Arbitration & Court Should Work together to Promote the Resolution of Disputes

In order to study advantages of settling trade disputes by trade arbitration and improve enterprises' awareness of this matter, ViB Forum reporter had an interview with Mr Jason A.Fry, Secretary General  of International Court of Arbitration.

There are two methods to resolve trade disputes: by arbitration and by going to the court. Which method is preferable?

For the resolution of international business disputes, international arbitration has become the preferred method of resolving such disputes, for the reasons that I outlined in my talk today. Because it is neutral and independent, it is a flexible system, it is final and it provides for an effective means of enforcement of the provisions under international treaty.

What are the advantages of arbitration in resolution of disputes?
Well the advantages are the things that I just stated, like the neutrality and flexibility of the system, and the speed and cost at which these things can be resolved. The parties can choose their arbitrators who may have expertise in the area of the dispute, whether it is shipping, trade, construction or contested property, and the international treaties, such as the New York Convention that provides for the enforcement of arbitration awards, provides the most effective means of enforcing decisions. It is much more difficult to enforce the decisions of a commitment court under the current framework of law and international treaties.

What are the advantages of bringing trade disputes to the court?
The advantages of going to court would be, sometimes in cases where there are multiple parties who have not signed the arbitration agreement, but who are interested in the dispute or may have responsibility in the dispute, then the court system is the system that enables joining those parties in the dispute. But arbitration is only for parties that have agreed to arbitrate a dispute and can thus take part in the arbitration process, so sometimes a court is better in multiparty disputes. The court also has the power to force parties to comply with their orders, which arbitrators may not have, so it depends on the situation. It may be better to go to court rather than to an arbitrator, however, there are changes in international law now that are giving greater power to arbitration trade law.  The United Nations Commission on International Trade Law has developed an amendment to the model law on international commercial arbitration which would give arbitrators greater powers to grant interim and conservatory measures, and for those interim and conservatory measures to become enforceable at the same time.

I should add that the decisions of arbitration and court decisions, resolution of disputes by courts, are complementary, they are not in competition with each other. They should work together in order to promote the resolution of disputes.

How do you know about Vietnam's capacity of resolving trade disputes?
Well I think that if companies in Vietnam, or the Government of Vietnam, trading with foreign investors, or Vietnamese companies are investing outside of Vietnam, then the most acceptable and mutual way of resolving disputes is by international arbitration. Disputes within the domestic framework of Vietnam can be resolved either by going to the domestic courts or by arbitration.  Even in a domestic context, arbitration does sometimes provide some advantages. Parties can choose their own judges who understand the business nature of the dispute.

How do you access the performance of the Vietnam International Arbitration Centre?
They have very much welcomed cooperation with us. And we look forward to cooperating with them in the future to encourage the use of arbitration in Vietnam and between Vietnamese parties and foreign parties.

Minh Thoa