietnam1.html#_ednref19

ttp://www.economica.vn/Portals/0/Documents/622014QH13267272.pdf

local courts, previously decided by the provincial Departments of Justice, is now decided by the National Assembly This intends to make the local courts more independent from the local government

Economic courts were established within the provincial People‟s Courts and within the Superior People‟s Court Normally, there are no economic courts within the district People‟s Courts Instead they have specialized trained judges who judge economic cases The Article 02 of the Circular 01/2016/TT-CA of the Supreme People's Court regulates the organization of specialized courts at the People's Courts

economic court is that the caseload must be at least 50 cases per year In such economic courts, commercial and business disputes will be tried regardless of their international or domestic natures

In addition, the Resolution No 49-NQ/TW of Political Bureau, June 2, 2005, on the strategy for judicial reform through 2020, set forth the goal of building and

government is carrying out judicial reforms which are expected to improve the operation of the courts Furthermore, Vietnam is also pressed for changes under the commitments made in its adhesion to the World Trade Organization Hence, in the very near future, we can see vast changes in operation of the Vietnamese court system

49

Restructuring the court system, 3986.html

http://vietnamlawmagazine.vn/restructuring-the-court-system-1.3.4 Current services of Vietnamese commercial court

In other words, economic courts in Vietnam are Vietnamese commercial courts However, in these courts mainly domestic commercial cases are decided, there is no data showing how many international cases have been settled there, apparently the number of international cases is not significant In present, pleadings in commercial courts or in any other courts of Vietnam are being conducted by Vietnamese

language, not by English50 In addition, Vietnam also has the Vietnam International Arbitration Center (VIAC) and Vietnam Mediation Center (VMC), these organisations attract most international cases, and they are choices of international businessmen rather than a domestic court with only Vietnamese-based pleadings

As to procedures in Vietnamese commercial courts, nowadays they still keep traditional processes with filing directly to the court, there has not been a new kind improved to be more appealing to litigants who want to sue his or her partner in a convenient manner such as filing a dispute via the Internet or joining a joint video-conference hearing from another site In the next part of the thesis, we can find more and more attractive features of some typical international commercial courts Vietnamese courts may learn not only from the way of providing services but also from their rules and how they take the most out of technology in legal activities Despite such abundant analysis from English sources, there is not much attention paid to this issue in Vietnam yet I found a text of A Prof, Doctor Lê Minh Tâm

trong hoạt động tư pháp” 53, but they all are about some things else out of my research

After reviewing materials, there has obviously been a deficiency in literatures on analyzing fully about services and innovations of some typical major international commercial courts That is the reason for the existence of my thesis I would like to fill in the gap, but will inevitably overlap the analysis of general litigation and arbitration in order to draw generally and systematically about international commercial courts

CHAPTER 2: FINDINGS

2.1 Globalization of the Hague Convention on Choice of Court Agreements

Calls for the creation of international commercial courts are, in part, a response to

ratification of the Hague Convention on Choice of Courts around the world has created more attractive characteristics of international commercial court in order to balance with undeniable advantages of arbitration with the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) From this movement, many international commercial courts have been established It is interesting to discover some typical courts in the latter half of this part

How may a transaction be insulated from litigation risk? This is the most concerned question for contracting parties when they enter into a transnational commercial deal Litigation risk is the risk to a contracting party that it will be required to enforce its rights by litigation, or defend proceedings brought by a

risk is the risk that a party is required to initiate or defend proceedings in an unfavourable forum Enforcement risk is the risk that any judgment obtained will be unenforceable This matter concerns jurisdiction agreements which are agreements

as to where litigation will take place, are submitted to a given court or courts and by such agreements litigation risk is minimized Jurisdiction agreements take numerous

distinct forms: exclusive jurisdiction agreements (confer jurisdiction on a

designated court and such jurisdiction cannot be challenged in the other courts or

elsewhere), non-exclusive jurisdiction agreements (offer parties the flexibility to

bring substantive proceedings wherever the defendant‟s assets may be located at the

time of proceedings), hybrid agreements (litigation in a given court is primary,

with arbitration as an alternative, or arbitration is primary, and litigation is

54

Dang, Q., 2018, „International Commercial Courts–Partners and Potential Rivals of

Arbitration’, master‟s thesis, Kobe University, 30

55

Richard, F., 2015, International Commercial Litigation, Second Edition, Oxford, 42, ¶2.01.

secondary) and asymmetric agreements (one party alone submits to the agreed

The role of jurisdiction agreements in a transnational litigation case is primarily governed by the Hague Convention on Choice of Courts (global agreements), or regional agreements (for instance, Brussels I Regulation in the EU), or bilateral agreements,

or the common law, or civil law In principle, where the Hague Convention engages, it takes priority, and where the regional agreements engage, they oust national law (common law or civil law) However, both the regional agreements and national law must cede to the rules of the Hague Convention If one party is resident

in a third state which is a party to the Hague Convention, jurisdiction derives from the Convention If both parties are EU-residents, or are resident in third states which are not parties to the Convention, jurisdiction derives from the Brussels I Regulation For example, if an American company and a German company choose the Rotterdam district court, the Convention will prevail, if on the other hand, a Belgian company and a German company choose the Rotterdam court, the Brussels

I Regulation will prevail Jurisdiction agreements are the British name of “the Choice-of-Court Agreements” in the Hague Convention or “forum-selection agreements” in the US usage57, are agreements, so there must be a contract between the parties

the Netherlands) adopted the Convention on Choice of Court Agreements which

in which the courts of Convention States may decline to exercise jurisdiction conferred by agreement, or refuse to give effect to valid agreements in favour of the

https://www.hcch.net/en/instruments/conventions/status-bound by the Convention,59 including the European Union with 27 countries (which covers all member states, Denmark ratified 30/5/2018), the UK, Estonia, Mexico and Singapore And there are 4 countries which signed the Hague Convention but have not ratified it: The United States, Ukraine, Montenegro and China

The aim of the Hague Convention (the Convention) is to promote international trade and investment through an international regime of judicial cooperation that enhances the certainty and effectiveness of jurisdiction agreements between parties

to commercial transactions in the contracting states The main attraction of the Convention is the recognition and enforcement of a judgment from a contracting state in another contracting state It seeks to replicate the effectiveness of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards in the context of recognition and enforcement of judgments in international commercial litigation

The Convention was inspired by the Brussels I Regulation and follows its general lines, containing “three basic rules” to give effect to choice of court agreements: (1) The chosen court must in principle hear the case (art 5);

(2) Any court not chosen must in principle decline to hear the case (art 6); and (3) Any judgment rendered by the chosen court must be recognised and enforced

in other Contracting States, except where a ground for refusal applies (arts 8 and 9)

However, the Convention applies only to exclusive jurisdiction agreements exclusive or asymmetric agreements are not to be treated as exclusive, thus are

The Convention contributes to balance decision making in international transactions We can see through similarities and distinctions between it and the

New York Convention Firstly, there are general similarities between the two

conventions: Article II (1) of the New York Convention provides that “Each

contracting state shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by

arbitration” and Article III follows by providing the other piece of the recognition

puzzle “Each contracting state shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under conditions laid down in the following articles” On the

other hand, Articles 5 and 8 of the Hague Convention provide similar rules

regarding choice of court agreements and the recognition and enforcement of resulting judgments Thus, the Hague Convention has eliminated the distortion in contractual decision-making driven solely by the presence of an unbalanced enforcement regime from the New York Convention Secondly, there are also distinctions that may affect the choice of forum:

 Matters of scope: Article I of the New York Convention states that the

Convention applies to “recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought” Article 1 of the Hague Convention limits its scope of

application to international cases involving exclusive choice of court agreements in civil or commercial matters, and Article 2 excludes consumer and employment contracts and then follows with an extensive list of subject matter exclusions from its scope The New York Convention has no such catalogue of exclusions from its

scope and applies to all agreements “in respect of a defined legal relationship, whether contractual or not concerning a subject matter capable of settlement by arbitration” This may mean that matters excluded from the scope of the Hague

Convention are within the scope of the New York Convention On the other hand,

the specific exclusions in the Hague Convention are likely to provide somewhat greater certainty at the outset than is possible under the New York Convention,

which requires reference to national law of the appropriate states to determine

 Obligations of a court that is not the chosen forum: The New York

Convention has no provisions comparable to Article 5 of the Hague Convention

which provides rules applicable in the chosen court If the matter goes to arbitration before the chosen tribunal, it will be the rules of that tribunal (or those established

by party agreement) that will apply If the matter goes to a court not chosen by the parties, both Conventions begin with a rule requiring deference to the chosen forum Article II (3) of the New York Convention requires that courts refer the parties to

arbitration with the only exception being when the court “finds that the arbitration agreement is null or void, inoperative or incapable of being performed” Article 6

of the Hague Convention provides a more extensive list of grounds on which a court not chosen may continue to exercise jurisdiction, including when the agreements is null or void under the law of the state of the chosen court, when a party lacked the capacity to conclude the agreement under the law of the state of the court seised, when giving effect to the agreement would lead to a manifest injustice or would be manifestly contrary to the public policy of the state of the court seised, when the agreement cannot reasonably be performed, and when the chosen court has decided not to hear the case While this list is longer than that found in Article II (3) of the New York Convention, the number of cases may be quite limited

The Hague Convention if it becomes effective for a significant number of contracting states will has potential to create a more level playing field in the choice between arbitration and litigation It would allow parties to a transaction to select the dispute resolution option best suited to their specific needs rather than choosing arbitration simply because it has the advantages of the New York Convention with

no corresponding convention available to support the choice of a national court for the settlement of disputes

61

Ronald, A & Paul, H., 2008, The 2005 Hague Convention on Choice of Court Agreements,

Commentary and Documents, Cambridge, 219

It is, of course, early days for the development of the Choice of Court Convention (because other conventions such as CISG - United Nations Convention

on Contracts for the International Sale of Goods (Vienna, 1980) - needed 8 years to acquire 10 member countries), and it remains to be seen whether it will replicate the success of the New York Convention in providing a global device of enforceability for the judgments of courts of Contracting States in the same way as the New York Convention has achieved for arbitral awards However, with the present speed of ratifying by its members (more rapidly than that of CISG), it is possible to see over the next decade the globally widespread ratification of the Convention There are reasons for thinking that commercial parties will see the need for such global coverage and that states will respond accordingly In the present context, the Convention also has the potential to help further facilitate the effectiveness and attractiveness of international commercial courts, as well as helping drive the

Choice of Court Agreements, Page 275.

2.2 Challenges need to be resolved by international commercial court

2.2.1 In general on the world

In the first place, the effectiveness of a transaction does not depend merely on the legal rights and duties of parties, but also depends on the availability and enforcement of remedies This is because the transaction cost and the willingness of the parties to the contract vary on risks The risk of litigation is ever-present in contractual relations Even if a judgment is obtained, the cost of effective enforcement may be significant if the defendant has assets abroad or in several jurisdictions These issues become more serious and complex in cases where the Hague Convention does not cover the country assuming jurisdiction since it is not a member of the Convention These issues affect the enforcement of a court judgment and the operation of the dispute resolution market as well the commercial market What is more, as our financial and commercial markets are changing ever more rapidly as a consequence of the digital revolution, it is imperative that international commercial courts adopt a clear strategic approach to how they meet that change The basis of that strategic objective must be strengthening the rule of law Implementation requires us to ensure that international commercial courts continue

to be able to provide authoritative interpretations of the law, to resolve individual disputes in a timely, cost-effective and just manner, to guide wider market behaviour, and listen to the market These will depend first and foremost on whether suitable candidates for adjudicating relevant issues can be appointed At present, there are not enough international judges to provide for an expert in each legal tradition

2.2.2 In Vietnam

There is not a court specializing in dealing with international commercial disputes in Vietnam, so in this part we will discuss pressing challenges and difficulties that Vietnamese People‟s Courts are facing to get a general understanding

Under the Law 2014 on Organization of People's Courts, the Supreme People's Court is not organized to specialized courts Judicial reviews and re-trials shall be carried out by the Council of Judges of the Supreme People's Court (17 supreme court judges) The Council of Judges of the Supreme People's Court is currently assisted by three departments of inspection (have no any other judge there) As expected in the coming time, caseloads will increase, and at the same time, they will

be more complicated If there are no intermediate judges, senior judges at the three

The number of judges in the People's Courts at all levels has not yet met requirements of the organizational structure, tasks and competence of the People's Courts regulated in the Law 2014 on Organization of People's Courts and Laws on judicial proceedings (newly approved by the XIV National Assembly, effective

quality and structure of cadres, the capabilities of civil servants and officials in the People's Courts at all levels have not satisfied the need of legal practice Civil servants with highly professional qualifications and leading experts with capabilities of resolving legal issues arising out of international business still do not